moneyFYI
Financial Freedom Is Merely Organized Common Sense
Fewer Rules Work Better
Businesses, families, and societies tend to operate based upon one of two possible systems. They can be rule based or they can be principle based. Many begin with principles and gradually evolve rules.
Should they?
In the early transition from principle to rule there are efficiencies. Codifying the application of principles works better because there are automated responses to a given set of conditions.
Fast. Easy. No thought.
Problems arise when people begin to value rules more than the principles that they reflect. Rules for the sake of a rule. Precision. Nothing ignored. That is limiting.
No rule adequately addresses all possible conditions. Rule makers do not like that and often respond with more specific and complicated rules. That doesn’t work well because a rule should add simplicity. Essentially it must embody the principle it reflects.
You cannot turn a principle-based idea into a set of rules that looks like an instruction manual. Despite that prohibition, we see examples every day. Politics seems to want to turn principles into rules. The result being that any situation not clearly covered by the rules falls into limbo and cannot be resolved except in expensive court battles of long duration. Common sense or common law like decisions no longer apply.
It is interesting how even meaningless institutions fall into the trap. The NFL and its multimillion dollar investigation of Tom Brady and the New England Patriots is now the standard in overreaction to breaches of trivia.
NFL Rule 2, Section 1 says the ball must be inflated to between 12.5 PSI and 13.5 pounds PSI. The balls used by the Patriots were under-inflated by about a pound.
Because the rule exists, someone must do something. No one ever asks, should the rule exist at all.
If each team uses their own balls, how can there be a need for a standard. Brady likes low pressure, Aaron Rogers likes it high. Speaking from experience, all receivers like it lower. If there were any advantage to being outside the defined range, everyone would immediately change. The rule provides no fairness advantage, so why have it?
Poorly designed rules obscure principles. Weak leaders tend toward rules and eventual pettiness. Simple, easy to blame others. Strong leaders tend toward principles and standards and growth.
Examine the rules you have for customer service. Consider the rules you have for children. In neither case can you anticipate all possible conditions. Principles must be supreme when rules fail. If people are used to being governed by rules, they will make weak decisions when forced outside the rule set.
Standardization, regulation and the resulting rules cause more problems than they solve and they do so at a high cost.
Be sure every rule adds value. Simple standards and fewer rules work better.
Contact: don@moneyfyi.com
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
moneyFYI 
Another bell ringer!
Thanks John. As I recall you liked to codify process but never lost track of the underlying principles. Probably why it resonates. Best