Are those rules really necessary? — How to discard complex regulations and transform into a simple, strong organization
Excellent rules are those that you are not even aware of. They are as natural as the air we breathe, creating an environment where everyone in the organization can focus on their work with peace of mind and without hesitation. Is this not the ideal form of a rule? Employees should not have to flip through thick rulebooks or check the fine print of internal regulations every time they perform a task; they should be able to act intuitively based on their own common sense and judgment. Such a state is proof that rules are truly functioning.
For example, an excellent traffic signal naturally creates safe and smooth traffic flow without forcing drivers to engage in complex thinking. Red means stop, green means go. It is precisely because of this simple principle that we can head to our destinations in our daily driving without feeling excessive stress. Workplace rules should also, by nature, be like these traffic signals—signposts that facilitate the activities of the entire organization and maximize individual performance.
However, if we look at organizations in reality, what do we see? If the employees in your company are constantly worrying about some rule or another, working cautiously as if walking through a minefield, that is a danger signal emitted by the organization. Those rules may not be there to protect and guide the employees, but rather have become 'chains' that stop their thinking and bind their actions. The rules are too complex, there are too many of them, the content is too vague and open to interpretation, or they are too far removed from actual work. Such situations can be a major factor that not only lowers employee performance but also hinders the growth of the entire organization.
In this article, we will uncover the mechanisms behind why organizational rules become complex and hollow. After clarifying the various harms caused by complex rules, I would like to delve deeply into the specific principles and methods for designing and rooting 'rules like air' in an organization—rules that allow everyone to act autonomously without even being conscious of their existence. Rules are not there to restrict action. I want them to be the foundation that allows everyone involved in the organization to work with peace of mind, creatively, and to the best of their ability.
Why do rules increase and become complex without limit?
In many organizations, rules are born from good intentions. Why is it that things meant to solve problems, prevent trouble, and ensure fairness transform into complex things that everyone finds stifling? There are several structural factors lurking in the background.
First is the cycle of 'symptomatic treatment after a problem occurs.' When a problem or scandal occurs in an organization, the easiest and most straightforward recurrence prevention measure is to add a new rule. For example, suppose an employee misuses expenses. In response, the organization sets stricter rules, such as 'double approval by a supervisor is mandatory for all expense settlements' or 'always obtain competitive quotes even for small equipment purchases.' This seems like a rational decision at first glance. However, to prevent misconduct by just one person, all other honest employees are forced to go through cumbersome procedures.
By repeating such symptomatic additions of rules, processes that were originally simple become complex over time, like layers of sediment. The front lines become exhausted, wondering 'is this another new rule?', and the situation often falls into the absurdity where following the rules becomes the goal itself.
Second is the increase in 'exemption clauses' for the sake of avoiding responsibility or self-defense. Especially as organizations grow larger, management and legal departments focus on creating rules to protect the company from all assumed risks. They try to cover every exception and possibility so that in the event of a lawsuit or trouble, they can claim that it was 'clearly stated in the rules.'
As a result, the rulebook becomes thicker and thicker, becoming a complex and bizarre thing that is difficult for anyone to fully understand. This is based on the idea of managing employees as potential perpetrators rather than trusting them. It also becomes a factor in lowering employee engagement, as they feel that 'the company does not trust us.'
Third is rule-making based on 'idealism' that is divorced from the reality of the front lines. This problem becomes prominent when the department formulating the rules is far from the front lines where actual work is performed. They create ideal rules based on armchair theories without fully understanding the situations in which front-line employees work and the judgments they are forced to make every day. For example, in customer service, irregular situations that cannot be handled according to the manual occur frequently.
However, if the rule states that 'you must strictly adhere to the manual in all cases,' employees are forced to choose between stopping their thinking in the face of customer dissatisfaction or breaking the rules and taking responsibility themselves. Unrealistic rules do not protect employees; instead, they cause them suffering and become a shackle that hinders appropriate judgment.
Fourth, the 'lack of inventory' of past rules is also a major factor. The business environment and social conditions are constantly changing. Rules that were once effective often lose their meaning and become hollow over time. However, many organizations are eager to add new rules but are passive about abolishing old ones.
As a result, 'zombie rules' whose existence no one can explain remain, and they sometimes overlap with or even contradict new rules. This makes the organization's rule system even more complex and difficult to understand, leading to employee confusion. These factors intertwine, and organizational rules, like weeds in a neglected garden, increase without limit and become complexly entangled.
The 'four diseases' of complex rules that erode an organization
Complex rules that constantly make you aware of their existence are not just a problem at the level of being 'troublesome.' They are a hotbed for serious 'diseases' that sap the vitality of an organization and hinder its growth. Here, let's take a detailed look at the four representative harms caused by complex rules.
