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When we analyse why companies create rules, it is not because we have a problem with the top performers. It’s the bottom 30% of the crew who need rules. Top performers hate rules. What drives their engagement is autonomy, ownership, and trust from the leaders.

Rules cover specifics, focusing on the instance at hand. We can never create enough good rules to cover every situation. And even if we could, that would still not be the solution.

Principles the other hand, cover generalities, allow adaptation to unforeseen circumstances, don’t put you in a box, and enable you to use your best judgment.

Entrepreneurial individuals work better in high-performance environments based on guiding principles. They don’t need thick manuals full of dos and don’ts.

Good leaders teach principles and enable their teams to innovate. They start with trust. Instead of seeing people as problems, they see them as solutions. If you know Price’s law, you will make sure not to add measures focusing on the 30% from the bottom.