4 Ways to Balance Company Rules With Values

How do you keep your business flexible and efficient at the same time?

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By Joel Trammell


Opinions expressed by Entrepreneur contributors are their own.

I recently interviewed Wade Eyerly, CEO of the new all-you-can-fly airline, Beacon, who made the most interesting observation about culture I'd heard in a long time: "We often look at the work of others like a menu offering with no prices. We think other people's work is just a buffet we've already paid for."

He was referring to cultures where employees operate on autopilot (pun intended), going through the motions and taking others for granted. Respect, gratitude, openness and creativity permeate the best cultures. This becomes harder as a company grows. Startups inevitably move from a values-based culture -- where everyone works to support the founder's vision -- to a rules-based culture governed by processes and procedures for everything.

Related: 10 Examples of Companies With Fantastic Cultures

For businesses to prosper, more and more transactions have to happen automatically. On one hand, going too far to the rules-based side will lead to an organization that is too rigid, with employees often doing things by rote that no longer make sense. On the other hand, a purely values-based organization will stagnate with employees spending too much time determining how to handle each situation.

The question is -- how can CEOs and leaders achieve the efficiencies of a rules-based culture while leveraging the flexibility and openness of a values-based culture? The best way to balance this tug of war is to ensure that employees feel respected, secure, trusted, aligned and treated fairly. Try the following approaches.

1. Create values to guide behavior and apply them consistently.

Values are crucial to a high-performance culture, promoting autonomy while building camaraderie. To be effective, the values must be aligned with the CEO's unique beliefs. Everyone must understand the CEO's vision, and what he or she believes should be prioritized in day-to-day operations. In this way, employees are more likely to make decisions the CEO might make.

Also, to provide real guidance on decision-making, the values should be behavioral. For example, "honesty" as a value doesn't necessarily help employees make the most practical, day-to-day decisions. Everyone expects people to act honestly. At one of my former companies our documented values -- such as, "We act as company owners and hold ourselves accountable," and, "We are easy to do business with" -- were specific enough to facilitate decisions.

Finally, consistency is key. It's often easier to be consistent with values when times are good. When the going gets tough, many leaders ignore their stated values or apply them selectively. The benefits of having strong, clear values can only be realized if they guide every decision, not just some decisions.

Related: 5 Elements That Shape the Core of a Strong Startup

2. Let employees own the rules.

To engage employees and still operate efficiently, let employees own the rules. Teams should have the ability not only to set the rules but also to modify them based on changes in the business. This helps create a culture of responsibility and adaptability and minimizes situations where employees mindlessly follow management's rules.

The key is for employees to understand the why of what they do from a bigger-picture perspective -- which demonstrates the need for a strong vision and mission -- as well as on a more granular scale. This is critical to nurturing and motivating creative, innovative and productive employees.

Management's role shifts from dictating procedures to coaching the team on the company's goals and values. Managers also ensure that their groups are aligning their efforts to achieve higher-level goals.

3. Align corporate-level policies with values.

Corporate policies and procedures often just pile up over the years, one on top of the other. CEOs are held responsible whether they created these or not. Look for situations in which policy isn't aligned with stated values. Question all ways of doing things, especially if no one knows why a rule is followed in a particular way.

4. Build a transparent work environment.

Transparency is a hallmark of most high-performance cultures. Employees should have access to every bit of information that might help them perform better, collaborate with others and be more creative. Whether they are being guided by values or procedures in any given situation, employees who are more knowledgeable better contribute to the company's goals.

Efficiency and creativity. Predictability and flexibility. Leaders must know when and how to build each into the company's culture and operations, shifting as the business grows and changes.

Related: Let's Be Real: Why Transparency in Business Should Be the Norm

Joel Trammell

Veteran CEO; CEO, Black Box; Founder, Khorus

Joel Trammell is CEO of Black Box, which provides IT infrastructure services, and the founder of CEO software company Khorus. He is also the author of the The CEO Tightrope.

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