The Role of Rules

Last fall at a Business Ethics Speaker Series event, I listened to Daniel Weinstock from McGill University deliver a talk on rules and ethics in sport. It was a fascinating collision of philosophy’s deep thought and a man’s passion for the game of hockey. What emerged to me was the relevance of rules in business and collaboration.

Two of the concepts that Prof. Weinstock examined were, to paraphrase, “rules that no one argues with” and loopholes. As champions of following procedures and sticking to contracts, supply chain professionals should be familiar with both. They may also share the frustration of not being able to enforce rules with the internal rule-breakers and the unintended consequences of new rules.

The Rule is the Rule

In sport, the “rules no one argues with” pertain to safety and to fair play. Although some purists in hockey will fondly recall the flowing locks of Ron Duguay or Guy Lafleur, few could make the case to repeal the helmet rule. Similarly, to stick with hockey, no one argues with the “too many players on the ice” penalty. Both safety and fairness appear to provide a solid base for the presence of a restriction on actions in the form of a rule. No rule, however, is completely bullet proof:

• Safety: Could “no helmets” actually help the concussion situation because people would not hit as hard?
• Fairness: Hockey fans will appreciate the discussion of “fair play” around “The Avery Rule.”

If safety and fairness work most of the time for sports, what constitutes these solid planks in business?

  • Cost savings?
  • Profitability?
  • Customer satisfaction?
  • Sustainability?
  • Doing the right thing?

There is promise here for a 2×2 matrix that plots “ability to quantify” vs. “importance to long-term business success.” Even with such a tool, there are no clear winners. An organization can try to be clear about its stance on what is important. Johnson & Johnson’s credo is one attempt at this clarity.

The wording will never be perfect, but such proclamations can reflect the organizational direction and the industry context. For example, a logistics outsourcing operation could logically place “cost savings” or some form efficiency within the rules that no one expected to argue with. The goal, I think, should be to be somewhat clearer than statements like “we value integrity and honesty” but not as prescriptive as “never ever spend more than you absolutely have to.”

The Rule isn’t Really the Rule

Loopholes are fuzzy in a different way. The shared understanding of these was that such rules enable someone to operate “within the rules” while clearly operating outside the spirit of the game. In an organizational setting, these are called “workarounds.” Your view of the effectiveness of the rule is the thing that separates a “workaround” from “loophole.” In either case, everyone knows they are happening… and some may be very aligned with the long-term success of the business.

The presence of a workaround may provide an area of opportunity to be clearer. Acknowledging the work-around can identify a rule that could change. In some instances, the threat of “re-opening the constitution” may be too great or too troublesome. It may simply provide an opportunity to revisit the “spirit” of our activity. This should be a health discussion that could help mutual understanding.

A Rule for Rules?

Understanding the role of rules is important. We don’t want to prescribe unless something very important (e.g. personal safety) is at risk. For many cases, guidelines can provide people with the freedom to act and use judgment in performing their function. And, no, there is no clear rule for rules.