Sunday, March 20, 2011

You Can't Make Enough Rules -- Try Values Instead

It's inevitable -- just as you've finished the Employee Manual or a work process documentation project, somebody figures out a way to misbehave in a way you never imagined. Many of us are inclined to reach for the manual and pencil in that "don't", awaiting the next revision.  

"Futile", said a Chief Executive Boards International member at a recent meeting. Then he explained that he's built a management team that has rallied around a set of core values that keeps them all on track. One of those values is performance to key metrics -- managing the business by the numbers.   Another is accountability to each other. 

He recounted a recent operations review meeting where a site manager was trying to explain away his P&L problems for the past couple of months. As he bobbed and weaved he eventually figured out there was no place to hide. Unless he could figure out how to improve the results, the rest of the organization wasn't going to let it slide. He quit the following Monday.

"Bad money drives out good" has been a macroeconomic axiom for years. The organizational corollaries are "Bad people drive out good" or "Good people drive out bad." Organizations, including businesses, are a self-selecting population. If you own a culture of mediocrity, you'll attract and retain mediocre performers. This member has built a culture of accountability (including accountability to each other), which attracts and retains those who can deliver and drives out those who can't. Isn't that an easier way to manage than rulemaking?

So, consider Nordstrom's legendary success, guided by a culture of "Do what's right for the customer." It's worked for them, and a values-based management philosophy will likely work for you, too.

Politically incorrect editorial:  This is at the core of what's wrong with our public institutions today -- Congress, Public Schools, the Legal System and Securities Regulations, to name a few.   We've attempted (perhaps by necessity) to make rules where values once upon a time sufficed.  You can't make enough rules. 
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Terry Weaver

Chief Executive Boards International

Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it 

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