How rules affect decision making in the workplace

Transcript

Lachy Gray  

Hey, Karen how's your week been, I've been flat out this week.

Karen K  

Yeah, pretty good. Another week, another lockdown as we say so. Welcome to Series Two. I'm really excited to be back having these conversations with you. But in this series, we're going to do things a little bit differently so we're going to be taking some articles, research and ideas around the future of work, and then in less than 30 minute episodes we're going to explore what that means from a practical standpoint, for us as leaders. So in this episode, I want to talk through a recent news article about the female Norway beach handball team, and how they were fined over a uniform breach which is to say they were wearing shorts instead of bikini bottoms. Now I'm gonna put a link to this article in the show notes in case you missed it, but there has been a lot of coverage, apart from being a crazy story so yeah that gets lots of media coverage. I also thought it'd be a good talking point around mindset. And when you enforce rules because they're there. And when you stop and pause and question if the rule is still valid, because someone pushed the button on that fine without thoroughly considering the current climate, the me to movement, and frankly how this would look plastered all over the front pages of newspapers and virtual newspapers across the globe. So I thought I'd ask you Lachy if you've ever had a situation like these where you blindly followed a rule, and then regretted it later.

Lachy Gray  

Sure, many, many situations. Thanks for sharing this with me, I hadn't seen it until you pointed it out, and I did have a wow moment when I was reading it. It reminds me of a saying of Warren Buffett's that don't do anything that you wouldn't want to see on the front page of a newspaper, and I think perhaps this one is as failed that. Before I get more examples I do just want to point out that I do like rules that surprises me. Yeah, I bet. I think I think they can give visibility and they can reduce time that we spend deliberating on choices and making a decision I think they can help signpost to us where we need to invest time and energy and where we don't. For example, Barack Obama, only wore gray or blue suits and his reasoning was because he had so many other decisions to make, what he was going to wear didn't need to be one of them. I love that. And I think rules can be an antidote to the paradox of choice which is the idea that the more choices we have, the more difficult it can be to make a choice. And then we're less likely to be happy with the choice that we've made, which all contributes to decision fatigue and I think that's something that many of us are feeling right now. In lockdowns homeschooling because the environment is changing so fast. We continually having to make decisions, day in, day out, and it's, it's really tiring. I do acknowledge that not all rules are perfect. I think one challenge is that they can be set at a point in time, based on some criteria. You hope and context that's not always shared, along with the rule. I think some of the COVID restrictions recently fall into this category where some shops were open. Under the essential category. It was hard for me to see how what they were selling was essential. So I think the criteria for determining what was essential, and what wasn't just wasn't clear. And by thinking about rules that we've changed at yarn over time. The first one is our annual leave process. So in past companies I've worked at, I would request annual leave, and my manager, there was just wait, wait for the powers that be to either accept or reject my requests, and I didn't know how long it's gonna wait, what the criteria was, I was just blind to the whole process. And, ironically, even though I had that experience. We started managing leave in the same way at Yarno, because that's what I was used to, except I was now in the position of reviewing lead and making that decision. And I realized that I wasn't the best person to be making the call because I didn't have all the information that I needed, you know, I'd go to the relevant team and ask them, what would the impact be in this era takes this leave at this time. And if that's the case, then why does it need to go to the MD in the first instance. So, that's what we implemented and it's how we, we still do it today, where the team manage their own leave request, and they state their intention to take leave. And they ask if anyone has any issues with it. Rather than asking for permission.

Karen K  

Yeah, that's a really good example because that's, it's quite usual in businesses so we put in a leave request and it goes to our manager to approve on iPad, you know, every HR is system is built on that hierarchy that your leave requests go up a level and then you know it's not approved it goes up another level. So I love that you've changed that role, but I'd like to ask you. Are there circumstances where you'd have to change it again and you know I'm just thinking about if your organization became a lot bigger or something happened within a team, and I'm asking my team members for my intention to take leave and someone doesn't like me very much and they just keep saying no.

