Understanding the Dynamics
Before delving into the nuances of this complex relationship, it's important to understand the roles of both policy and common sense. Policies, for the context of this article, are essentially guidelines or rules established by an organisation to streamline decisions and achieve predictable outcomes. They are designed to promote consistency, fairness, and efficiency. On the other hand, common sense refers to sound and prudent judgment based on simple perceptions of a particular context, situation, or presented facts. It's the innate human ability to make sensible decisions without needing explicit instruction. Providing the flexibility required to handle a broad range of different situations.
However, problems arise when policies are implemented without room for interpretation or flexibility, essentially sidelining, or causing the death of, common sense. This is not to argue that policies are inherently detrimental. They serve a vital role in providing structure and standardisation, particularly in large organisations where numerous decisions are made daily. However, an over-reliance on policy can lead to a mechanical approach, where the human element of decision-making is overlooked, and common sense is left by the wayside.
Retail Sector: A Case in Point
A clear illustration of this tension between policy and common sense can be found in the retail sector. Retail employees, often paid minimum wage, are typically instructed to strictly adhere to company policies. This approach ensures consistency in service, minimises potential liability, and simplifies the training process. However, it can also lead to situations where common sense might have yielded a better outcome.
Imagine a retail worker dealing with a disgruntled customer who wants to return an item one day beyond the store's 30-day return policy. The employee, following the store's strict return policy, refuses the request. The customer leaves frustrated, vowing never to use the store again and potentially sharing their views across social media and rating platforms. This rigid adherence to policy has resulted in a lost sale, potentially caused brand damage, and lost a customer. In this case, applying common sense – accepting the late return as a gesture of goodwill – may have yielded a more positive outcome for the business.
Business Technology and Innovation Strategy
The tension between policy and common sense becomes even more pronounced in business technology and innovation strategy. Policies, particularly in the form of regulations, can limit the agility of tech companies, stifling innovation and slowing down growth. For instance, strict data policies can impede the development of new AI technologies, which rely on access to large amounts of data to improve and innovate.
However, the absence of policy can lead to its own problems, such as data breaches or unethical practices. Here, common sense dictates that there must be some form of regulation to protect consumers and maintain ethical standards. The challenge lies in striking a balance – creating policies that protect and guide without stifling innovation and growth.
Striking a Balance
So, how can we strike this balance? The answer lies in non-prescriptive guidelines that focus on a desired outcome. Many government regulators figured this out some time ago. These policies provide a clear decision-making framework and allow room for individual judgement. Such policies encourage employees to use their common sense, particularly when rigid policy adherence may not yield the best outcome or may struggle to adapt to changing technologies.
A culture of open communication can also contribute to this balance. Encouraging employees to voice their concerns or suggestions regarding existing policies can lead to more nuanced and effective guidelines. After all, those on the frontline of businesses are often the ones in direct contact with customers and the first to notice changing patterns or behaviours that could impact the business. For example, in the retail sector, a store employee would be the first to notice a change in customer preferences or the popularity of a certain product. Strict adherence to policy might prevent that employee from responding effectively to these changes, leading to missed opportunities or unsatisfied customers.
In this respect, it's worth noting the success of companies like Nordstrom, which has long prided itself on empowering its employees to make decisions based on common sense and customer needs rather than strict adherence to policy. The company's employee handbook famously used to be a single 5x8" card that read, "Use good judgement in all situations." This approach has led to numerous tales of exceptional customer service that have helped build Nordstrom's reputation over the years.
In contrast, businesses that focus solely on strict policy adherence might find themselves unable to adapt quickly to changes in the market or customer behaviour. This was seen during the early days of digital music, where companies like HMV and Tower Records stuck rigidly to their physical sales models, while newcomers like Apple and Spotify took a more flexible approach and dominated the market.
Innovation
In the realm of innovation and strategy, the same concept applies. Companies that rigidly adhere to established strategies and policies might be left behind by more agile competitors willing to take calculated risks and innovate. For example, Kodak, once a giant in the photography industry, famously failed to adapt to the rise of digital photography, sticking to its film-based business model despite having developed the first digital camera. On the other hand, companies like Amazon and Google have built their success on a willingness to experiment and break from established norms, guided by a larger strategic vision rather than strict policies.
In conclusion, balancing policy and common sense can be achieved with flexibility and adaptability in business. While policies are necessary for providing structure and consistency, they should not be so rigid as to stifle common sense and ingenuity. Policy should be a guide, not a straightjacket. When it becomes the latter, it stifles innovation, hampers customer service, and ultimately leads to a company's decline. In contrast, by striking the right balance, businesses can foster a culture of innovation, adaptability, and strong customer service, leading to long-term success in an ever-changing market.