Summary

The website content discusses the concept of "Simple Rules" as an effective management principle for reducing complexity and improving decision-making processes in businesses, particularly in IT and agile work environments.

Abstract

The article titled "Simple Rules as a Management Principle" emphasizes the importance of straightforward guidelines in leadership and decision-making. It argues that while managers often create complex rules to minimize uncertainty, these frequently have the opposite effect, complicating the decision-making process. The author, Marcel F. Volland, advocates for simple, consciously chosen rules that facilitate quick and effective decisions, especially in dynamic and uncertain situations. The article, drawing from the experiences of a woman in tech, illustrates how overly complex processes can be replaced with simple rules to support employees and enhance agility in management. It also distinguishes between "fast thinking" heuristics suitable for uncertain situations and "slow thinking" required for complex problems, suggesting that simple rules are more effective in the former. The article concludes by promoting five simple rules as a foundation for agile management models and criticizes the tendency of large corporations to overcomplicate their rule sets.

Opinions

The author believes that complex rule sets in companies often hinder decision

BUSINESS & IT

Simple Rules as a Management Principle

How to reduce complexity and gain the ability to act

Introduction: What are simple rules, and what is their purpose?

One of the most important tasks of leadership is to make decisions.

There are plenty of management concepts designed to make this easier.

However, managers often introduce complex rules for this purpose. The goal is to reduce the uncertainty in the employees’ decision-making process.

In reality, the complexity of these rules tends to make decision-making more difficult.

In his book “Simple Rules as a Management Principle,” author and management consultant Marcel F. Volland describes various decision-making procedures.

These so-called “simple rules” are intended to help people make decisions, especially in situations of uncertainty. And they do so without too much regulation.

Motivation

I work as a woman in tech in an agile work environment as a consultant for an automotive manufacturer. I need to decide often and quickly.

However, there are many regulations on how this has to be done. These are often complex processes.

It takes several people in different departments to approve or reject a decision. There are lengthy and difficult processes to follow.

I came across this book by accident, and it was an eye-opener.

Being a manager in my company, I define processes for my employees.

I want to avoid them being too complex. The processes should support my employees in their decision-making, and not hinder it.

The book has given me valuable tips for this. I would like to pass these on to you.

Simplification instead of complex rule sets

Managers can and must make many decisions. Many companies respond to this with complex sets of rules instead of a simplification.

Basically, there are two types of decision-making:

The decision “by thinking” is based on as much information as possible. It is evaluated and then transferred to a planning process. This process determines how a new car, for example, is developed and built.
Simple Rules are part of the “by doing” decision. They are simple and perfect for situations in which the facts change quickly, and detailed planning would therefore be nonsense.

Simple rules are shortcuts in thinking.

The simple rules are based on a situation of shortage: There is only limited information, not enough time, and too little capacity to calculate or play through all possible possibilities.

Therefore, we rely on a shortcut.

Example: If you want to catch a ball, you don’t calculate the flight path and the air resistance in detail. Instead, you use the angle of view to the ball and draw on experience. With a little practice, you can catch the ball with minimal cognitive effort.

Heuristics like these are called fast-and-frugal heuristics: they are fast and, likewise, frugal, i.e., they require little information.

Heuristics are methods to find out things, not to optimize them.

Good solutions in uncertain situations

Simple Rules are ways to quick solutions. But do they also lead to a good solution to a problem?

Not for complex problems.

Because they belong to “fast thinking”[1], for complex problems, “slow thinking” is more useful. One should analyze the situations in more detail. This is usually only possible in safe situations.

In uncertain situations, in which there are many options, but few experiences, simple rules lead to better results than lengthy analyses.

Simple rules in management are not unconscious heuristics. They are consciously chosen, binding rules. In many companies, they are overdue.

Especially large corporations tend to get stuck in infinitely detailed rules and procedures. In doing so, they hinder themselves.

Five Simple Rules cover the most important decisions in a management context. They also form the basis for agile models.

Here I introduce you to those simple rules!

Summary

Many companies respond to uncertainty with complex sets of rules, rather than simplification
Simple Rules or heuristics are shortcuts in thinking
Simple Rules provide good solutions, especially in uncertain situations
Complex rules and inflexible project management can hinder companies
Five Simple Rules cover the most important decisions in a management context
Simple Rules form the basis for agile models.

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[1] source: research by psychologists Daniel Kahneman and Amos Tversky as described in the book “Simple Rules.”