4 min read

Why Principles Will Always Provide More Runway Than Policies

Empowering people with context is superior to imposing limits. One produces momentum and innovation, the other produces order takers.
Why Principles Will Always Provide More Runway Than Policies

I do my very best to avoid politics. Especially given that when I was growing up we could have conversations, disagree, and still respect the other person afterward. Now I feel pressure to subscribe to one party or the other.

I see this toxicity at work and I’ve seen it play out within the businesses that I’ve founded as well as the businesses that I have advised over the years.

Somehow we’ve allowed politics to become zero-sum (for me or against me, no in-between). And those that know me or have read anything I’ve written know I think the zero-sum mentality is complete garbage. It’s a massive failure to appreciate and encourage compromise so everyone comes out better off.

We’ve become extremely Machiavellian with the ends supposedly justifying the means.

I feel politically homeless and have for several years. I’ve never been one to subscribe to “one true way” when it comes to politics; especially given the limitations implied by a two-party system that has become so bitterly polarized in the policies supported, at the expense of consistently relying upon sound principles. We’ve become extremely Machiavellian with the ends supposedly justifying the means.

We’ve lost our way and won’t find it again until we return to a principled approach to helping everyone prosper. Are we collectively ready to do that? I’m optimistic yet skeptical. Juxtaposed I suppose. Why be divided?

How does this apply to business?

This all boils down to how we want to grow and operate our businesses. It’s easy to throw rules at people yet that provides no momentum. Over time, you end up with a risk-averse culture that will likely fail to innovate.

Principles will take you further than policies ever will. They empower and encourage responsibility, accountability, and autonomy — as opposed to preferring rule-followers and risk mitigation.

Most of us have worked for companies with massive handbooks full of policies. Well-intentioned as they may be, they are deeply flawed. This is what I would coin as “bottoms-up” thinking. The handbook likely didn’t start out resembling an old-school phonebook, but as the company grew and undesirable behaviors were encountered, more and more policies were written to prevent unpleasant results.

How many of you can relate to this? I started out working in a big company and this mentality was rampant. My wife’s experiences were similar. If you dodged this bullet, kudos to you, but I suspect you’re rarer than you realize.

Reed Hastings, in his book entitled ‘No Rules Rules: Netflix and the Culture of Reinvention’, shared how his first company, Pure Software, fell victim to death by a million policies. In striving to produce consistent results, policies exposed an ugly, unintended side-effect. The most ambitious and creative people on his team jumped ship over time due to the constraints imposed upon them. In short, they had felt stifled. Even worse, the people that remained were rule followers that failed to innovate. That’s a recipe for death.

Taking those lessons with him, Reed built Netflix on the contrarian premise that policies are more harmful than helpful. Instead, he empowered people using principles and stories (context) to help guide behaviors. He focused on “top-down” thinking.

These practices have created a company culture that focuses on empowering employees to innovate and take accountability, rather than conditioning them to simply follow protocol.

At another company experiencing rapid growth at the same time Netflix was disrupting its space, Zappos was questioning its ‘playground rules’ as well. In an effort to wow its customers with superior service, it empowered its employees to act on the best interest of customers and the company. No scripts for its customer service reps to follow meant they’d use their best judgment and a healthy dose of empathy to do what they believed was right for each individual customer.

In his book entitled ‘Delivering Happiness: A Path to Profits, Passion, and Purpose, Tony Hsieh shared many examples of how this contrarian strategy has worked over the years, with stories of reps going above and beyond to win customers for life. Prizing long-term benefits over short-term impacts.

How can you apply this to your business?

Fair question. My frustrating answer is your plan of action will rely upon your specific business, your team, and what you want to achieve long-term. There isn’t a one-size-fits-all strategy that will produce stellar results. But as long as you think ‘less control and more context’, you’ll make big strides.

Here are four action steps to get you started:

  1. Educate yourself using the success of others by reading as often as you can. I could simply summarize what I’ve done personally or provide a summary of the books I recommend below, but context is key and I’d be obscuring much of it.
  2. Understand the type of team you want. Do you behave like a professional sports team with room only for top talent? Or do you view your team as a family with loyalty and progression as top priorities? The principles you draft will hinge upon the team you are building. Netflix describes itself as a pro team while Zappos is more family-oriented — both are stellar companies with vastly different principles.
  3. Review your policies (both written and verbal) and look for the context that inspired them in the first place. How could you return to the starting line, describe the intent as a concise principle, and leverage a few stories to build context? This is a fundamental step towards empowering your team.
  4. Rewire how you interact with your team to call out the positive behavior. The modern psychology of positive reinforcement goes further than discipline. I know that I am more apt to strive for encouragement than I am likely to avoid a reprimand. My kids are wired the same way.

This article originally appeared in Entrepreneur's Handbook on Medium.

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