Change Agent - Issue 37

"You want policies? You can't handle these policies!"

It started as a typical vacation. My wife, an overworked corporate lawyer, and I, a neurotic and overworked entrepreneur, had both managed to protect a week in our schedules (the same week!) and were ready to head to Cape Cod for some much-needed rest and relaxation.

And, for the first time, Lucy the Wonder Dog would be with us.

Having drawn the short straw, I was responsible for finding lodging for this intrepid threesome. (This was several years ago, mind you, before the advent of the World Wide Web, back when people needed phones and stamps to communicate.) After a grueling 45-minute search that was aided by the Wellfleet Chamber of Commerce, I found the perfect spot. Right price. Perfect location. Recently renovated. Dogs welcome.

I should have sensed trouble when the contract arrived. It was accompanied not by a photo but by a beautiful woodcut of the cottage. How charming, I thought. I shared the brochure with my wife, Helene, and with Lucy, and we all agreed that this vacation would be free of the usual disasters. (Have I told you about the time my rented BMW nearly fell off the icy deck of a Martha's Vineyard ferry and into the frigid waters below? No? Another time, then.)

So we loaded up the Saab (I told you this was an old story) with all manner of goods and provisions. My wife brought along her trusty beach chair; I managed to lug a Windsurfer, Frisbees, dog-training devices, and, if I remember correctly, a fax machine.

After an 18-hour drive (okay, it just felt that way, but it took all day, and the traffic was bumper-to-bumper), we arrived at the cottage. Except it wasn't a cottage. It was a dump.

"Dump" would actually have been a generous word. It was a dingy, dirty hovel that barely resembled the luxurious cottage that was so handsomely illustrated in the brochure. Ever the innovator, I immediately suggested that we buy some flowers — maybe even some posters. "It'll be fine!" I said to my wife with false enthusiasm and with the feeling that I was in huge trouble.

I was right. I was in huge trouble. My wife was disappointed. Okay, she was fit to be tied. But she had a great idea: "Hey, it's Saturday afternoon. It's the middle of August, the busiest time of the year for Cape Cod. Let's go to a local realtor and see if there are any vacancies!" To her credit, she didn't burst into laughter.

Feeling mighty guilty about being suckered by the owner of the cottage, I immediately agreed. So we took Lucy, the Saab, the beach chair, the Windsurfer, the Frisbees, and the fax machine with us to downtown Provincetown, where we miraculously found a parking space and a realtor who took pity on us.

Five minutes later, we were standing on the beach in Provincetown, admiring a dune shack. No pretense here. It really was a shack. One bedroom. One sitting room. A little kitchen. But it was on the beach. It had light. It was charming. And, amazingly enough, the realtor said that the owner would be happy to take Lucy.

Excited by the prospect of saving the vacation (though a little sad about losing our deposit), we drove back to the first place, said good-bye, and drove to the shack to begin our week on the beach. The realtor was waiting for us. It was after 6 PM on a Saturday, so we viewed this as a not very positive sign. Our hunch was correct.

Crestfallen, the realtor told us that we couldn't have the dune shack after all. "Why?" I asked.

"Because the owner has a policy: No dogs."

It turned out that the guy who owned the dune shack had just this one property. He wasn't Donald Trump in the making. He was just a guy, a guy with the keys to "our" shack. And he had a policy.

"No exceptions!" the agent said. When I pressed him and offered to leave an outrageous deposit, or to pay for a cleaning service after we left, all he could do was shake his head and say, "I'm sorry. He has a policy."

A policy. He wasn't an insurance salesman, and he didn't work for the Department of State. Nonetheless, he had a policy, an all-purpose rule that eliminated all doubt and prevented unpleasant surprises from cropping up — surprises like, say, a willing customer eager to put money in his pocket.

All of which leads me to a question: Do you have policies at work? Does your company have a knack for turning onetime decisions into long-term edicts?

Los Angeles International Airport has a policy that you're not allowed to bring a beverage through security without tasting it in front of a guard. Apparently, some knucklehead decided that the best way for a terrorist to get an evil liquid on board a plane is to put it in a paper cup and carry it through security. Apparently, no terrorist would ever be smart enough to put it in, say, her purse?

My wife and I share a credit card, and the bank that issues it has a policy: It will release certain information only to the "primary cardholder." Since we're busy accruing miles on her frequent-flier account, my wife is the primary cardholder.

