As an entrepreneur, there are an infinite number of challenging scenarios that can occur daily.
There aren’t any rules for the unknown; so the best leaders have none at all.
Kevin is so passionate about having no rules, that he’s written a book about it, and was eager to tell me how to be a better leader.
Great leaders don’t make rules, they co-create standards
Kevin told me a story of how he sold his first company and tried to reimburse post-it notes, after resuming a role as partner there.
To his shock, the CEO said they don’t reimburse them because there’s a cheaper way to scribble notes down. The CEO showed Kevin scrap pieces of A4 paper on his desk and said staff should draw on that.
It was a big change to how the boss said things would originally play out, as Kevin explained:
“The CEO started in a good way saying, ‘Hey, Kevin, I’m not your boss. We’re just partners, and we’re just going to build this company together, and we’re all equal around here.”
But 30 days later, Kevin learned he wouldn’t get his money back for post-it notes because they were a “wasteful expense.”
“Just days after this big speech about how I was equal to the CEO…I can’t even buy post-it notes, and no one even told me that! I just find out when they won’t pay me back!”
Kevin also learned they didn’t reimburse for alcohol:
“Another guy that joined, he was traveling on business and he tried to submit his receipt for dinner. And there was a beer, one beer as part of his dinner. They said, no, we don’t reimburse for alcohol. And so he could have bought a five-dollar milkshake — they would’ve paid for that — but not a three dollar beer.”
So why were these regulations in place?
Kevin said the CEO had the rule because “one of the values of the company — it was literally profitability.” Despite the CEO insisting that’s not why they existed, he said it is what “enables us to fulfill our mission.”
Kevin worked out the CEO was using the no post-it reimbursement rule as a symbol of frugality.
“To his credit, he just changed it, and I stayed there for five years. And I never tried to reimburse post-it notes, even though I knew I could. It’s because we had that conversation. And it was rooted in values. But when it was a rule, it crowded all of that out.”
Kevin was able to change the rule because he previously owned the company, and had a strong relationship with the CEO.
But your staff generally might not say anything. And the fact they can’t annoys them; and that can create a bad environment.
“Once he heard what was going on, to his credit, he said, ‘Hey, Kevin, you know, I didn’t realize this was causing a problem or that this was really how people were upset about this. Fine. Everyone go buy post-it notes…'”
Kevin says there was a better way the company could have gone about sending that frugal culture message:
“Let’s talk about what we can all do and little ways to send that signal that we’re a frugal culture. And then people would have bought into it and been happy about it.”
Though they got there in the end, Kevin boils it down to this simple piece of advice: “Get rid of the rules. Go for standards.”