One Size Fits All (Not!)

Often I have railed against the stupidity of management, when designing one size fits all “round hole” policies. It is the single most abused policy anti-pattern in my experience.

Policy Structure:
For the purpose of this discussion, any policy can be divided into three components:

 

  • Benefits (why I need a policy at all)
  • Means (How we will get the benefits)
  • Measures (How we will know the policy is working).

Policies are often not “free”, in that there is some cost to implementing the policy. Policies often have “side effects” that are changes not specified in the benefits. These side effects can be positive or negative. Usually, the side effects of policies appear as we have to adjust business processes and practices to comply with the policy. These adjustments are evidence of “square pegs”, or gaps in the policy that do not contemplate the essential complexities of the business model.

The old aphorism – “if the only tool you have is a hammer, then every problem starts to look like a nail” derives from this type of anti-pattern.

Today, I want to look at they typical reasons that policies can be written this way, and how we (as policy makers and influencers) should defeat them.

1) Cost – It is less expensive to support the means if everyone does it the same way.

 

This is a LocalOptimization of policy implementation costs, against policy benefits. In fact, the policy could have side effects with cost consequences for the organization far beyond the cost of implementation.

 

One could posit that if the frequency of the square pegs is low, so that provides a global optimization of cost, but over time the frequency of square pegs could change relative to the whole, so even if the policy represents an initial cost optimization, if there is not monitoring or measurement – around the frequency of policy outliers this optimization, could experience inversion.

 

At a minimum, the policy (as written) must recognize that it represents a compromise to effect cost optimization, and that a regular evaluation should be performed to ensure that the cost optimization continues to be valid.

 

Many times this becomes a problem when the policy is initiated by one subunit of an organization, but the square pegs (and the cost associated with them) are realized elsewhere. It leads to a case, where one unit’s profitability rises, and anothers drops as a result of the local optimization.

2) Enforcability – It is easier to enforce a simple policy defining a single simplistic means, then to construct appropriate measures of real benefits.

 

In my experience this rationale usually has to do with risk management or regulatory compliance. It is a local optimization of the work to ensure compliance or consistent risk. The problem is, that often we are optimizing the work to ensure compliance at the expense of the work that generates revenue or produces business value.

 

When we create policies that make it harder to generate revenue we are “applying the tourniquet to the neck” of the company. It is a fundamental example of short term thinking. Likewise, when we create policies that make it harder to produce business value (reduce cost, enable growth, reduce risk) we are reducing our return on investment in value programs. It can feel (to leaders of those programs) like fighting with one hand tied behind our back, or like we are in a straightjacket.

 

If all it takes to loosen the tourniquet, or untie the restraints is a diversification of policy so that it contemplates different ways to acheive the same goal, why on earth wouldn’t we do that. If the cost of enforcement increases faster than the rate of revenue enablement, or of capital expenditure to produce value, then we should consider things differently. But one must consider all aspects of cost of such policy constraints.

3) Ignorance – It is too hard to understand how this policy will affect “everything” so we will just make a policy and let it be someone else’s problem.

 

Don’t get me wrong, I don’t think policy makers ever think this thought. They sure as hell never say it out loud. But actions speak louder than words, and some policies come out and look as if the policy makers simply don’t understand what is going on in the organization, and haven’t carefully thought through the impact. Sometimes it feels like policy was written by Alfred E. Neuman (“What me worry?”).

 

Sometimes senior managers who are ex-practitioners see the world as they remember it from their time in practice – and don’t recognize the details of change. Other times policy makers are simply managers who don’t take the time to understand the details of practice to asses the impact of policy changes.

 

Other times, the organization incents managers in a “check the box” mentality – which I would describe as supporting hollow victory. This incentive system allows a manager whose objective it is to define the policy to “get credit” merely for getting the policy written, irrespective of the results. Granted in many organizations it is hard to bring management to consensus around policy changes – harder still to hold them accountable for results – so policies often don’t measure benefits they assume them.

4) Unclear – It is not clear from the policy what benefits it was trying to accomplish in the first place.

 

This may be my favorite anti-pattern. Perhaps the policy was established before the current challenges emerged. Perhaps the policy makers were inarticulate. Perhaps the mandate when making the policy was simply to “get controls around” something. If we are not clear on benefits, certainly our means and measures are not going to be optimized.


So what can be done? Policies can be changed. Policy makers can be educated. Costs can be assessed. – this is about getting information flow back to the point of policy construction. Organizations should have regular policy reviews – where they assess the impact of new policies, and changes inthe business environment to ensure that policies are performing according to their intent, without unintended consequences.

Those of us who feel the constriction of the tourniquet or the restraint of the straightjacket should not sit quietly by, but should expose the policy as the source of cost, lost revenue, greater capital expenditure, etc. We should provide alternative policy proposals (especially specific to our unique context) that would accomplish the intent of the policy without the negative consequences, or with reduced consequences.

Policy makers and influencers should be conscious of the intent of the policy, and ensure that the intent is clearly outlined in the policy itself. Sometimes policies that are written, are focused on the methodology for acheiving the intent, rather than exposing the intent directly. This can lead to enforcement strategies that measure the methodology rather than the results.

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