My view of management is that you don’t control behavior with rules, but instead shape behavior through values. You do need some rules, but the principle is to minimize the number of rules you have, and not to default to “making a new rule” when you encounter a problem.

(I distinguish rules and principles, by the way — principles are enduring and guiding; rules are particular applications which are context-specific. And, I am a big fan of standards that capture the essence of what really makes certain things tick, although the standards need to be open to revision.)

Anyway, why minimize rules? There are lots of reasons, and it would be interesting at some point to go into detail. At this point, here are two reasons:

1. A reliance on rules tends to dehumanize, treating employees as potential problems to be controlled rather than adults who are responsible stewards. A default, “what can it hurt” approach to rule-making seems to assume that the manager always knows best, which is not the reality in our knowledge economy. By definition, a knowledge worker is one who knows more about his job than his manager.
2. The tools that eliminate risk often eliminate action.

This approach also syncs with how I think society best functions. “He who governs least, governs best.” That is true in government and management.

So often, the multiplication of laws (in government) and rules (in management) is more about enhancing the power of the ruler (or manager) than serving the person.

Here is an excerpt from a great manager interviewed as part of the research for First, Break All the Rules: What the World’s Greatest Managers Do Differently. His words here are typical of what they found most great managers to be saying:

Interviewer: Tell us a couple of the ideas that have helped you over the years.

Manager: Well…I suppose the first would be, pick the right people. If you do, it makes everything that much easier.

And once you’ve picked them, trust them. . . . If you expect the best of people, they’ll give you the best. I’ve rarely been let down. And when someone has let me down, I don’t think it is right to punish those who haven’t by creating some new rule or policy.

People often say: “Are you sure that it’s such a good idea to trust employees by default? Won’t they let you down?” The answer lies in what this manager said: You have to pick the right people. And once you do, trust them because you get what you expect.

There will be some times when people let you down, but it won’t be as much as you think. And when they do, it’s not right to create a stricter set of rules that hinders the 95% of the people that haven’t.

I have a guest post today at Abraham Piper’s blog 22 Words. It’s on an easy way to tell if you have a bureaucracy, in just 22 words.

On this subject you might also be interested in my post avoiding the bureaucratic death spiral.

A good list from BNet.

Jim Collins: “When you put these two complementary forces together — a culture of discipline with an ethic of entrepreneurship — you get the magical alchemy of superior performance and sustained results.”

But, realize that you can’t jump straight to disciplined action. You have to first have disciplined people, and then disciplined thought. Then you have the foundation for disciplined action. This is the fundamental point of Good to Great.

“Disciplined action without self-disciplined people is impossible to sustain, and disciplined action without disciplined thought is a recipe for disaster.”

Slate has an excellent article on why corporate IT departments should stop imposing so many restrictions on what people can do online and let them browse any way they want.

I think most people have probably experienced the tyranny of corporate computer control:

• You are are stuck using IE 6 because the IT department regards it as unnecessary (or too complicated) to allow you to upgrade to the latest version (or use Firefox) and finally have tabbed browsing.
• Or you try to go to Facebook, but are blocked lest you “waste company time” — even though your company is trying to build its brand in a more social way precisely through such tools.
• Or there is a program that you need to download, but you can’t without getting permission first from the IT department, because 0.5% of people in the company don’t know what they’re doing and might bring a virus in.

I even know one place where my website — this site, on productivity and how to do your job better — is blocked by the corporate filter.

The bottom line is: corporate IT departments tend to be too risk averse, and this is not without consequence. It is killing the productivity of their employees — and, worse, it treats them like children. I was in an environment like this for a short time, and it was utterly suffocating.

The intentions are good, to be sure. We often think it is best to err on the safe side. But “playing it safe” is usually not safe. It often creates a whole host of worse problems that makes people’s lives harder.

Often, the mark of a bad decision that is going to make people’s lives worse is, “let’s take the safe route.” (And, interestingly, the only person in the parable of the talents who was rebuked is the one who played it safe — Matthew 25:24-30).

So it was very refreshing to come across the Slate article that makes these points so clearly. Here are some of the best excerpts:

Millions of workers around the world are in the same straits: They’ve heard about the joys of Firefox, the wonders of Google Docs, or any number of other great programs or Web sites that might improve how they work. Indeed, they use these apps at home all the time, and they love them. But at work they’re stymied by the IT department, that class of interoffice Brahmins that decides, ridiculously and capriciously, how people should work.

….

The secretary of state didn’t know why Firefox was blocked [when asked this question recently by an employee at the State Department]; an aide stepped in to explain that the free program was too expensive—”it has to be administered, the patches have to be loaded.” Isn’t that how it always is? You ask your IT manager to let you use something that seems pretty safe and run-of-the-mill, and you’re given an outlandish stock answer about administrative costs and unseen dangers lurking on the Web. Like TSA guards at the airport, workplace IT wardens are rarely amenable to rational argument. That’s because, in theory, their mission seems reasonable. Computers, like airplanes, can be dangerous things—they can breed viruses and other malware, they can consume enormous resources meant for other tasks, and they’re portals to great expanses of procrastination. So why not lock down workplace computers?

Here’s why: The restrictions infantilize workers—they foster resentment, reduce morale, lock people into inefficient routines, and, worst of all, they kill our incentives to work productively. In the information age, most companies’ success depends entirely on the creativity and drive of their workers. IT restrictions are corrosive to that creativity—they keep everyone under the thumb of people who have no idea which tools we need to do our jobs but who are charged with deciding anyway.

….

