One of the reasons why our organizations need more emphasis on policies and less on rules is that rules so often force the organization into difficult or impossible situations.
This week there has been some news discussion about new rules the Department of Education is proposing on college student aid. The government wants to crack down on “unscrupulous” for-profit colleges that get a lot of money from student loans and then leave the graduate with a lot of debt and no job. The idea is good, but then comes the rule setting.
The rules proposed say that for-profit schools that have low repayment rates and high levels of debt for students, will not be able to get more student loan assistance for the students. What? For profit only? Doesn’t the same rule apply to non-profit schools like state universities? The answer is no.
The problem is that when we start making rules we fall into the trap of one of two evils – we either structure the regulations to cover everyone equally, or we fall into the other trap of making decisions that would have some benefit or be panelized more than others. In other words, the rules would start to pick winners and losers. The Education Department regulations obviously pick non-profit schools over for-profit schools without regard to many other factors.
It’s easy to say that the rules should cover everyone, but then we quickly fall into the trap of policies like the “no tolerance” weapons policy at schools that would have students suspended for accidently having a dinner knife locked in a car in the school parking lot.
The answer to the problem is empowerment. A bureaucratic culture organization will tend toward the rules. They are safer and there is less risk that executives will be criticized. The collaborative culture organization will spend more time dealing with the policy and then allow employees the flexibility to apply the policy in a flexible manner.
