Flexible Firms Learn to Bend the Rules

Psssssst. Do you want to help your company become outstanding? Do you want to know a secret for organizational success?

Here’s the answer: flexibility.

Outstanding companies encourage flexibility in their managers. They understand the importance of flexibility for their organization’s success, particularly in these times when our view of the future can be altered overnight by the action of a global competitor or a technological innovation.

Outstanding organizations are flexible but strong--and are tenacious in helping their employees understand where to be flexible and where not to compromise.

Outstanding companies want to build and sustain flexibility, but they will not compromise their mission and core values.

Flexible organizations are mission and value driven, while inflexible organizations are rule and procedure driven.

Despite the importance of flexibility, outstanding companies are not wishy-washy. They have well defined goals and objectives, and they expect their managers to use their judgment in the interpretation of rules for the accomplishment of organizational purpose. Managers in these organizations stand firm on their mission and values and model them on a daily basis in their decisions and how they are implemented.

Outstanding companies do not want bureaucratic robots that stifle creativity, initiative and morale. These companies nurture initiative and risk-taking. They hire managers who want to lead, make decisions and manage with heart. They fight to root out bureaucratic rules and expect managers to use their judgment.

Organizations that are led more by a book of “procedures and rules” than by managers are inflexible and struggle to adapt and compete.

Unfortunately, managers in these types of organizations tend to make additional rules rather than replace rules with guidelines. And these managers tend to be sticklers for the enforcement of those rules.

These organizations tend to have a culture that views change as more bad than good.

Clearly rules and procedures are a poor substitute for managing and a major source of inflexibility. Using rules is efficient (we don’t have to think or explain), but to do so can be very ineffective. And because an emphasis on rules and procedures focuses on the do-and-don’t details of work, this not only kills initiative and creativity, it undermines the accomplishment of organizational mission.

Have you ever gone somewhere for help and just left frustrated with the bureaucracy instead of having a sense of the organization’s mission to serve the customer? If you have heard these types of comments about your organization, this can be a warning sign of an inflexibility problem.

The world of work has changed. Employees are increasingly diverse in age, nationality and race. And their personal lives are increasingly challenged with the stresses of modern-day life, including the prevalence of dual-career households and single-parent families.

If we are to be effective managers, employees cannot be treated with a set of rigid, simple rules.

From the employee’s view, organizations that are great places to work share a common trait--their managers are flexible in how policies and rules are applied. Policies are guidelines and not rigid inviolate rules.

Yes, using rules is safe, but managers are not paid to take the easy path. Managers are paid to use judgment, to communicate and to care about each employee as a person as they seek to achieve organizational objectives.

Some view being flexible as a weakness. Others view flexibility as a source of unfairness.

Clearly there are areas where we must stand firm. Deciding where to be flexible versus where to stand our ground is an ongoing challenge. But we should have no doubt that we must be firm in supporting core organizational values and principles.

It is in the application of policies and rules where we find fertile ground for judgment and flexibility. “Managing by the book” is not managing.

If we are to build flexibility into the management of our organizations, we must fight the encroachment of rules and procedures on our responsibility to make decisions. We need to build a culture that supports risk-taking and the use of judgment. And we need to clearly communicate our vision so that our organization’s mission and core values are understood and manifested in our decisions. Employees not only need to understand the limits of discretion, but also need to explore creatively the possibilities we have at our disposal.

We need to loosen the rules and strengthen organizational culture. We need to empower our managers to be flexible in the application of rules. We need to strengthen core organizational values.

Let’s remove that bureaucratic coat and create a more flexible organization. Let’s empower employees to use their judgment and build loyalty and morale. Let’s rely less on rule books and use organizational mission and values to guide behavior.

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Gary Izumo is a professor in the Moorpark College business department and has managed his own consulting practice. He is a former McKinsey & Co. consultant and practice leader for the Strategic Management Consulting Practice of Price Waterhouse. You can e-mail him at gizumo@vcccd.cc.ca.us.