You might argue that firms need to make sure that people stay on task—if employees were allowed to do whatever they wanted at work, nobody would get anything done. But in many instances, that claim is ridiculous. My fiancée works at a hospital that blocks all instant-messaging programs. Now, she and her co-workers are doctors, nurses, and other medical professionals—they’ve been through years of training in which they’ve proved that they can stay on task even despite the allure of online chat. Can anyone seriously argue that the hospital would suddenly grind to a halt if they were allowed to use IM at work?

Indeed, there’s no empirical evidence that unfettered access to the Internet turns people into slackers at work. The research shows just the opposite. Brent Corker, a professor of marketing at the University of Melbourne, recently tested how two sets of workers—one group that was blocked from using the Web and another that had free access—perform various tasks. Corker found that those who could use the Web were 9 percent more productive than those who couldn’t. Why? Because we aren’t robots; people with Web access took short breaks to look online while doing their work, and the distractions kept them sharper than the folks who had no choice but to keep on task.

Very well said. And here is perhaps the most important point of all:

As one locked-down worker told me, blocking parts of the Web “systematically makes the company stupider” about the innovation now flooding into our lives. Systematic stupidity is rarely a plan for success.

In other words, I’m not simply make the case for treating employees better — although that is critically important all on its own. But in addition to that, the problem is that companies are hurting themselves by locking down employee’s computers.

Companies would be more productive, innovative, and effective by loosing the chains of corporate computer control and trusting — yes, trusting — their employees to use the web how they see fit — both for personal and work uses (porn and anything illegal obviously excepted).

You can read the whole thing for many other great points.

And: What do you think?

(HT: Cali and Jody)

Forbes has a helpful article on how “one of the greatest success stories of our time just found failure in a big new market.”

The article points out that “rumor has it that only 5,000 iPhones have been sold in China since the device’s Oct. 30 debut.” It then explains what went wrong and what we can learn from Apple’s experience.

If you think that your company is too risk averse, it’s possible that you are just getting the wrong message. However, the burden is still on the top leadership to make sure that they are not unintentionally communicating a risk-averse mentality.

Ram Charan explains this in Profitable Growth Is Everyone’s Business: 10 Tools You Can Use Monday Morning:

People also have problems dealing with risk because their leaders may be sending the wrong message. This could be the case if you overhear people within your organization say such things as, “The guy at the top doesn’t want us to take chances.”

They could reach this conclusion by paying attention to all the questions you ask when someone brings up a new idea. You know you are just drilling down to figure out where the potential landmines are when you ask about market risks, hinge assumptions, and the like. But they may not.

You know you are just doing your homework. But people within your organization may add up the questions you are asking and conclude that you think the initiative they are proposing is too risky.

And if you go through the same due diligence — and you should — by asking all these questions about potential risks and rewards, every time someone proposes a new idea, your people could conclude that you think all initiatives are too risky.

You have to make it clear — every time — why you are asking the questions.

Post 3 in the series: Managing in a Downturn

We saw in the previous post that recessions are actually intense crucibles of opportunity. But you will be unable to capitalize on this opportunity unless you retain the faith that you will prevail despite the brutal facts (the Stockdale Paradox) and take ownership of your situation instead of focusing on the systemic problems.

A critical corollary of these realities is: Don’t retreat.

It can be tempting to think that recessions should be treated like hurricanes. You don’t go outdoors. You go indoors and retreat. Or, if it’s bad enough, leave town altogether.

But if you do this in a recession — if you treat it like a hurricane and hunker down — your strategy will backfire.

The Harvard Business Review article that I quoted previously goes on to say:

Many managers tolerate subpar results during a recession, believing that their firms will accelerate past competitors once the economy recovers. This rarely happens [emphasis added]. More than two-thirds of the companies that made major gains in our study period did so during a recession, not before or after [emphasis added again].

The authors give Dell as an example of a company that took intelligent action in light of the recession:

In 2001, Dell Computer grew unit sales by 11% even as industry sales declined 12%. Realizing that price elasticity sometimes increase during a recession, Dell used sensible price cuts to gain more than six points in U.S. market share and, in the toughest period of all — the fourth quarter of 2001 — to capture more than 90% of the profits in its industry.

Such opportunities always exist for strong companies, but the impact of exercising them is much higher during a recession, when many competitors are either distracted or hibernating.

In other words, one of the reasons that recessions present such an opportunity is precisely because most of your competitors are hunkering down or losing focus. Don’t fall into that trap, and you can advance. (Even if you are a non-profit, where your competition is not always another non-profit, but perhaps something less tangible — apathy, for example? — or time and attention and dollars spent on other things generally.)

Another reason you don’t want to hibernate in a recession is that “gains or losses made during a recession tend to endure.” As the article points out:

Of the firms that made major gains in revenue or profitability during the last recession, more than 70% sustained those gains through the next boom cycle. The corollary was also true: fewer than 30% of those that lost ground were able to regain their positions.

So if you advance during a recession, you are likely to hold that ground. But if you lose ground, you are unlikely to recover it.

In sum: Don’t retreat.

And here’s a post I wrote last January that says a bit more on thus: Recessions are Not for Hunkering Down.

Posts in This Series

1. Managing in a Downturn: An Introduction
2. Managing in a Downturn: The Good News
3. Managing in a Downturn: Don’t Retreat
4. Managing in a Downturn: Don’t Overreact
5. Managing in a Downturn: Be Careful of Cost-Cutting Campaigns
6. Managing in a Downturn: Keep Making Meaning
7. Managing in a Downturn: It’s Time to Hire