The first disease is 'employee paralysis and performance decline.' In an environment where rules are excessively detailed and restrictive, employees stop thinking for themselves. A 'wait-for-instructions' attitude, such as 'I'll do this because it's written in the rules' or 'I won't do it because there's no precedent,' becomes widespread, and the opportunity to demonstrate the creativity and problem-solving ability they originally possessed is lost. Part of the working time is spent confirming and interpreting rules and going through cumbersome application procedures, making it impossible to focus on the essential work that should create the most value. This not only lowers the productivity of individual employees but also directly leads to eroding the competitiveness of the entire organization. Employees are deprived of autonomous judgment and become mere cogs in a giant machine, simply repeating predetermined movements.
The second disease is 'inhibition of innovation.' New ideas and challenges are often born from stepping outside existing frameworks. However, in an organization where rules stand like walls, innovative attempts are nipped in the bud for reasons such as 'that would be a rule violation' or 'the approval process is too complex.' In a culture dominated by an excessive fear of failure and a focus on finding faults, no one will take risks to try new things. As a result, the organization settles for the status quo and follows a path of gradual decline, unable to respond to market changes. In contrast to rules that are as natural as air, which encourage free thinking among employees, stifling rules erode the power to create the organization's future from within.
The third disease is 'decline in employee engagement.' The attitude of not trusting employees and trying to bind them with detailed rules is conveyed as a message that 'the company only sees us as objects to be managed.' The feeling of not being able to proceed with work at one's own discretion and being constantly monitored robs employees of pride and fulfillment in their work, causing a serious decline in motivation. Situations can also occur where talented individuals who feel stifled or restricted leave the organization. If employees lose the spontaneous desire (engagement) to 'work hard for this organization,' even if you draw up an excellent business strategy, you will lack the power to execute it. Complex rules are silent destroyers that break the trust between the organization and its employees.
The fourth disease is 'hollowing out of rules and moral hazard.' If rules are too complex and unrealistic, employees give up on following them. Employees who initially tried to follow them seriously eventually start thinking, 'I can't get my work done if I follow them' or 'no one else is following them, so why should I?', and the rules gradually become hollow. What is truly dangerous is that when this state becomes normalized, even important rules that should be followed are neglected.
For example, a situation where complex rules regarding information security are no longer followed, resulting in even basic information management that should be protected being neglected, leading to a serious information leak. This is a form of moral hazard and carries the risk of collapsing the entire compliance awareness of the organization. Ironically, overly complex rules can become the trigger for creating a lawless zone. These four diseases quietly but surely sap the strength of an organization.
Four principles for designing 'rules like air'
What kind of mindset is necessary to break away from the complex rules that erode an organization and design 'rules like air' that draw out the autonomy and creativity of employees? Here, I propose four fundamental principles. These principles are not just techniques, but can be called a philosophy for rethinking the very nature of an organization.
The first principle is 'simplicity that pursues the essence.' The most important thing when creating a rule is to keep asking the essential question: 'What is the purpose for which this rule exists?' Many rules become complex because they define the means rather than the purpose.
For example, suppose there is a rule that says, 'Expense settlements must be submitted within 5 business days from the end of the month, in the specified format, with the approval seals of two supervisors.' The essential purpose of this rule is likely 'to properly manage company assets and complete accounting processes promptly.' If that is the case, if the purpose can be achieved, the means should be able to be simpler. By rethinking from the essence, such as utilizing technology to automate the application process or making supervisor approval unnecessary for amounts below a certain level, rules can become dramatically simpler. Expressing them in clear, concise language that can be interpreted the same way by anyone who reads them is the key to this principle.
The second principle is a 'shift to a principle-based approach.' This means changing one's mindset from a 'rule-based' approach, which dictates detailed procedures one by one, to a 'principle-based' approach, which outlines the fundamental principles and values that the organization must uphold.
For example, instead of creating a 'customer service manual' that spans hundreds of pages, you set forth a principle: 'At all times, act with integrity and speed from the customer's perspective.' As long as this principle is shared, employees can make the best decisions themselves based on the situation at hand. Of course, not all rules can be replaced by principles, but this approach is extremely effective in areas where employee discretion and judgment are respected. It requires rethinking employees not as 'robots that follow manuals,' but as 'autonomous individuals who embody the organization's philosophy.'
The third principle is 'thorough field-oriented management.' Excellent rules are not born solely within conference rooms. The employees on the front lines who actually use those rules to do their jobs know the most effective and realistic rules. The process of formulating and revising rules should always involve representatives from the field. It is essential to listen sincerely to their opinions and deeply understand the actual work procedures and the problems they feel on a daily basis. Rather than management departments imposing idealistic theories of 'how things should be,' a collaborative stance of thinking with the field about 'how we can make things better' creates rules that truly function. If the created rules are in line with the reality of the field, employees can accept them with a sense of conviction as 'rules for themselves.'
