We need to reduce the amount of rules used in the world of management in order to promote people's judgment and practical wisdom.
Rules are mechanisms of control created to deal with the heterogeneity and diversity of people in order to standardize, increase productivity and efficiency. But increased productivity and efficiency are yesterday’s goals and they are not adequate to deal with the complexity of modern business. Today our goals should be value creation, creativity and effectiveness. And these goals can’t not be fulfilled under conditions of control through the use of rules.
It is time we rethink our rules, by eliminating many of them and creating new rules that unlimit instead of limit.
Our society in general and specifically our business have been using more and more rules and laws to govern behavior. However, rules, like many other issues suffer from the concept of diminishing returns. While the first rules are very helpful, the more rules we use, the less effective they become until adding more rules actually makes more damage than benefit. More importantly, rules and laws are taking over our norms is a way that is irreversible. The introduction of rules creates workers that lose their autonomy and sense of individual thinking and only follow the rules - sometimes to the letter. And what happens when you only follow rules, the question arises how will you act when there are no rules? As we saw in some of the unregulated industries that dragged the world to the greatest financial crises since the great depression, peoples behviour was less than exmplary. And we have to remember, to the most important and meaningful positions today, we are unable to write the rules, because nobody knows them or can encompass all of the complexities.
When people act according to the letter of the rule they develop no judgment and no practical wisdom and that leads to appalling results. More than that, these people lose their ability to connect humanly with others and to find creative and effective solutions that are the foundation for the development of our future society.
Rules are mechanisms of control that are created to deal with the heterogeneity and to standardize it. However, what we need in the world today is to tap into this diversity and use it in order to tackle the complexity of the world. Standardized solutions promote efficiency. Wise solutions promote effectiveness and human contact.
It is time to rebuild our society and our business communities on norms, human judgment and practical wisdom that comes out of experience and a human connection.
I am not saying rules are always a bad thing. They sometimes make sense. I am saying three things:
- In today’s world you can achieve more by minimizing the use of rules - Puzzles are about a missing piece of information. Mysteries require judgments and the assessments of uncertainty under a condition of too much information. Our world is more and more about mysteries and less about puzzles. Rules help us solve puzzles. Norms or practical wisdom help us solve mysteries. Rules cannot create the big leaps anymore. Their marginal contribution has diminished so much that they lose all meaning. What instead? First, Asking ourselves if each rule in our company's rule book is really needed and what will happen if cancel it - you can run your own Stupid Rules Contest (here are some ideas on how to do it). Second, employs some of the principles Dan Pink talks about: Autonomy, Mastery and Purpose. Third, experiment with Ideas like ROWE (Results only environment).
- There are different possible mechanisms to organizational issues - We need to use more of the other tools to regulate and enable human behavior that is not rules. Yes, Rules are the easiest way, but in the long-term, it is not the most effective one. Tools like norms, architecture (design) and market forces are viable tools to use instead of rules.
- We need more unlimiting rules instead of limiting rules - if we do use rules, we need rules that unlimit, instead of limit. We need to put rules in place where we know human judgment is predictably and consistently wrong. Rules that are there for the control of the mechanism, but that create real value.
More practical wisdom, more human judgment and more human connection. Employees that don't feel just like cogs and use their ability to think creatively and enjoy the Art of work (In the sense Seth Godin writes about in Linchpin). Less control by the central management but more autonomy and creativity by everybody else. Improved results in terms of productivity, safety, creativity and customer service as well as engaged and satisfied employees. Less standardization and more holistic solutions that tap the diversity of the workforce and the wisdom of the crowds. Finally, a more ethical and human work environment that is focused on the long-term and not only on following the current set of rules.
1. Education - people need to start and understand the price we pay for the use of so may rules and that there are other options out there.
2. Start small - find one stupid rule and cancel it. See what happens. Debreif. Repeat. Ask ariund. People around you know what the stupid rules are.
3. Find alternatives - Next time you need a rule, try to think of the alternative. How can I regulate this behavior without rules (norms, architecture/design or market)?
4. Differentiate - Find very important rules, the most basic rules of your business and ask yourself - are they limiting or unlimiting. What Am I gaining by having them around? Are they set in place just for the sake of control or are they creating more values by fixing predictable errors in human judgment.
