Train Station

Catch Your Train: the 3 M’s of Transformation-Friendly Rules

Transformation ChallengesYou take the same train, every morning, at the same time. You don’t need to check, because it’s always platform number 2, day after day. Until now. You are sitting on the usual bench, at the usual station. You are checking your favorite tweets on your smartphone, when you suddenly realize that your train has just stopped in front of you. But on platform number 4!

You’ve got two alternatives:

  1. You run like hell, upstairs, left, and downstairs to catch it anyway, or
  2. You stay and wait for the next one, despite knowing that you’ll arrive late at the appointment with your customer.

What’s your decision?


Environmental Changes and Corporate Rules

Let’s apply a simple analogy to business life, now. Let’s make the case of unanticipated and abrupt changes in some environmental variable. Our business model is at risk. Think, for example, of regulatory, macroeconomic or technological changes and of how they affect our competitive ecosystem.

Not all changes, though, are received by the organization in the same way. On one hand, think of a change in the laws that regulate your sector. It’s a clear, easily recognizable signal. It will quickly spread throughout the organization, without much questioning or resistance. On the other hand, consider the spread of a new technological advance. Think of the diffusion of mobile connectivity or of machine intelligence algorithms. Besides being trickier to understand in themselves, such changes unchain contrasting feelings and reactions, and often resistance.

Besides the psychological, a much more controllable factor contributes to decelerating the pace of reaction to changes. A deliberate product of human creativity, corporate rules, often stand there to make things worse. The form in which they typically materialize is that of written policies and procedures.

Policies and procedures are not bad in themselves. When properly designed, they help in setting standards and in creating a common language. They facilitate efficiency and communication. Equally, corporate rules can also be a phenomenal obstacle to your change, innovation and transformation challenges.

In extreme cases, procedures exist with one single objective: complying with the requests of some junior auditor in charge of filling in some annual checklist.

If there are good reasons for having them, the true question about documented rules is: what can we do to keep the upside while mitigating the rigidity-related risks?


Transformation-friendly Policy and Procedure Design

Policies and procedures do their best job under three correlative conditions. We will call these the 3 M’s of transformation-friendly rules. They must be:

  1. Meaningful,
  2. Minimal, and
  3. Managed.

Meaningful. Rules must have a purpose and must be properly communicated. In other words, they must be designed for value. They must help in accomplishing some job-to-be done. The gains deriving from following the rules or the pains they help to prevent must be identifiable and explained.

Minimal. In a changing environment, obsolescence – and maintenance costs – grows exponentially with the level of detail. Keeping our procedures simple also make them more robust against external dynamics. We can attain this goal by concentrating on principles rather than on tasks. The former are less subject to future reviews.

Managed. In the present-day accelerated world, rules require a continuous check against reality. If you’re not ready to maintain and frequently update your policies, you’d rather not have them at all.

Now it’s your turn. How would you assess your company’s policies against the the three criteria listed above?

And you? Will you catch or will you miss your transformation train?


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