Lachy Gray  

Yeah, I think, for me that's probably a signal of a deeper issue, and an opportunity to dig in and find out what that deeper issue is. Is it personal animosity? Is there more going on in that team, and having it have a chat about it, I think, as well there's the element of reciprocity, so if one person continually rejects everyone else's leave. It's highly likely that everyone else would do the same for them if they ever want to go away so perhaps that's one thing it might discourage it. But I take your point and I think it does rely on, on, on context, isn't it, and we're assuming here that, that the culture is, is healthy, that is open communication. And that if people have a concern that they're comfortable in, in sharing it, it really does rely on that.

Karen K  

Yeah, absolutely. I think it's a great signpost for your culture because as a new person coming in to learn about that. It does say your trust and communication and teamwork is really important here.

Lachy Gray  

Yeah, for sure. I think another example where I probably dropped the ball was when we decided to implement a time tracking tool. So, this was back in early 2019 I implemented a tool called Harvest, which is a time tracker, really, to give us insight into where we actually spend our time versus where we think we're spending it, and to use those insights to help inform decisions. I was also thinking about about our pricing and our profitability, and I felt like I needed at that time data to feed into that. But we're also an output focus business rather than timespan. So, which I guess is contradictory so from the beginning. Beyond It was raise concerns about the intentions behind time tracking as a well, we're using that at odds with our output focus culture, and eight months later, I revisited that original decision we returned harvest off. And, and that all started because of the feedback of one Yarnoer who, who shared that it was causing stress and frustration for him and for other team members, which, which I was actually blind to. And that was also seen for me to say oh wow, how did I not know about this I really missed this one. And the feedback was that the team felt challenged by logging time that there was a lack of consistency and how we were logging it, which made it difficult to report on, and running useful reports was kind of one of the reasons we put it in the first place. So, I think the big learning for us there was that. And the messaging, but also that if we're going to do it, to do it on very specific use case so for example we started tracking time again. Recently, but just for creating customer content, because we're working to estimated hours in each customer contract, so it's really helpful for us to have an idea of actual hours to map back to that.

Karen K  

Yeah, I think that goes back to what you're saying before about you know rules are at a point in time, and the context is really important so you may have had in your mind, This is why we're gonna be using this tool to track time but your team members may not have understood all that context and I can see as an outsider looking in. It doesn't seem to me that that fits your culture I. But yet, so it might have actually been really concerning to them. Are you trying to change the culture of Yarno.

Lachy Gray  

Absolutely. Yeah, so I think I really took away a lot away from that experience. And I think the messaging in the context is one, and also just writing it down so writing down the original decision, and then writing down the decision to start using harvest and I actually went back and read that and this was two years ago now. And it's really helpful from a learning perspective to see what I thought at the time, and then how I change my mind, and how that will inform how I think about things in the future.

Karen K  

Yeah, absolutely. When I was looking at this article as well and I started to consider it well how, how do we see this happening at the moment, in business, and there were two things that I thought of in terms of common rules across different businesses, and one is that everyone gets a pay increase once per year, so it's quite usual that businesses will look at the end of the financial year and then make a determination account can we give people an increase, but at the moment, we're in a situation where our borders have been closed for quite some time. So, net migration is down over 4%, over the last two years. And then we also have low unemployment. So despite the pandemic and what everyone thought would happen. The unemployment rate is still less than 5%. And then we add in the lockdowns happening at the moment, so people if they've got a job that they feel is relatively secure and they can work from home, and they can homeschool while they're doing it then they're just not actively looking for work. So what's happening is we're getting really competitive employment markets, particularly in it. As people are being offered a lot of money to do the same job down the street, basically. So, as a rule well everyone gets paid a pay increase once per year but actually I've got staff right now that are being offered, you know, $20,000 more to go and work in the same job over there. So then what do I do with that rule. You know, another one at the moment is around team communication so a lot of businesses will have you know quarterly staff meetings, but now we're into these prolonged lock downs, should that be revisited is a quarterly meeting actually enough when no one's seeing each other anymore.

