Are you a high-expectations leader, who gets frustrated by people around you turning up but not switching on?

Leading with principles, (rather than managing by policy), is a fundamental competency and mindset for any high-performance leader. Therefore shifting from being a rule-based/policy driven leader to a principle-centered leader is crucial to your own and your team's performance.

Here's what we are going to cover:

1
Why rule-based organizations are so prevalent
2
The difference between policy driven management and principle-centered leadership
3
Why it's advantageous to shift to principle-centered leadership
4
Don't go reaching for your policy-writing pen when someone makes a mistake
5
The rules about rules
6
Four steps to creating principles

Why Rule-Based Workplaces are so Prevalent

A rule-based workplace makes it easy for a manager to manage. S/he can make decisions, without having to think too deeply about it. It is much easier to grab the book of rules and tell someone what to do, than to stop and think through the impact of the decision you are about to make - especially for the long-term.

The down-side is that rules are often used as a cop-out for a weaker manager who reverts to statements like "Look, if it were left up to me I'd do it differently, but I have to follow the rules!"

Interestingly, not only do weak leaders like rule-based workplaces, so too do under-performing team members. They also can hide behind rules by saying things like, "I'm simply following policy."

The advantage of a rule-based workplace is that it does ensure that decisions are consistent.

The disadvantage is that it may not always be the best decision in the given circumstance. And often stops the organization from being as agile as it needs.

Weak managers and under-performing employees both like rules ... because they can 'hide' behind them!

Being rule-based comes at a cost. If you nod yes to these questions, I guarantee your business is not performing at the level that you want!

Is your organization over-burdened with rigid policies, rules, and procedures that stop team members from meeting customer needs?
Rules that don't make sense and cause your people to waste time finding workarounds so they can get their job done?
Policies that are costly both in terms of employee morale and dissatisfied customers?

The Difference Between Command and Control Management and Principle-Centered Leadership

Simply put, command and control (in other words, rules, polices, and procedures) tell people what to do. Principle-centered leadership provides guidelines that empower people to make better decisions.

Policies or Procedures

define specifically what and how to do something. They define specific actions or behaviors.

For example:

Team Members who attend late, on more than three occasions, will receive a formal warning.

Here the responsibility rests with the Management Team to ensure they have a tracking system which 'catches' people who have been absent more than three times and then hand out the appropriate punishment.

A Principle

is a fundamental or general truth, that helps people determine the appropriate actions for themselves in given situations. They are guidelines that indicate what to do, but not how to do it.

For example:

Team members ensure they are in attendance
when they feel responsible for the success of the team

The principle guides the team leader to inspire team members to want to be at work because they believe that what they do matters. The principle assists the leader to think about what he or she needs to do and say to help team members want to be at work, rather than punitively punishing them for not showing up.

As you can see from the two examples above, the primary difference between policies and principles is that Principles are more empowering to Team Members.

Take this simple quiz to see if you can discern the difference between a principle and a policy. Being skilled at this will help you shift from management to principle-centered leadership.

Principles are directional, whereas rules are directive

So what to do? Do we get rid of all the rules and have it as a free-for-all?

No, not at all. This is not an advocacy to get rid of all rules, policies, and procedures.

There's a need for some rules, policies, and procedures in all organizations.

For example, no drinking on the job, no fighting.
But ...

the fewer rules you have, the more agile your organization will be

Why it is Advantageous to Shift to Principle-Centered Leadership

By their very nature rules hamper people from being as efficient and as effective as they might.

A few years back, I was working in an organization which had a rule that purchase orders over $50 had to be authorized by team leaders. This rule was costing us lost productivity, of about two hours each day, as people chased around looking for team leaders to sign the paperwork. Rather than employ more leaders, we needed to empower and trust our team members.

Here are a few reasons why principle-centered leadership is advantageous:

Principle-centered leadership provides the flexibility to respond to the changing needs of your business rapidly
Principles make it possible for people to be flexible and creative in how they resolve problems
Principles enable front-line team members and leaders to be responsive to the changing needs of the market place and to re-design their organization and work processes
Rather than sticking to the way "it's always been done", principles make it possible for people to make better decisions that suit the circumstance at hand, and the objectives they are trying to achieve
Principles inspire people to be a part of the vision they share; rather than focus on the constraints they must be on guard against
People are responsible for the decisions they make (in other words no more hiding behind the rule book)
Enables team leaders and members to shift from 'fixing what is on fire' going from crisis to crisis; to being more deliberate in the choices they make

Stop Putting in a Policy or Rule When Someone Makes a Mistake

In command and control organizations whenever someone makes a mistake, a policy or rule is put in place to stop it from happening again. That's a huge mistake.

What is a far more powerful thing to do, is to start to ask questions like: "How have we not set the right context around this for our team members."

Principle-Centered Leadership: What context did we fail to set?

Case Study

I was recently working with a client who had team members submit some outrageous items in their annual budgeting process. To the extent that some of the requests being made, were pushing some of the line-items in the budget close to 60% more than the previous year.

Now if they'd been rule-based, they would have put in a policy that would have stopped people from asking for these types of items in the future.

Instead, these very wise leaders asked a more principle-based question: "What is causing our team members to not understand our business model, our priorities and our budgeting process?"

By asking that question, instead of putting in policy, they went down the education path. This meant the team members were able to make better choices in the future AND in the process identified hundreds of thousands of dollars in savings in other areas. Because instead of blindly following policy, they were now acting like business partners and making informed decisions.

A rule about rules - Don't make one unless:

You have considered all its consequences,
Will apply it to everyone, and
You are prepared to stand by it, even when it hurts.

Your challenge is to find the senseless rules, that don't fit in with today's fast-moving pace and get rid of them. For example, rules like:

Reserved car-spaces for the management team
Managers wear corporate clothes, and front-line workers wear uniforms
Only people above supervisor level are allowed to sign purchase orders etc.

Principle-centered Leadership: Unwritten Rules

Four Steps to Take When Shifting to Principle-Centered Leadership

1
Identify the values that will drive the achievement of business outcomes
2
Identify all policies and procedures that are irrational and inconsistent with your organizational vision
3
Develop the principles that will empower people to achieve the organizational vision
4
Apply the principles

Click here for more details on these four steps to creating principles.

In Summary

Shifting from Management to principle-based leadership is not for the faint-hearted. It means that you must make decisions based upon YOUR judgment.

When you first start with this style of leadership, you will have people reporting to you who will call you unfair. Because you made a decision this way today and a slightly different way tomorrow.

That's okay.

Because being a principle-centered leader means that you take in the entire context of a situation. Then you work with your team members to make the appropriate decisions for that circumstance.

Being a principle-centered leader does not mean you allow a free-for-all. You must stick to your standards.

However, principles enable you the flexibility to choose a sound approach for each situation.

Certainly, at times you and your team members will make incorrect decisions ... simply learn from those mistakes. Don't put a rule in place because of the mistake.

When people manage themselves based on principles, rather than on a whole bunch of rules, you save your company an enormous amount of money ... you are dollars ahead, and you create a great place to work.