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From Business Rules to Business Values

Stack of old hardcover books
Stack of old hardcover books
Is it time to throw out the rule-book?

Few would argue that over the past ten years the pace of change has increased significantly in business.  Now more than ever, businesses need to be ready to respond to customers at the time and place that is most convenient for the customer.  Customers want to be treated as individuals, want a personalised service, and want to buy products and services to meet their individual needs.  In such a fast moving and dynamic economy, successful organisations recognise that innovation comes from all levels of the organisation – senior management have no monopoly on ideation and innovation!


A recent study by IBM showed that CEOs in Mid Market organisations recognise this shift. The study showed that CEOs also recognise a pressure for openness and transparency within their organisations.  The study concludes that employees need to be empowered to collaborate and innovate, and stresses the importance of shared organisational values.


This pressure for continuing innovation, with a backdrop of openness is extremely significant.  Many organisations are built (either intentionally or unintentionally) around policies, mandates and rules.  Employees follow procedures and processes, and in some organisations, anyone challenging or questioning those policies might be considered as troublemakers.  In some organisations, any kind of variation from the mandated procedure is severely frowned upon (even if it’s in the customer’s and business’ best interest!).


To keep up with the pace, the study suggests that successful companies will focus on shared values.  This is an exciting concept, although the execution will undoubtedly be difficult.  Imagine a world where front line staff were empowered to make day-to-day decisions based on what was right for the customer as well as what was right for the business.  No rule-book is necessary, as decisions are made based on a set of shared values and operating principles.   In this world, staff would need to be more skilled, but their work would be much more rewarding.  They’d have more autonomy, and could focus on finding reasons to meet the customer’s needs (rather than finding reasons to say “no”).  Mid-Market and Large corporations would be able to operate with a level of personalisation and innovation that many small companies enjoy.  Employees from all over the world would be empowered to collaborate, share ideas and try out new approaches.


To support this world, organisations will need robust business analytics and management information reports.  Power becomes decentralised, so it’s essential that management at all levels can see how the organisation is performing, and what their customers are saying and doing.  This allows quick and nimble changes of direction to be made where necessary.


Clearly this vision of openness and innovation will need to be balanced against the need for robust, repeatable and fair activities.  Organisations will still be subject to laws and regulations, and a challenge will be balancing value-based leadership with the need to ensure regulatory obligations are met. It might sound utopian, but I think it’s entirely plausible, although clearly there are many unanswered questions.   Values-based leadership is not a new concept. Perhaps the current business environment will create an environment where it can be accelerated!


What are your views on values-based leadership, and the transition from “business rules” to “business values”?  Do you see this as a gradual process, or a step change?  Or do you think the transition has *already* happened? How will organisations design processes without rules? I’d love to hear from you, please add a comment below.



This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

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