What are your thoughts?

Lachy Gray  

Yeah, Good examples. I think the salaries certainly resonates I'm wearing this exact position right now, it, it's really interesting how hot that that market has become. And I remember reading about how Netflix approach it in the Reed Hastings book about the culture at Netflix, and I actually encourage the team to speak with recruiters to understand what's the market paying for their skill set, and for the team members to use that information in conversations about the salary at Netflix, when I first read it, I thought, wow, that isn't that self defeating I mean, what happens if the recruiter says I will. You could be earning significantly more than you are now. Isn't there a risk that they'll just say, Great, see you later. And I guess that that risk is always there, isn't it, but what it also says is that Netflix are confident in their culture, and they're confident in, in giving in encouraging the staff to do that, having a conversation about the value at Netflix and actually talking about it, and what else is important to them, so not just salary. What else do they value about working at Netflix so what does that look like into the future. And we've tried to take a leaf out of Netflix's book on that. In it, trying to be more, have more open conversations about salary. What does it look like out in the market at the moment. What are the next 12 months look like? We're still a small business, we might not be able to pay those really high, high salaries, but here are some other things that we can offer. Let's talk about professional development. Let's talk about the culture and really I guess having a two way conversation about it, rather than I think what is typical with salaries, is, it's just this kind of black box, and you're just told the salary that you will receive and that's it, there is, there's no discussion.

Karen K  

Yeah that's true and I actually think Netflix is really clever. In doing that, because what I have seen over the years is that people will look at job ads, and they then pass those job ads to their manager and say this is why I'm not being paid enough, but it's just not a reliable source of information because job ads for one you know if they're through her recruiter, they're giving ranges which may not be actually what the company intends to pay at all, because they're trying to get a broad range of candidates for other jobs as well not just for that particular job. But the other thing is that you might think that you have the skills and experience for that job but the employer may not so where you think oh I fit that job I earned that amount of money that may not actually be the case if you were to go through the recruitment process so I think the idea of actually encouraging people to go and meet with a recruiter and so what are the live real jobs right now and how would I fit within that you're getting your employees to do your work for you really like Netflix doesn't have to do that market testing the employees are doing it. And of course to do that they have to be super confident in their culture and then they have things that will keep you know the employees working for them, it probably doesn't hurt that they are Netflix so you know they're well known as a great place to work and you know it looks good on your resume, but you know it's a very interesting and unique type of a situation isn't it.

Lachy Gray  

Yeah and yeah that's right we should say we should point out that they are heavily funded and probably can afford to pay higher salaries, but also they have to because they're competing against the Googles and the Facebook's and so on. So, very, very competitive market in the US. And just touching on the your point about the quarterly staff meetings. Yeah, I think, like for us. We, we do quarterly off sites, what we did. We've done one this year. And when, when I found out that we wouldn't be able to do them in person I thought okay, we'll just do them, remote, so a day and a half, remote which people probably groaning about that are too long it's too long on Zoom teams. And, and so I've tried to use it as an opportunity to actually think about what are we trying to achieve and then redesign it for the remote environment. And so, that most recently, we just trimmed it right back to a three hour session with one of our teams to focus on a really specific topic. So I think that's an example of. Yeah, time we've had to change our rules around our quarterly cuts ups, just in light of things changing in our environment that, that we can't control, but also just not assuming that, we'll because we can't do it in person, we'll just do it virtually, and the experience will be the same, because I don't think it is at all.

Karen K  

Yeah, absolutely. So, what do you think like how do you go about considering the rules in your business like how do you how do you actually start thinking about how do I change these, how do I even identify those rules.

