05/09/2012 04:20 pm ET Updated Jul 09, 2012

Policies: Less Is More

Just as individuals accumulate files, companies accumulate policies. In earlier times, if you entered the office of an executive, one bookshelf (it might be the only bookshelf!) in his office would contain eight or 10 big binders filled with company policies. So, in principle, if he wanted to know the policy on bribery he had only to look on page 222 of Volume 7 or some such place. Today the same sort of voluminous policies exist in a less visible place, namely on a set of intranet web pages. This has the added benefit of allowing offices to be smaller.

But what if we took a more radical approach? Suppose all the business policies of a company (as distinct from detailed HR policies) were contained in a 24-page booklet, with large type. Could it be done? Of course, it is just a matter of considering what is important, then setting down what you believe in a few clear sentences that everyone can understand and remember.

It is always a good idea to move in this direction; it is essential after a merger or a series of mergers. Everyone will come with a different idea of what is acceptable, what is important, and what, if you do it, gets you fired. A vigorous debate allows the executive to agree corporate values.

Policies embody the essence of what a company stands for. Here is an example: To be competitively successful and a force for good. Sounds hard to argue with? Well, it actually takes quite a lot of thinking and debate to come to such a statement, and it certainly takes a lot to live up to it. BP and several other companies have shown just how hard it is in the last few years!

Five policies in a booklet of 20-30 pages will suffice -- ethical conduct; employees; relationships; health, safety and environmental performance; and control and finance. For each policy there is a corporate commitment and a set of policy expectations. Everyone in the company, throughout the world, is expected to live by these. No exceptions.

I will discuss some of these in more detail in other essays, but here just emphasize the great power that comes from a 'less is more' approach to policies. People will pick up and read a small booklet, cover to cover. They will remember statements like 'we will never offer, solicit, or accept a bribe in any form' or 'our goal is simply stated -- no accidents, no harm to people and no damage to the environment.' And as managers they will be able to communicate these clear, concise policies to their staff.

The policy commitments and expectations are absolutes, but life does not occur with such absolute clarity. So they also become a basis for debate and discussion. When there is an expectation that says 'Everyone who works for us can expect to be fairly treated,' what does this imply for a team recreational or social activity that may exclude some members? How does the policy on bribery fit with our practices on extending and receiving corporate entertainment? Debating questions such as these is also healthy and characterizes a vibrant, open, and transparent corporation.

As with many things, we start with an ideal of 20 pages of policies in total, and then find that for some of them we need to say more. So be it. But if instead you start with 20 volumes of policies and add to them as necessary you will inevitably have something with much lower impact.

About Leadership:
About Leadership is a series of 52 columns on corporate leadership -- essential skills, leading teams, managing your career, the strategic and business practices to make a company and its leader distinctive from competitors. These columns will be of interest to people leading small and medium sized companies today, many of whom have not had much formal training in management skills and techniques; for the many people in big companies who aspire to senior management; and for anyone who thinks: Give me a hint, how can I do this better?