Abolish rules. Give employees the freedom to be responsible.

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Many of us don’t like rules because by their very nature they take away our choices. In the workplace where we strive to encourage innovation, why take away choice by creating rules? There could be a number of reasons: to avoid confusion and keep order, to protect quality or to maintain consistency perhaps. So what if you and all your colleagues were called into a meeting and told “as of today, there are no more rules in this organisation.” Exciting! What would happen?

Of course anything could happen. James might strip off and run down the corridors naked. Frances might prioritise an afternoon of shopping. Emily might return to her desk to continue work as usual. The result would entirely depend on each individual’s response to their role in the workplace. Many good companies are made up of very bad rules, yet if we want to remove rules from the workplace, we do need to be confident that the workforce is made up of the ‘right’ people. That means people who are compatible with the business, committed to it and capable of doing the job. As long as you have a great team, you may find that the only changes are for the better.

The abolishing of rules isn’t radical in itself, after all, rules are only a human convention and change all the time. More irregular is the abolishing of laws in the workplace, because we are simply so used to having them. Traditionally, on your first day, someone may be charged with taking you around the office and showing you the ropes. Traditionally, your contract may require you to turn up to work in conventional attire and on time. After a handful of work experiences, we learn to absorb the constraints of business rules and apply them from day one in our efforts to please and impress.

NETFLIX SCRAPS THE RULES-BASED MODEL

Laws are there to anticipate irregular behaviour and stop it in its tracks. Unfortunately laws can also stop the flourishing of imagination, entrepreneurship and ideas. Laws, by their nature, constrain.

So what can we replace rules with? Here’s an idea. What about trust? What about accountability?

Take a look at Netflix. Launched in 1998, Netflix is one of the great success stories in online streaming. Today it boasts a gaspworthy 3,500 employees and continues to grow. Given the subject of this blog, it may not surprise you to know that one of the secrets of their success is entirely down to their absence of rules.

If you want to know more about the Netflix culture, they generously put together the ‘Netflix Culture Deck’ which is available for public consumption. This simple Powerpoint presentation is legendary, and has been viewed millions of times. You’ll find it here. Facebook’s COO Sheryl Sandberg calls this “one of the most important documents to come out of Silicon Valley”.

LEARN FROM SEMLER’S VISION

Ricardo Semler is a Brazilian business visionary who is famous for being a successful leader in a rules-free environment. As former CEO and president of Semco, which grew from $4 million in revenue to over $160 million in about 20 years, Semler has a right to feel confident about the advantages of throwing the rulebook out of the window.

“We looked at it and we said, let’s devolve to these people, let’s give these people a company where we take away all the boarding school aspects of, this is when you arrive, this is how you dress, this is how you go to meetings, this is what you say, this is what you don’t say, and let’s see what’s left. And so, the question we were asking was, how can we be taking care of people? People are the only thing we have.”

Semler’s successful corporate democracy rethinks all aspects of work, from dress to board meetings to how employees log their days off. His vision rewards the wisdom of those who work well for him and encourages everyone to consider how to best maintain their balance of life and work.

A quarter of a century has passed since Semler put a computer in the company cafeteria that showed how much revenue the company was taking in, what the company profit margins were from that revenue, how much employees inside the company made, and how much employees in similar positions made. Take your hat off to him because he then allowed each employee to set their own salary, taking into account that information. You might think that his employees would seize the opportunity to ratchet up their bank balance, but actually, information and natural peer pressure kept salaries at industry norms.

Want to know more about Semler’s methodology? Check out his 2014 presentation at TED Global.

HIRE GREAT PEOPLE

‘Hire great people’ trips off the tongue pretty easily, but anyone who has ever hired new staff will know how difficult that can be. Locating, interviewing, engaging, training, equipping and maintaining a new employee takes enormous time and cost. The right employees mean the difference between success and failure. They are a business’s biggest investment.

Removing constraining rules allows businesses to illuminate the high performers who are driven by their capability and drive. It also roots out low achievers and those who struggle to take accountability. You would think that a rules-free environment might drive a tamer environment – au contraire.

Businesses using this methodology remain remarkably agile and able to adjust to fast changing environments and changes in industry, tech and competition handling. The fact of the matter is that by not having rules, you are more inclined move with natural flow. You don’t go out of date.

FREEDOM AND RESPONSIBILITY

The aim of all this? In summary – to encourage freedom and responsibility. Businesses can do this by investing in hiring high performance employees and building a culture that rewards those high performers.

Two decades after transforming a struggling equipment supplier into a radically democratic and resilient (and successful) company, Ricardo Semler wants other organisations to become wise. How’s your business getting on with that?