Do Your Company Rules Help or Hinder Strategy?

Company Rules Help or Hinder Strategy
Company rules should guide how individuals, teams, and organizations think, behave, and act in a way that accelerates their strategy.   Company rules can be explicit (e.g., formally written equal opportunity policies or corporate values) or implicit (e.g., norms, policies, and business practices expected, maintained, and modeled by individuals).  Most would agree that company rules, whether explicit or implicit, should serve as clear guideposts to drive clarity around healthy and aligned performance and behavior expectations.

Our organizational alignment research found that corporate culture and the rules within it account for 40% of the difference between high and low performing companies and teams.  It’s worth assessing your organizational culture and reviewing your company rules to determine their “real” purpose at your organization. Do they still make sense given where the company is headed and how it wants to get there? 

Effective company rules make it easier for people and strategies to succeed.

The Best Rules About Making Company Rules
Here are some best practice “rules about making company rules” that support a healthy and high performing company culture that will help and not hinder your strategy for success. Keep the rules:

1. Simple, Clear, and Few
   A few clear, simple rules are best. Why? Because rather than browbeat employees into submission with multiple, confusing, and limiting rules, trust your workers.
   
   If you make sure everyone understands and is in alignment with company goals and accountabilities, then you can (and should) trust them to figure out the details. Rules should highlight, align with, and support the company’s mission, vision, and values.
   
2. Focused on Making Sound Decisions
   Rules should not rob people of their autonomy or stifle innovation. Rules should encourage workers to use good judgment and make good choices within your unique situation. Give people the opportunity to assess the situation and decide how to behave in a way that fits your culture and strategy.
   
3. Open, Not Restrictive
   Give your employees some control not only over what they do but also how they do it and when. Motivated workers focus on moving things forward in a way that makes sense. Employees who are too restricted by overly controlling rules quickly lose their enthusiasm for their job. Give people some room to work at their own discretion.
   
4. More Positive than Negative
   Studies have shown that encouraging positive behavior with positive rules is more effective for improving behavior.  In general, positive rules and reinforcement increase the likelihood of a behavior being repeated. Negative rules and reinforcement work as long as the “unpleasant conditions” are present.
   
5. Flexible
   Ask for active input from employees. Listen to the thoughts of your team and incorporate them into the guidelines for behavior. Give people the opportunity to act like owners to move the company strategy forward.

The Bottom Line
As you work toward creating a healthy and high performing workplace, don’t sabotage your efforts with company rules that hinder rather than help your strategy.

To learn more about how company rules help or hinder strategy, download How to Build a Purposeful and Aligned Organizational Culture for Success