Principles Eat Rules for Breakfast

Principles Eat Rules for Breakfast

Part of the old, negative stereotype of HR is that it is a function driven entirely by rules and procedures, concerned mainly with compliance and ensuring that employees do not engage in behaviors that could harm the organization. As the role of HR and talent management has evolved into something more strategic, however, the rules-based mentality has become more of a liability for organizations that want to develop high-performance cultures and unleash their people’s potential.

At the Harvard Business Review last week, HPWP Consulting founder Sue Bingham made the case against overly prescriptive HR policies, arguing that policies focused on preventing bad behavior by a minority of employees only cause the majority of employees who do have the organization’s best interests in mind to feel distrusted and belittled. This in turn makes it harder to attract and retain high performers. In the alternative, she advocates for policies that focus on setting positive expectations rather than proscribing specific infractions, and that treat employees as intelligent adults capable of using good judgment.

In other words, organizations need principles, not rules, Eric J. McNulty argued at Strategy+Business last week, as principles “give people something unshakable to hold onto yet also the freedom to take independent decisions and actions to move toward a shared objective”:

In some rule-based enterprises, it is the enduring, mythical power of a four-inch-thick procedure manual that lays out exactly what workers can and cannot do. In others, it is accumulated organizational ossification. Of course, there are regulations, union rules, and other legitimate constraints. Too often, however, rules were designed to fix the problems of yesterday and remain in place long after the problem itself has changed. …

Some companies, however, driven by the increasing evidence of the links among purpose, profit, and employee engagement along with the increased need for organizational agility are taking the principle route. Consider, for example, U.K. upstart Metro Bank and their “One to say yes; two to say no” principle. That is, any frontline employee can decide to say yes to a customer request, but if they think the request should be denied, they must get permission from a colleague or supervisor. That’s a welcome, empowering inversion of the typical approach.

This is something that we at CEB, now Gartner, have seen as a trend in our own best practices for talent management. For example, MetLife’s Guiding Relationship Principles. which we profiled in our research on improving functional relationships in HR, encourage better collaboration within the function by defining the foundational guidelines for intra-HR relationships, particularly between Learning and Development and HR business partners. (CEB Corporate Leadership Council members can read the full study here.) In our latest work, we’ve looked at the Bill & Melinda Gates Foundation’s Cultural Dos and Don’ts, a principles-based approach to managing culture change.

In both cases, the key to making this approach work is that the principles themselves are co-created with those who must live by them. Otherwise they’re just rules. To that end, our Open Source Change research is a great starting point to see how companies can create an architecture for developing principles for employees to operate by. Corporate Leadership Council members can check out that research here.