Policy Paralysis or Corporate Productivity

By Abraham Laleye

A fox boasted to a cat one day about how sly and wily he was. “I’ve got all kinds of tricks,” the fox said. “For example, whenever, I hear the dog coming, I know a hundred different ways to escape.”

The cat was impressed and humbly said, “Your cleverness is amazing. As for me, I have only one way to escape, and that is to climb up a tree. I know it is not as exciting as all of your ways, but it works for me. Maybe someday you will show me some of your different escape routes.

The fox smiled smugly. “Well, friend, perhaps, I will have free time one of these days, and I can show you a trick or two.”

Shortly afterward, the fox and the cat heard a pack of hunting dogs barking nearby. “They are coming this way!” the cat shouted.

In a flash, she scaled a nearby tree and hid herself in the leaves. The fox stood there trying to decide which of his many tricks to use. Paralysed with indecision, the fox waited too long to make his move and the hunting dogs pounced on him.

Business Application:

Policies, rules, do and don’t are inevitable part of any organisation be it formal or informal. In many organisations, what is often found is are two extreme situations: one in which there are flexible, unpredictable, informal, and unwritten rules often residing in the minds of few key leaders of the organisation. The other is an environment in which there are written, predictable, formal, and inflexible rules or policies for almost every conceivable situation action or decision in the organisation.

Neither of these two extremes is good for effective and efficient running of a business organisation. While it is important to develop specific set of rules, guidelines, or policies to direct and reward actions in any organisation, it is important to know that policies should not be too many, two complex, or too difficult to memorise by the company’s operational and functional staff.

One important aspect of corporate policies or rules that many organisations often overlook is this: every policy must be directly and be meaningfully linked to just a few set of principles or values of the organisation. These set of core principles – usually about 5 or at most 7 should run deep in the semantic and procedural memories of the employees, in such a way that every detailed policy can always be reproduced from these few core principles. This way policies are easy to memorize, less mistakes are made, and operational and strategic activities are less contradictory as well as highly synchronised.

This principle is often violated by organisations when key policy documents are copied from competitors or open sources instead being an outgrowth of the company’s core values or principles. The best corporate rules or policies are those that provide a work environment with mutual trust as well as consistent work effectiveness and efficiency.

Fukuyama (1995 ) comments:

” If people who have to work together in an enterprise trust one another because they are all operating according to a common set of ethical norms, doing business cost less. Such society will be able to innovate organisationally, since the high degree of trust will permit a wide variety of social relationship to emerge… by contrast, people who do not trust one another will end up operating only under a system of formal rules and regulation, which have to be negotiated, agreed to, litigated, and enforced (if necessary by coercive means). This legal apparatus serving as a substitute for trust, entails… transaction costs. Widespread distrust in a society, in other words, imposes a kind of tax on all forms economic activity, a tax that high trust organisations do not have to pay.”

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