A practical guide to setting company policies
I came across an article on the Stay SaaSy blog about the important, and often delicate, task of setting company policies.
You can read the full piece here: Setting Startup Policies.
What I particularly appreciate is its clear perspective, which applies not just to startups but to any company. It covers the entire lifecycle of a policy, from its birth to its eventual dead. The author frames policy-setting as a core executive function and provides a set of practical rules to follow.
The article makes several valuable points, which I have summarised below:
- Treat policies like products. A policy needs to be well-designed to avoid unintended consequences. This involves using existing solutions as a starting point, getting wide feedback before release, and rolling them out progressively.
The best way to ensure that your policies make sense from top to bottom is to treat them like products.
- Ensure full transparency. Secret exceptions or loopholes erode trust quickly. The author suggests an “all hands test”: if you would be nervous explaining the entire policy, including its exceptions, to the whole company, it needs to be rethought.
- Do not punish good behaviour. Policies should never create a situation where following the rules puts someone at a disadvantage. For example, a “use-it-or-lose-it” budget can punish teams that are fiscally responsible.
- Allow for evolution. The people most affected by a policy must have a way to influence its change. A policy should not become a fixed rule that harms one group to benefit another.
- Use them sparingly. Creating policies can be a form of false productivity. It adds friction and can slow people down. Healthy organisations focus on pruning and automating rules that are no longer needed.
Many teams confuse creating policies with adding value – one of the most toxic mistakes that an organization can allow.
Helpful post for setting guardrails effectively.