Lachy Gray  

Yeah, it's a good question. It's I've been reflecting on it. I think it's about asking, Will new and or additional information, change the rule. And if it will. Well what's the process for reviewing it so I think it could be helpful to, to build in a review cadence so for rules that are likely to change based on information changing. They'll be reviewed more regularly, so that might be coming into the office, working remotely being hybrid. They're all impacted by lockdowns, and government regulations which are changing very fast. So they'll be reviewed more regularly then sign employment contracts, which may be reviewed annually. And so I think that that can really help and I'm not suggesting that we review all the rules all the time. But I think, be communicating what rules we review when to the wider team can really help. and then probably second to that is, you know, asking, Are people encouraged and ideally rewarded for questioning rules when they don't make sense, or are they actually punished for doing that. So that's, I guess, comes back to the culture. If, if, if it's an unhealthy culture and people are discouraged from asking, Well, hold on, that doesn't really make sense to me, or they're called out for doing it in public in front of the team, then that's going to encourage everybody to hide. To hide questions to hide problems which I think is a very dangerous culture to be to be creating. So I think there's the consideration of all, what is questioning a rule mean for for a team member, and do they feel comfortable and safe to do it.

Karen K  

Yeah, that's a great point and I to one of your examples that you used around the time tracking software, you know, if someone didn't feel comfortable in bringing that to your attention, or if they did and then you just dismiss them. You probably have a very different culture today, because it would filter and attract different people so without even realizing. You would have people that would be like you know what, I don't want to be timetrax I'm all about outputs so and so I'm going. So you know that could have a really, really huge difference if you stay blind to that situation with your teams.

Lachy Gray  

Absolutely. And I think I'd assumed that if they were unhappy that they would raise it but I don't think I can always assume that, so I think the onus is actually on me to build in ways to hear feedback, Like, such as in one on ones asking that concerns, and really being specific about request for feedback, rather than just assuming because I haven't heard any, anything that everything is fine.

Karen K  

Yeah, great points. So, in terms of the takeaways and the recap and you know the points that I've written down. You know, one is to just make a note of the decisions that you're not making for a week, because there's a rule to follow. And that might sound a bit strange but I think that's how you'll discover, you know, through the day. Okay, I didn't have to make a decision about that, I just did a or told someone to do B. So there's a rule there, if you're doing that so you know, is the rule still valid. And to think about external forces and how they're impacting your business so the two big ones at the moment, from my perspective, is the employment market, and also, you know, lock downs which are impacting on lots of different businesses and industries right now so it is a different playing field. So, are there some rules that we have in our business that we need to change, to those external forces that we've got right now. And then you know some of the things that you mentioned, what's the sheduled to review rules and does it need to be updated. What's the criteria for making a rule and is it still relevant. Did you have any others you wanted to add on to the actions for our listeners.

Lachy Gray  

I think just considering context so we're creating a new rule, what's the context to it what assumptions are we making and documenting it. And then when we're reviewing the rule. Does that context and criteria, still make sense, is it still relevant, or does it need to be updated as well.

Karen K  

So, links to the original article that we talked about today and everything else that we've discussed, including those takeaways will be over on our website so you can go to yellow.com.au or amplify, hr.com.au, and just follow the links. And if you've received value from this episode, we'd love it if you could leave a rating or review over at Apple podcasts, and next episode Lachy.

Lachy Gray  

Thanks Karen so coming up in the next episode we discuss mental well being and how we talk about it at work, and we ask how do we enable those conversations, while also having appropriate boundaries in place and I'm looking forward to it.

Karen K  

Yeah, me too. I think this is a really important topic, especially at the moment with these lockdowns, and how do we actually do that with mental well being with our employees. So, that's coming up in two weeks from now so you can click on the subscribe button and you'll get notified of when that's available. Any final thoughts Lachy?

Lachy Gray  

Oh, thanks for your time, Karen, I really enjoyed today's chat with you.

Karen K  

Thanks, you too and thanks everyone for joining us and we'll see you next time on the Make it Work podcast.