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Business Day

Rule of Thumb: Use Principles and Not Rules

Rule of Thumb: Use Principles and Not Rules

Defining a small set of principles that clarify accountabilities and expected behaviours can help organisations improve performance and become more agile.

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Rule of Thumb: Use Principles and Not Rules
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This article originally appeared in Business Day.

Which document does more to advance the wellbeing of ordinary Americans: the US 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 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 US constitution has done for its nation. Companies cannot rely on the proliferation of rules within a rigid framework such as 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.

Read the full article on Business Day.

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