The fourth principle is 'the courage to stand on the assumption of human goodness.' Many complex rules are based on the 'cynical view' of preventing misconduct or negligence by a few unscrupulous individuals. However, the majority of an organization consists of well-intentioned employees who want to perform their duties honestly. Trusting them and relying on their good sense and autonomy is the first step toward creating simple rules. Excessive management and restrictions not only sap employee motivation but can even lead to fruitless games of wits, such as 'looking for loopholes in the rules.'
Of course, standing on the assumption of human goodness does not mean condoning misconduct. A foundation of trust is necessary, where misconduct is dealt with strictly when it occurs. However, as a starting point, having the courage to trust employees and believe that they can autonomously make the right decisions leads to the healthy development of the entire organization.
Building a mechanism to nurture and maintain excellent rules
Excellent rules, like the air we breathe, are not something you design once and then forget. Like a living thing, they need to constantly breathe and change in accordance with the organization's growth and environmental shifts. Here, we will consider how to build concrete mechanisms to instill excellent rules in the organization and keep them fresh.
First, it is essential to 'carefully share the purpose and background.' When introducing new rules or changing existing ones, it is not enough to unilaterally notify people of the text alone. It is extremely important for management and supervisors to carefully explain the philosophy and purpose behind the rules in their own words, such as 'why this rule is necessary' and 'what we are aiming to achieve with this rule.'
For example, instead of just saying 'we are simplifying the expense reimbursement process,' you add a message like, 'We made this change so that you can spend more time on your core creative work. We respect individual discretion based on trust.' This allows employees to proactively view the rules not as 'something they are forced to do,' but as 'part of improving how we work.' Empathy for the purpose becomes the greatest motivation for rule compliance.
Next, it is important to institutionalize 'regular reviews and audits of rules.' It is necessary to clearly incorporate a process into the business cycle that verifies the effectiveness of rules periodically, rather than treating them as sacred once they are created.
For example, you could set a day like 'Rule Review Day' once every six months or once a year, where each department discusses, 'Is this rule still necessary?', 'Can it be made simpler?', or 'Are there any rules that don't match the current situation?' Through this process, outdated 'zombie rules' are discarded, and rules that have become hollow are revised to fit the current situation. The important thing is to make this audit a normal habit, like a health checkup for the organization, rather than a special event. This allows the rule system to constantly undergo metabolism and maintain a healthy state.
Furthermore, 'actively sharing success stories' is also effective in rooting a culture of excellent rules. Actively share success stories in company newsletters, morning assemblies, or meetings, such as cases where employees made autonomous decisions based on simple principles, resulting in improved customer satisfaction or operational efficiency. By being told as concrete stories, other employees can gain the confidence that 'it is okay for me to make decisions like this too.' Also, management and supervisors should clearly show a stance of praising and encouraging such autonomous decisions. Sharing success stories fosters trust in the rules and creates a positive chain reaction that encourages autonomous behavior throughout the organization.
Finally, and most importantly, is 'embodiment through leadership.' No matter how excellent the rules you create, if leaders such as management and supervisors ignore them or treat themselves as exceptions, those rules will become hollow in an instant. A leader must be a 'walking rulebook' who understands the spirit of the rules deeper than anyone else and demonstrates it through their own actions.
When subordinates are unsure about how to interpret a rule, they are expected to return to its essence to show the way, and to take the initiative in proposing improvements for inefficient rules. Because leaders respect the rules and believe in their value, subordinates can also follow them with peace of mind, fostering a soil where healthy discipline and a culture of freedom coexist throughout the organization.
Summary
In this article, we have explored that excellent rules are those that guide people's behavior naturally and positively without making them conscious of their existence. They are not cold 'chains' that bind an organization, but 'wings' that unleash the autonomy and creativity of each and every employee.
We tend to add rules symptomatically every time a problem occurs, complicate rules to avoid responsibility, and impose idealistic theories that are disconnected from the field. As a result, employees fall into a state of suspended thinking, innovation is hindered, trust in the organization is lost, and eventually, the organization is eroded by a serious disease where the rules themselves become hollow.
The key to breaking this vicious cycle lies in fundamentally rethinking the nature of rules. Simplicity that pursues the essence, a principle-based approach that shows major principles rather than detailed procedures, thorough field-oriented management built together with the field, and above all, the courage of the assumption of human goodness that trusts employees. Only by returning to these principles can rules be reborn from suffocating constraints into a foundation for maximizing performance.
And excellent rules are not completed once they are made. Carefully share their purpose and background, conduct regular reviews and audits, share success stories, and have leaders continue to embody their spirit themselves. It is through such continuous effort that rules become the flesh and blood of an organization and take root as a living culture.
What kind of existence are the rules in your own organization to your employees? If they are holding them back, now is the time to break those chains. Creating an environment where each and every employee can maximize their abilities with peace of mind, without being afraid of the rules. That can be said to be the most important condition for an organization to survive in an era of rapid change and grow sustainably. Rules are not tools for managing an organization, but proof of trust and a compass of hope for moving toward the future toward a common goal.
