This article originally appeared in the Bangkok Post.
Which document does more to advance the well-being of ordinary Americans: the Constitution or the Internal Revenue Code? We realise it's not a completely fair comparison, as the documents serve different purposes. But as a thought exercise, which would you prefer to govern your working life?
Given how the complexity of the modern tax code has spread like a virus, instructions for the Form 1040 alone have grown from one page in 1913 to 104 pages today, few people would cite it as a high-functioning system for collecting taxes. And the Constitution? It has proved to be a practical, resilient credo for more than two centuries.
High-performing companies take care to design an operating model that can adapt to changes in their environment, just as the Constitution has done for its nation. Companies cannot rely on the proliferation of rules within a rigid framework like the US tax code. That would limit employees' problem-solving abilities and couldn't possibly account for every situation they encounter.
It's far more effective to define clear principles for how people work together so that a company can stay agile with minimal bureaucracy. Principles liberate people to do the right thing by providing a framework for making the right choices. Rules remain important in some areas, such as defining safety practices in mines, but companies can limit where such detailed guidance is necessary.