I’m a big fan of good policy and process because it allows for quick, consistent, and better decision making. It says that when this event happens, we respond this way. No agonizing, no reinventing the wheel, no he said/she saids or playing mom off of dad. Policy defines how we as a company have decided – in advance – to deal with certain situations. Process defines how we will do certain tasks and ultimately supports and makes it easy to adhere to policies.
Great policies and processes enable decisions to be made as quickly and as low in the organization as possible. Decisions made on the ground are always more relevant to the immediate situation than decisions made even one or two levels up.
The problems start when we adhere to policy for the sake of policy, rather than to help make better decisions. Policy should guide thinking and decision making, not replace it. Once we let policy and process replace judgment and thinking, then we must exponentially expand the number of policies and procedures to cover every possible situation that could possibly come up. When new situations arise, even one-time anomalies, another policy must be added. The more specific the policies, the more policies we must have. Soon, we’re crushed with bureaucracy and we’re safe because we’re sticking with policy even when it’s the wrong thing to do.
Unfortunately, thriving in this world requires dealing with new situations. Little to no innovation is possible in bureaucracy. The tighter the policies, the less judgment allowed, the higher in the organization decisions must be made and the less we are able to innovate, adapt, and invent.
Colin Chapman, founder of Lotus Cars and legendary race car engineer, famously once said that the secret to building a winning race car is to “simplify, then add lightness.” Simple parts and systems are less likely to break. Reducing weight makes a car quicker, better handling, more responsive, and reduces the amount of strain and wear on critical components. He understood cars, but might have well been talking about organizations.
The internet is full of people babbling on about the need for companies to be more innovative, react more quickly, and adapt faster. But it misses a crucial point: nimble companies react quickly, ponderous companies don’t. You can’t be driving along in a city bus and expect it to stop, accelerate, and turn on a dime just because you want it to. Mass creates momentum. Yet, we smugly suggest that bus size companies should behave like race cars.
Solution? Simplify, then add lightness. Good policy and process provides just enough framework to make decisions consistent with the strategic direction of the company. And not a gram more.
Four prime examples:
1. The US Constitution. This document is a miracle of simplicity. The few Americans who have actually bothered to read it know that it is amazingly stripped down and simple. In fact, it’s only about 7,400 words long (call it about 16 pages). Knowing that they couldn’t accurately imagine every possible situation that would need to be accounted for, the authors simply created an enduring framework that would enable adaptation. It was so simple and brief that they had to immediately amend it to establish and protect basic rights.
2. Nordstrom. Nordstrom’s focus is customer service and they want nothing to get in the way of employees providing phenomenal service. Their entire employee handbook is reported as listing only ONE rule: “Use good judgment in all situations.” And then there is brief mention to feel free to ask the department or store manager or HR any question at any time.
3. Apple Computers. Steve Jobs genius was not leadership: it was an unrelenting focus to make things as simple as humanly possible and then make them even simpler. How many steps does it take to get to any song on an iPod? (Hint: you won’t come even close to using all the fingers on one hand when you’re counting.)
4. Amazon. 1-click ordering. Enough said.
Um, how big’s your policy manual again? How many pages does the dress code really need to be? How many steps are truly necessary to for a customer to return an item? How easy is it for the customer to give you their money?