MBA1899 Do Company Policies Work?

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Hey oh welcome to the Hundred Dollar MBA show. Cause business life is a busy life. That's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and in today's episode you will learn. Do Company Policies Work? Many new businesses look to other businesses or companies they worked for when they're starting out and they decide to create similar company policies, rules, regulations, what as a team we can and cannot do. But do these policies really work? Or are these just a formality that we put together just so we can feel like we're professional? That's what we get into. In today's episode, I'll share with you what actually does work when it comes to your company policies. How these policies don't need to be your burden. They can be built and created by you and the team. And why only having a few rules works best. So let's get into it. Let's get down to business.

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I remember when I started my first business, I thought this was so, so important and that I couldn't hire my first employee unless I had all my company policies in order. Today I would tell my former self, nothing can be further from the truth. Company policies are very much like classroom rules. Remember in grade school, your teacher would have a list of classroom rules on a poster or something on one of the walls in the classroom. And the rules would say something like, there's no cheating, one person speaks at a time, show respect, things like that, right? And on the first day of school, your classroom teacher would go over those rules with you. So you'd be in the know of what the rules are in the classroom. But as a former high school teacher myself, I know that the reality is that the poster is not really the classroom rules. Those are not the rules. The real rules are what you can and cannot get away with. For example, if one of the rules says there's no talking during a test or quiz and a student talks to their neighbor during a testing quiz and, and nothing happens, the teacher does not do anything, it doesn't even get recognized and there's no consequence. The rule is, there is talking during a quiz, you can talk during a quiz because that is the reality. Reality is the real rule. So policies and rules, even in business, don't really mean much unless you're willing to exercise them, you're willing to enforce them. This is why I recommend having less rules. Only have a handful of rules or policies that you really, really believe in. Because the more rules or policies you have, the more work you're going to have to do to enforce them. Because people will test the rules. This is just human nature. This is why I think it's super important for you to really understand the values of your company. What kind of business do you want to run? What kind of people do you want to have on your team? By exploring this, you can then come up with the policies that really matter. The ones that you really, really believe in the and not the ones that you think you need to have because everyone else has them or to be so called professional. So company policies do work, but you need to choose the right ones for your company and be willing to enforce them. For example, one of our policies or values in our company, and that's in our company handbook, is we need to always be respectful with each other as a team. And this policy is really explained because what does that mean, to be respectful? Well, it means that we're going to disagree sometimes times in the company. There's nothing wrong with disagreeing with your colleagues, but we have to disagree with respect. We can't shoot down people's ideas. We can't dismiss people. We gotta be conscious of the fact that the way we say things come out of collaboration and care. Now, this rule would mean nothing if somebody broke this rule and nothing happened. And I was tested on this rule a few times in our company history. We had great employees, very talented people that broke this rule and they're no longer with us. And it's super simple for me to make this decision to let go of an employee because I don't have many rules. Right. I'm not asking for much. I'm asking for them to follow a few policies. And these are policies that they should be happy to follow because they foster a great work environment. So choose your policies carefully. One of the things we do in our company is that we have a company handbook. It's literally a Google Doc. I'm not joking. It's a Google Doc. It's very simple. And the reason why it's a Google Doc is that we want everybody to be empowered to add an edit to it. And our handbook is not huge. It's about 15 pages long. And it's something that we give to a new hire so they feel like they can prepare themselves to work in our team. And here's the reality of business. Your company, your business will change. It will evolve. Some policies might get outdated and you'll need to change them or just remove them altogether. Don't keep something just for the sake of keeping it. If your policies need to change, change them. Because again, you have to enforce these policies. You have to remind people of them. You have to embody them. So it's a lot of work to do something that you don't really need to do anymore. The business values might have changed or the direction you're moving in doesn't really support this policy. And by having a shared handbook, everybody can kind of be a part of that process and question things and add some notes and say, hey, do we still need to do this? Is this something still important to the company? Let's discuss it in the next all hands. I find this to be incredibly healthy. I wish this was my idea, but it's not my idea. I got this from other remote first companies, companies like todoist and getlab that have these open handbooks for the world. Buffer even has their handbook open to the public. Same thing with GitLab.

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To wrap up today's lesson, company policies work, but you gotta be willing to be super selective and enforce these policies. Now, I want to stress that you can't just wait until something happens to enforce it. You have to actually lead by example. You actually have to talk about these policies and these values. And one of the easy ways to do that is to actually highlight when somebody is doing that in your team to praise them. Maybe in a meeting or maybe even in your Slack channels or basecamp or in your project management tool. Let's say, for example, in your policies is we believe in teamwork. Let's say, for example, teamwork makes a dream work. And whenever a group of people on your team collaborate and make something amazing, this is your opportunity to say, I love the fact that so and so collaborated and did an amazing job. Check it out guys. This is a shining example of one of our policies, Teamwork makes a dream work. People love examples. They want to see what you're talking about when you have these policies and you can highlight them in praise. We've talked about tying your policies with your values, but let's tie them all into your evaluations. This is really good practice to evaluate your team members based on some of your values and policies. This is a good way to enforce it as well. Now, the whole evaluation doesn't have to be tied to that because it might be some things you need to cover in terms of evaluating based on the skills they have in their department or their performance in some area or hitting certain milestones. But some of the evaluation should be tied back to these policies or values. So every time they're evaluated, they're reminded of it. Thanks so much for listening to the $100 MBA show. I hope you found today's episode, today's lesson valuable. If you have a few minutes today, think about what are the really, really important things that matter to you in your company. Try to keep them under five rules or policies tie them to the values of your company. Thanks so much again. Before I go, I want to leave you with this. A lot of people think that rules are restrictive or just generally bad. No, rules are actually great. Constraints are actually something that people like. It gives them a sense of comfort. It gives them a sense of structure. It also gives them a sense of purpose and something to really think about. Why are these the rules? Why is this important to the founders and the company? How can I contribute to enforcing or living out these policies? Thanks so much for listening to the 100 on BA show and I'll check you in tomorrow's episode. Q and A Wednesday we got a great question from a listener about inventory and e commerce. Can't wait for that. Check you tomorrow. I'll see you then. Take care. Of.

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