Which means that in order to deal with this credit-card account, I have to put on a falsetto voice every time I call the bank. Of course, the person on the other end of the line knows that I'm not really a woman and that he's forcing a good customer to lie in order to get around a dumb policy.

Do people at the bank really think that a clever identity thief is going to be hindered by having to put on a dress and talk like an idiot? Or is there some bureaucrat who doesn't care about the long-term effects of policies that might have seemed smart at one time but that are, in reality, stupid? So what's wrong with policies? Aren't they a great way to communicate core values and fundamental rules to a large, far-flung staff?

Well, yes. Sometimes a policy can send just the right message both to your staff and to your customers. McDonald's has a "people policy" that stresses customer satisfaction. If you buy a Big Mac and a milk shake, eat half of the Big Mac and drink half of the milk shake, put the remains of the Big Mac into the milk shake, and then go up to the counter and say, "I can't drink this milk shake; there's a Big Mac in it," you're likely to get discount coupons for your next visit — or even a full refund.

Why is this a good policy for McDonald's? Because it takes the company's reputation for quality and service out of the hands of the kids behind the counter. If frontline employees are always bending over backward to make people happy, that's a great development for McDonald's in the long run.

But when a big company gets in the habit of creating wide-ranging policies and taking away personal responsibility, it cripples its own ability to react to the world. And when that company starts adding more and more policies to the list (and not taking them off when the opportunity arises), it begins to calcify.

One reason why so many big companies have been unable to pursue new-media goals aggressively is that they have been hindered by old policies. When faced with an opportunity that has a huge potential upside and a relatively small risk — but which violates a policy — all too many people will stick with the policy. Sometimes, there's an opportunity to make an exception that will benefit everyone: You break the no-dogs rule, you make a customer happy, and you increase your dune-shack rental income for the year by 20%. But even when it makes sense to make an exception, most people with policies are conditioned to fear ever breaking them.

Maybe it's time to take a hard look at your company's policies — both the official ones and the ones that aren't written down. Chances are, people in your company are running around, afraid to make change, backing up their actions with policies that your company never really meant to become permanent.

The worst thing about policies is that they're really easy to institute but almost impossible to remove. Take a look at the problem of sales tax on the Internet — a problem that Congress is now facing. On one hand, given the new digital environment, you'd be crazy to institute a policy in which each state gained revenue by charging sales tax on physical goods sold by hand within its borders. On the other hand, with 50 different state policies already out there and entrenched, the chances that Congress will see how ridiculous the sales tax is and repeal it are close to zero. (Okay, they are zero.)

Maybe it's time your company instituted some new policies — policies for which there are no exceptions, policies that even your lowliest employee can happily enforce. You want policies? You can't handle these policies!

No criticizing a new business idea unless you have a better idea, buddy. This policy ensures that in any meeting, no person is allowed to criticize or attack your idea until she comes up with something even more radical — or more likely to succeed.

Don't always look for failures from new stuff while ignoring failures from old stuff.This one is really simple — but also really powerful. When your company's core business starts to falter, everybody ignores the warning signs. But when a new initiative hits a speed bump, well, that's a different story. Nobody, for example, expects a refund from the U.S. Postal Service when a direct-mail campaign fails to make money, but let one of your online campaigns fail, and people start shrieking that new media is one big fraud.

Fire the whiners and bullies. At one company that I work with, an incredibly difficult bully finally got the ax. Yes, he was central to the company's success. Yes, he seemed irreplaceable. But then he went too far, and the company had no choice but to fire him. Guess what? Within 24 hours, people noticed a change in the office. And by the end of the week, nobody missed him!

And finally, my personal favorite:

Celebrate the Change Agent. In short, give a raise and a bonus check to any employee who challenges a dumb company policy until it gets changed.

And our dune shack? Despite my begging and pleading, the owner of the shack decided to stick with his policy and to leave the place empty all week. But all was not lost. We found a brand-new condo that a bank had repossessed the week before. Fortunately, the landlord hadn't learned about all of the bank's policies yet, so we were able to move in right away. Even better, the FedEx guy had no trouble finding us: It would have been much harder for him to drive his truck down the beach.

Seth Godin (Sgodin@fastcompany.com) is the author of Permission Marketing: Turning Strangers Into Friends, and Friends Into Customers (Simon & Schuster, 1999) and the founder of Yoyodyne Entertainment.

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