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Set Up the Right Rules for Your Company and Team

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You may have created rules to keep everyone on track as your company or team grew. You may have brought rules over from other locations, companies, or industries where you formally worked. 

However, rules that are too many, too arbitrary, and a bad match for your current company or team have disastrous effects on problem-solving, not to mention engagement, stress levels, and decision making. Everyone fears all the ways that a misstep can rain trouble around their heads—so everyone cowers in place, hoping to be overlooked by the rule-makers and enforcers.

How long has it been since you checked whether your rules were the right rules for your company and team?

Recognizing the Reasons for Rules

Leaders institute rules for good and dubious reasons. They may:

  • Feel vulnerable to lawsuits or fines from customers, employees, and regulators
  • Work in an industry where rules are necessary for health and safety
  • Believe rules will rescue a toxic, stressful culture and establish a positive one
  • Do not trust employees
  • Feel the need for more control in a VACA environment
  • Feel out of touch with their team
  • Consider their own way of doing things the only way of doing things. 

Every successful, positive workplace culture has a code of conduct based on core values. But you need to find the line between setting up the guidelines and overruling everything.

Recognizing Necessary Rules

The most necessary rules are those that promote fairness, guide communications, and resolve differences. These rules govern:

  • Time off, vacation, work hours, and benefits (such as healthcare policies and 401K plans)
  • The use of company property, including intellectual property, company cars and electronic devices, and confidential employee or customer information 
  • Conformity with industry- and government-mandated health, safety, and privacy standards and regulations for both employees and customers
  • Processes and expectations of behavior when disputes arise either within the team or with customers.

These rules help create a civilized workplace and one that protects the welfare of everyone. 

TIP: People resolve problems and are more productive and engaged if they feel that they are safe both from wanton violations of core values and from arbitrary decisions about how and when the rules are enforced.

Recognizing Unnecessary Rules

Unnecessary rules include those that:

  • Require substantial paperwork and approvals before any work or decision is undertaken (sometimes impossible to avoid with government regulations)
  • Require frequent re-stating, elaborate training, and constant monitoring and are still misunderstood or ignored
  • Are so focused on preventing risk that they discourage experimentation
  • Micro-manage; they sacrifice innovation and independent problem solving to standardization
  • Establish such tight metrics that violation is inevitable
  • Are so many in number that they are impossible to remember.

When you refuse to ever re-evaluate rules, you will quickly lose touch with whether you have the right rules for your company and team.

TIP: Rules that prevent people from achieving their best are unnecessary rules. Regularly ask for input from your highest performers to see if the rules make sense in daily practice.

Like everything else, the process of applying rules has come to the attention of software programmers. For example, suppose you have rules governing what marketplaces you can enter: say, the existing competition, income of customers, potential work pool, and efficiency of the supply chain. The software assigns values to each of these rules and determines a probability of success.

But like all software programs, these evaluation programs are only as good as the data entered. If you enter the wrong rules—put too much weight on the existing competition, for example—you may lock yourself out of a marketplace that is eager for your unique brand.

The same problem exists with paper rules, a situation that has been experienced over and over by major companies who lost their market leadership by too strict adherence to their own rules or to rules that seemed to be working for other companies (such as Six Sigma or rules governing flex time).

So how do you effectively evaluate rules to determine if they are the right rules for your company and team? Ask yourself these question:

  • Are they simple? The fewer rules you have, the easier they are to follow. The simpler the process for obeying those rules—for example, submitting ideas or raising issues—the easier they are to follow. If the rules are more complex than the problem they are intended to solve, they are not the right rules for your company or team.
  • Are they specific? Specific rules (think about those three rules mentioned earlier for determining whether to enter a marketplace) are clear and not only easier to follow but easier to modify. Some broad rules (“be collaborative”) are actually core values, not rules, and some are mere platitudes (“work smarter, not harder”). Rules should provide a framework and guideline for problem-solving and decision making.
  • Are they achievable and reasonable? Setting a rule that employees submit expense reports is fine, but setting a rule that 5 layers of bosses have to approve each report is onerous to both the employee and the bosses—and will likely cause everyone to sign off without checking anything. Setting a rule that employees have 10 sick days is fine but insisting that still contagious employees come into work after the 10 days jeopardizes everyone’s health.
  • Are they successful? For example, if the rules to determine whether to enter marketplaces result in your continually losing market share to competitors, re-examine the rules. Similarly, if the rules governing behavior in your office mean you continually lose top talent or fail to attract it, re-examine the rules.
  • Can compliance be measured and is it being measured? This question is especially important for rules that are governed by regulatory agencies or by formal industry standards. However, any rule that your team and company is regularly violating—even inadvertently—has to be re-thought. If you cannot measure compliance or don’t care, why have a rule?
  • Do the rule-breakers have a point? When rules are being broken, the rule-breakers often have good reasons besides mere perversity and obstinacy. They may be the harbingers of discontent, overwhelm, and disengagement in your entire team.
  • Do the rules match the company’s core values? If your core values include integrity but your rules are so complex that no one can successfully challenge leadership decisions, either the core value or the rules have to go. Similarly, if your core values include innovation, then rules that try to standardize idea generation or require layer upon layer of approvals are bound to stifle creativity.
  • Does the company need to invest in educating and training? Employee handbooks are fine, but when they grow beyond a few clear rules and explanations, they are insufficient. Your team and your company may need outside coaching and training in the rules for, say, handling difficult conversations,  holding effective meetings, managing performance, time management, and other SMaRT strategies.
  • How are the rules communicated? Is everyone aware of the rules? Are the rules so complex that it takes pages of text, multiple emails, and complex audits to make sure they are being followed? While some government and industry regulations may require complexity, you should be able to communicate your own internal company rules quickly, clearly, and uniformly.
  • Have the rules changed with the times? Recently, the National Labor Relations Board re-examined its own rules for determining if a workplace rule violated employee rights under federal rules such as the National Labor Relations Act. Changing times and mores require a re-examination of the rules. 

TIP: Some rules need consequences (IF, THEN) and some need alternatives (IF, THEN, ELSE). Violations of core values fall into the consequences category but most other rules should allow for alternatives—and innovation.

Key Takeaways

The right rules for your company and team will be simple, clear, consistent, easy to communicate, and a perfect match for your company’s core values, among other qualities. The wrong rules will inhibit problem solving and innovation and increase stress at all levels as everyone struggles to comply. Ten basic questions will help you determine if your rules are the right rules for your company and team.

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