Rules vs. Guidelines – MBA Learnings

One of the more powerful ideas I’ve learnt in my ‘Values Based Leadership’ class is understanding the power of using rules vs. guidelines in setting culture.

Culture is by far the most powerful change tool that exists. If you really want to change behavior, it is the culture you should turn to. The culture is the mixture of norms and rituals that act as the default behavior in every group or organization. There are rule-based cultures and guideline-based cultures. There are advantages and disadvantages to both. And, to analyze the difference, I thought I’d examine how I’ve approached designing my own culture.

There are many ways to think about designing culture. I think of culture as a set of habits that we incentivize, one way or another. The basic habits I’ve been working to develop have been as simple as – sleep 8 hours, eat healthy, exercise 5 times a week, and meditate. This journey alone has taken the best part of the last 4 years and I am still not done. The first habit I sought to fix was sleeping 8 hours. And, my first instinct was to design a rule based system. When the 8 hour rule didn’t work, I mandated a 530am compulsory wake up as a way to encourage myself to sleep at 930pm. This didn’t work well either as I ended up sleeping late and going into work sleep deprived. I had a few similar experiences with attempting to exercise and meditate. These experiences taught me a couple of valuable lessons about rule-based systems. There is no doubt they are great when you just get started as they make you feel like you accomplished something. But, they work on the carrot-and-stick idea of motivation. And, as modern research has demonstrated, ideas of autonomy, mastery, and purpose motivate us a lot more than the carrot-and-stick model.

So, my next series of attempts were using guidelines. No punishments involved here. The first guideline was to attempt to sleep 8 hours every day. 1 year into that, I did that most of the time. Eating healthy was much easier and I didn’t have to try hard. Exercise was a real beast and I started in earnest in January 2013. Since then, I have averaged exercising ~5 times a week (typically a mix of 3-4 times in the gym and football in good weather). Meditation was much harder. After a rules based attempt in mid 2013, I gave meditation up. However, when I worked on my “tracking my purpose” last year, meditation was an important part of what I considered my ideal personal culture. But, as I swear by guidelines these days, I didn’t attempt to force it. As I tracked my progress every week, I just resigned myself to putting in a 0 as my meditation count for the week. And, after 6 straight months of putting in zeros, I abruptly decided to start meditating as soon as I woke up on Monday last week. I logged into my Headspace app and got started again. I’ve been meditating every weekday since.

What changed? I think the fact that I expected meditation to be a part of my personal culture meant I had an subconscious reminder every week. Next, the fact that I didn’t force it meant that it happened out of intrinsic motivation. And, now that it is there, I have no intention of letting it slip. And, even if it does, that’s okay. I’m sleeping, eating, exercising and meditating because I want to. That’s just how I like leading my life. (“This is how we do things here” – is the all powerful statement of culture)

It is that realization that makes a guideline-based culture incredibly powerful. In some ways, the guiding principle of a guideline-based culture is – “I trust you to do the right thing in the long term. And, if you don’t, be kind to yourself and come back and fix it tomorrow”

It is as empowering as it gets.

PS: The MBA Learnings series is an example of a guideline. It is 1 per week. I aim to do it on Wednesdays. But, the one per week guideline is much more important than the Wednesday rule idea.

What do people like you do?

The main beach at the Thai island town of Krabi has 6 Indian restaurants within a 100 metres of each other. That’s quite a number for a town of that size. What astonished me was the enthusiastic salesmanship outside the restaurant and outstanding customer service in the two places I visited. In isolation, this is amazing as I am fairly sure the same restaurants in India would have had forgettable customer service.

Add context to it, though, and it makes sense. Between the 6 restaurants are many many Thai and western restaurants run by equally enthusiastic staff. The customer service bar is high and every one needs to step up their game to survive. The staff at these restaurants don’t think of what they’re doing as special. That’s just the norm to them. It is what they need to do to survive. And, perhaps most importantly, it is what “people like them do” in Krabi. Their tribe just gets customer service.

So, what do people like you do? What are the tribes you are a part of known for?

If you are striving for personal change, perhaps you should stop punishing yourself for your seeming inability to do so and focus on joining tribes that are known for what you are striving for. If you want to get fit, make friends with people who exercise.

The most powerful change is one of culture.

Understanding management debt

Ben Horowitz, the former CEO of Opsware and now-successful venture capitalist, has a great post on management debt. He offers a slightly deeper explanation in his excellent book – The Hard Thing About Hard Things.

I have been thinking about management debt over the past few months but didn’t have a term for it. I am now able to put the word into context and would like to share some of my lessons.

Management debt is when a leader or manager (I will stick to “leader” for simplicity) takes a call that works better for the short term than for the long term. Any such decision is equivalent to the leader taking a loan for a short term pleasure and will require the leader to pay it back with interest. The rates of interest on certain kinds of management debt are really high. In his blog post, Ben details 3 situations where he’s seen management debt –

1. Putting two in a box – Trying to keep two talented folks in his company during a reorganization by making them co-heads.
2. Over compensating a key employee when she has a better job offer because she is key to a current project.
3. No performance management or feedback process – leading to surprises when things don’t work well.

I haven’t managed a billion dollar company and, while I am sure my experiences don’t compare to those of Ben Horowitz, I have found myself guilty of using management debt multiple times without realizing it on multiple projects. And my lessons are as follows.

I. Define culture early – it is hard to change. Culture is set by a set of principles that defines your approach to work. This needs to be defined really early or things get really messed up down the line. One such example is a project I’ve lead for nearly 3 years – when we started, we took a scrappy approach towards getting things done. I figured that the focus ought to be to just get results and we’d find time later to define how we’d like to do it better. So, we took nearly a year to define our values, ways of working, etc., and just kept the habit going. And, you know what? 1.5 years later, we still haven’t gotten past our scrappiness. Heck, we don’t even know what our values are.

The extent of the damage is evident because another member this team and I are also part of 3 other project teams and we behave differently in those. Culture is powerful and is hard to change once it is set. I am still not clear how to solve the problem with the culture issues in this project – clearly, I’m still paying the interest on my management debt.

2. Create a 6 month feedback process. I’ve worked on projects where there was an attempt at weekly performance management and then run projects with no performance management. I find that a 6 month feedback process is reasonable and important. 1-3 month feedback can work okay on short engagements but feedback systems shorter than that become carrot-and-stick systems in my view and don’t give people enough time to get comfortable. If you think this is hard to do in a busy day job, I can assure this is harder when you are working on a project(s) in addition to your day job on weekends with limited time. That said, it is important. Else, you are just taking on more debt. And, I have learnt that the interest on this one is costly.

3. Create a list of management principles. As I’ve been thinking about 1 and 2, I’ve realized that what I am missing is a list of management principles. I have an implicit list but it’s clearly not been enough to provide clarity. These management principles will help you stay true to your goals and will ensure you are firm and insistent on the right things. Once you have these principles defined, don’t compromise.

I am going to explore this topic in greater depth over the next few months. More to follow on setting culture, designing feedback processes, developing management principles, and the like.