74. Solving problems with rules is not the answer

Dear Jan

All around me I see that to correct mistakes, people are introducing more rules, guidelines, binding opinions, regulations, etc. to prevent recurrence. Large companies are the most prone to this and politicians and governments are the true masters in this, perhaps, unsurpassed.There is so much legislation and regulation that the Dutch tax authority has pulled the emergency brake and will now focus on simplifying legislation, as it is simply no longer possible to enforce all this legislation. The Netherlands also has one of the most onerous labour and wage laws in Europe and this costs businesses and agencies hundreds of millions of euros extra to meet all the requirements. All of this has a negative effect on productivity and profitability.

If something goes wrong we, being wise managers, analyze and set new guidelines, with a few commandments and some prohibitions. And so it goes on, on a weekly and monthly basis and soon the executives (those who have to do the work) are drowned in a mass of rules and if they applied all of them, they would not be able to do their work effectively.

As a company, you must of course comply with all legislation, and for this you need certain procedures and internal rules. You cannot escape this and if you ignored the legislation, soon the tax authority and other controlling bodies will be on top of you. I am addressing here the “rules-that-are-made-by-managers-who-only-have-a-theoretical-knowledge-about-the-work” (in government these people are called politicians).

I think, more rules are never the solution, as many rules are created for things that rarely go wrong, but are now applied in general. That paralyzes and is costly. And even the Dutch tax authorities have now realised this.
I think the answer is to transfer knowledge and train the people who do the work for as long as necessary, to give them decision-making power and keep on coaching them and supporting them.

I think I have an innate dislike of rules and try to have as few as possible at our company. Everyone is relatively free to act. However, too few rules is definitely not a good idea. A clear structure is important for everyone to be able to function properly. Moreover, it is almost impossible to have too few rules if you have managers in your company. In summary, I would say – keep it as simple as possible. “Less is more” is definitely appropriate in this respect.

Best regards,

Gerard