Policies are Tools. They are not the Result.

Organisations often treat compliance with policy as an outcome. This approach confuses the tool and the result. Policy is guidance, should allow for exceptions and should change to deliver the best results.

When I began my career as a banker, an experience colleague introduced me to Lending Policy 100. Numbered to sit at the beginning of a long list of lending and credit policies, the purpose of Lending Policy 100 was to remind bankers that policy is merely a guideline for action and people should always exercise judgement.  To put it in simple terms, Lending Policy 100 was a policy to explain that policies are only policies.  

This was bureaucratic absurdity but a useful tool. Lending Policy 100 came in handy when you needed to ask someone to exercise judgement.  Appealing to another policy gave people the wriggle room to escape the strictures of another policy that would otherwise be poorly applied. Lending Policy 100 enabled you to turn the conversation away from the tool and back to the result.

Policies are just tools. They are guidelines to help people do their job in an efficient and compliant way. Tools require application to specific circumstances and employees need to make judgement calls to interpret and apply the policy in each circumstance. No tool is always effective. What matters is how it is applied.

When organisations mandate policy compliance they have confused the tool and the result. Organisations fail to achieve their outcomes when they refuse to acknowledge that you can’t anticipate every circumstance, that things change and that employees need to be trusted to exercise discretion in cases to get the right outcome.

Focusing on perfection in policy compliance leads directly to your employees saying “But that is our policy” the next time they need to explain a bad decision to a customer, employee or other stakeholder. Zero tolerance for exceptions is zero tolerance for the reality of your customer’s world. There is no better way to show indifference to customers.

Responsive organisations accept that policy must work to achieve the desired outcomes. They focus on employees commitment and capability to achieve these outcomes, not compliance with policy. They allow for exceptions and they allow for people to ask for changes in policies when required. Policies can be a useful tool in organisations (even if only for legal reasons), but they must be applied as an agile and responsive tool.

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