Fuller or leaner rules?

In the modern corporate world, fundamental questions arise time and again: How many rules are needed to manage a company efficiently without suffocating it? And how flexible should these rules be in order to ensure both stability and agility? These questions are not new, but in times of increasing uncertainty and rapid change, they are becoming increasingly important. An impressive example of this was provided by a project at a global DAX 40 client where a reorganisation became necessary. The company was characterised by an overly complex matrix structure that paralysed the decision-making process. A central point of the discussion was how collaboration could be improved by introducing new "rules" - in the form of guidelines, maxims and principles.

This problem is reminiscent of the central theses of Lorraine Daston in her book "Rules: A Brief History of Rules". Daston distinguishes between three central types of rules: Algorithms, Laws and Models. These categories provide a useful framework for understanding the types of rules that are needed in organisations.

1. Algorithms are clear, precise rules for calculation and measurement that are particularly important in standardised processes. They are important in organisations when it comes to ensuring efficiency and predictability.
2. Laws are universal, necessary truths that are considered fundamental principles in the world of organisations - such as ethical standards or binding legal regulations.
3. Models, on the other hand, are flexible, often less concrete and serve as role models or paradigms. They are particularly important in the management of organisations, as they provide a clear framework for decisions and actions, but at the same time leave room for interpretation and adaptation.

However, Daston goes one step further and distinguishes rules not only by their form, but also by their application and flexibility. In her analysis, she states that rules in organisations can be formulated either "lean" or "full". Lean rules are precise, open to little interpretation and have a fixed interpretation. They are suitable for situations in which clarity and quick decisions are required, such as safety regulations or in production. Full rules, on the other hand, are often detailed and contain many exceptions that leave room for interpretation and judgement. This type of rule is more flexible, but also more difficult to apply as it requires a high degree of trust and wisdom in its interpretation.

It is the task of managers to find a balance - between the need for fixed, efficient rules and the freedom to react flexibly to unforeseeable changes. The challenge lies in determining which type of rules are best suited to which problem and how these rules can be applied consistently but also flexibly.

Why is this important for organisational development?

The ability to develop and apply both clear and flexible rules is becoming increasingly crucial. Organisations that set too many rigid rules block innovation and prevent rapid adaptation to new market conditions. On the other hand, too loose a set of rules can lead to a lack of clarity and reduce efficiency. Companies must therefore constantly find a balance between strict guidelines and the flexibility to adapt to new circumstances.

Another interesting aspect is the increasing importance of trust in management. Particularly in complex, unpredictable environments - which are becoming increasingly common in modern companies - it is often the managers who have to decide how a rule is applied in individual cases. Trust in their judgement becomes a decisive success factor for corporate management. This is the moment when the "full" rules find their place - they require not only knowledge, but also wisdom and trust in the decision-makers.