Fewer Rules = More Profit. Discuss!
I read a great article recently by James Timpson, the Chief Exec at the Timpson shoe repair business.
About how he’s grown his business and his bottom line by letting go of the military-style layers of corporate rules that he originally built his business on.
To the point where he’s proved that fewer rules = more profit!
Instead of rules and controls he gives his team flexibility and freedom to do the right things. He trusts them to make the best decisions for the company.
There is of course an inevitable conflict between freedom and control. As a recovering accountant I am fond of financial controls, but it got me thinking about just how much we can box people in and strip away their opportunities to grow if every part of our business is governed by rules.
I have a privileged position; I get to go into businesses with a fresh external perspective and I can see and feel things like the culture and happiness of a business. Things it can be hard to see when you’re on the inside.
Looking back I can think of several businesses where the office was devoid of energy, where people did just what they had to, who never brought 100% of themselves to work. And these were the companies who had lots of rules, and lots of performance measurement.
You could just feel that it wasn’t working
And I could see it by looking at their figures.
So why do we put all these rules in place?
When we start off we don’t have all these rules. We just do whatever it takes to get our business off the ground. That passion, that willingness and necessity to try anything and break rules is what it takes to make a business work.
Then we start employing people and the rules kick in.
Why do we feel the need to hold on tighter?
Are we trying to make sure everyone does it EXACTLY the way we do?
Have we employed people we don’t trust?
Because we know damn well how all these rules would make us feel.
Don’t confuse processes with rules
There’s clearly a balance needed here; I AM a big fan of having processes in a business. They’re a no-brainer if you want to scale your business. Once we’ve worked out the best way to do something it makes sense to create a process so everyone knows “how we do it”.
It takes away the frustration points, it stops us dropping the ball and makes sure stuff gets done, and if everyone did things their own sweet way we’d have chaos.
But we need to be stay open to new ideas, better ways to do things, and not engineer out any room for people to think and contribute their ideas. Too much process can kill the spirit of your business
I’ve seen so many good sales people in particular crushed by businesses by trying to force them into their set of rules, instead of taking full advantage of their experience and relationships.
Lots of rules brings out the worst in most people
I’m sure you remember when you had a job. There were almost certainly crappy rules you didn’t agree with. Rules that make you feel and behave like a stroppy teenager.
James Timpson found that his great people just found the loopholes and found ways to do what they wanted anyway. Either that or they left.
So how do fewer rules = more profit?
His colleagues who work in branches are free to order what stock they want (they know their customer better), create their own displays, paint the shop what colour they like, give discounts and do deals, do some jobs for free. They know that relationships and kindness are the most profitable things they can do.
They get to use their own judgement, try things to see if they work, engage genuinely with their customers and as a result they get great bottom line feedback that it works.
How simple could you make your rules?
As we think about coming back to work, from a year where many rules went by the wayside as you trusted people to work at home (and they still got the job done) what rules could your business do without?
What are you worried about? No really – dig into that. What actually do you think might happen if you has less rules? What are you trying to control?
What could you let go of?
What rules do your mavericks currently break or find ways around?
Ask your team, I’m sure they’d be happy to tell you!
James Timpson has 2 main rules:
- Put the money in the till (be honest)
- Look the part. Have standards. Look and behave in a way your grandparents would be proud of.
“Great people don’t need controlling, they need freedom and trust”
His point is that if your business is filled with amazing people then you don’t need as many controls – you need freedom to bring out the best in those people. Otherwise what happens to those amazing people? They feel constricted, they don’t have the latitude to try new stuff, and they get demotivated
And then they leave you.
The balance to fewer rules
I strongly believe in using a powerful vision, (Vivid Vision is my tool of choice) collective goal setting and shared accountability as the way to bring out the very best in people AND increase your bottom line.
Make sure your team know exactly where you want to take your business, show them where they fit into that vision and give them some space and autonomy to help you achieve it.
And the final words from James…
Let’s do things with more trust, fewer rules, have more fun and make more money!
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3 年Great read Serena Humphrey FCMA - we have a vision as well as key principles / values which underpin how we work. As a small team, at the moment, we don’t actually have any written down rules although we have plenty of processes. We have weekly meetings, quarterly and annual following the Traction book format, so we all have goals too. I trust my colleagues to always do their best, but I’m now wondering as we move forward and hire more talent whether we do need any rules ??
Third Sector consultant, broadcaster, former banking sector type. Founder of Third Sector Network and part time Leicester City apologist.
3 年I agree wholeheartedly with the principle of this. But I'd say I lean more towards "Less micromanagement = More profit". Whenever I read stories about business owners who's taken 'drastic' steps to strip away the traditional elements of business (people who sent all their staff home before #COVID19, abandoned allocated vacation time and introduced fully flexible hours etc.) it tends to be more a case of they've put actual tangible trust in their team to get their job done and left them to it rather than ditched rules. There's nothing wrong with 10 rules, 100 rules or 1000 rules, as long as they're all sensible, fair and have a justification for existing. You start introducing 'rules' like an unnecessary dress code, or banning personal phones or strictly limiting break times (etc) that's just management trying to micromanage everything in the belief staff who aren't controlled will become un-productive. Which is palpable nonsense. Every time you step out into the World you're subject to thousands of laws. But most of them don't relate to what you're doing so no-one is checking to make sure you're complying. The rules aren't the problem, it's the manager who thinks they have to enforce every rule that is.
Helping Accountants Have Better Meetings | Co-founder of Agendali.com | Author of Improving The Numbers
3 年Agree, I suggest client think about 3-5 core values driven by what you won’t stand for. Not seen two before!! Amazon have 17.