5. Celebrate success and tell everybody about it - Then go back to step 1.
Here are a few more practical steps based on Build from the Mix community:
2. Leverage culture (based on a build by Michele Zanini) – Focus efforts more on value and not on control. If employees truly internalize and are driven by the values of an organization, they will behave in the "right" way while exercising a significant amount of autonomy (and therefore empowerment).
3. Use trust as a magnifier for judgment and enabling rules (based on a build by Alex Todd) – for more details see the hack "The Trust Extender: Enlarge the circle of trust by empowering stakeholders to trust and reciprocate trust"
Gary Hamel, Seth Godin, Bob Sutton, Daniel Pink, Dan Ariely, Malcolm Gladwell, Lawrence Lessig, Chip and Dan Heath, Barry Schwartz, Jonathan Zittrain, Philip K. Howard, and many more writes and thinker I read across the years and that I can't name right now.
No more rules! from Elad Sherf on Vimeo.
I love this hack. However, I think it needs more structure to implement effectively. What are the factors that affect behaviour and what are their dynamics? I would suggest that rules are a control mechanism rooted in fear. Empowerment, on the other hand, is a trust based behaviour modifier. I believe my hack "The Trust Extender: Enlarge the circle of trust by empowering stakeholders to trust and reciprocate trust". It is based on a framework for creating rich conditions for trust, which minimize the need for relying on rules.
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Elad, thanks for the thoughtful post. Had a few builds on your hack, and they relate to the three elements of the solution you outlined. On item #1 (minimizing the use of rules), it would be great if you could lay out a specific solution that fellow MIXers could start experimenting with. I'm particularly intrigued by the "Stupid Rule Contest" that you refer to (courtesy of Bob Sutton). How would you design and execute such a contest in a department, branch, or BU?
On items #2 and 3, I think values/culture are an important element of the solution. If employees truly internalize and are driven by the values of an organization, they will behave in the "right" way while exercising a significant amount of autonomy (and therefore empowerment). In my experience I've found this relationship to hold at all levels of an organization.
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Great post! You are right, rules basically act as mental blocks. The famous "not invented here" rule is one of the most famous blocks.
Here's a build you can add to your hack: Before making decisions, list all the rules and the assumptions they are based on and then questions these rules and assumptions. Find proof that all rules and assumptions are still valid. If you can't find proof, see if you can convince the organization to drop them. Another way to do it is to negate assumptions. In other words, assume that your assumptions are false and see how these rules change. If favorable, see if you can turn negated assumptions into reality. It seems like a hard task, but it may produce interesting results.
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I just re-read my earlier Build and believe it needs clarification.
I said: " I believe my hack "The Trust Extender: Enlarge the circle of trust by empowering stakeholders to trust and reciprocate trust". It is based on a framework for creating rich conditions for trust, which minimize the need for relying on rules."
What I meant to say was that I belive my hack for extending trust can help by providing a structured means of designing rich conditions for trust that offset the need for rules.
Let me give you a simple example: When my daughter entered her teenage years my wife and I felt threatened by the possibility she might be adversely influenced by the information and people she encountered on the Internet. We considered a number of options, such as moving the computer to a public space in the house, restrictive software that blocks access to certain online locations and content, remote access to her computer to monitor her activities, etc. We felt uncomfortable with each of these options, as they signaled a lack of trust. We also found that some would have been unnecessarily restrictive for her, as well as time consuming for us.
Instead, we chose to implement monitoring software on her computer that would track everything she does. We told her what we intended to do, with the condition that we promise to never access the log without her being present. Although our message went over like a lead balloon initially, she soon realized that it was in her best interest. Within three months of implementing the system she got into achat dispute that involved accusations by the mother of the friend she had been chatting with. We were able to use the monitoring tool log to defend our daughter's interests. Ever since that incident about 4 years ago, she has never complained about the monitoring system and we have never had a need to check the logs.
The point of the story is that by implementing a trust-enabling mechanism, rather then restrictive rules or popular control mechnisms, we empowered our daughter to use good judgment. Likewise, she does not have to abide by arbitrary curfews, and we bought her a breathalizer for her 16 birthday rather than imposing restrictive rules to navigate the impracticallity of abiding by minimum drinking age laws.
I belive the same principles can be applied to organizations, and recognize that the considerations are more complex and the solutions would be more intricate. To accomplish this, we need a structured approach for creating rich conditions for trust. My proposed hack for The Trust Extender can help enable this hack by minimizing the need for restrictive rules and controls.
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