Simple Rules: How to Thrive in a Complex World – Summary of Presentation by Kathy Eisenhardt
Documented by Paul Yoo
Kathleen enthralled our LILA community with compelling arguments on coping with complexity with simple rules. This brief captures the features of simple rules, why they work, and how to create (and update) them. Each major point is illuminated with examples (indented) of simple rules effective for the respective organizations or further explanation.
“Simple rules are short-cut strategies that save time and effort by focusing our attention and simplifying how we think.”
Features of Simple Rules
- Simple rules are simple. There are only a few (2-5) rules.
- Simple rules depend on the person and situation. “Your rules are not my rules”
- Simple rules relate to a defined activity. They’re not platitudes, not one-time only
Consider the following contrasting examples of simple rules on the activity of eating in different situations. Michael Pollan, author of In Defense of Food, has three rules on eating: eat food; not too much; mostly plants. These are quite different from Stanford football team’s rules on eating: eat as much as you want as long as you can pluck it, pick it, or kill it. They are both effective, simple rules on eating for their respective situation but inappropriate for the other situation.
Simple rules may be different even in similar situations if the people are different. Indiegogo and Kickstarter are both crowdfunding websites but they have different values which are reflective of the founders’ values. Indiegogo, founded by Berkley graduates, has a rule to fund anything as long as it is legal. It’s liberal, egalitarian, and for everyone. Kickstarter, who’s founders have a background in art curation, fund only if it fits one of their thirteen categories. They follow the model of curation—some criteria must be met.
Types of Simple Rules
There are many types of simple rules, and Kathleen detailed three types: boundary rules, “how-to” rules, and timing rules.
- Boundaries Rules: rules that are used in situations where you must decide between “yes” or “no,” or between alternatives. They are useful when there are too many alternatives and the alternatives are mutually exclusive.
The Weinstein Company has boundary rules in choosing which films to produce. The characters in their films are likable despite their critical flaw (i.e. Alan Turing in the Imitation Ga,e), and the films deal with the basic human condition (i.e. being gay where it’s not allowed). Not all films are Westein films. For example, Birdman does not have any immediately likable character, and Mission Impossible series do not appeal to any basic human condition.
Google has boundary rules in choosing whom they hire. In addition to good schools and good grades, they look for eccentricity, integrity on resume (no tolerance for fake information), and appreciate reference by fellow Googlers.
- “How-To” Rules: rules that guide the basic steps of executing a task. They are useful when innovation matters, future situations are hard to predict, and there is time pressure to get something done.
Airbnb has their “how-to” rules on how to scale: focus on hosts, rather than guests. They open monthly parties for their hosts to bring their friends. This increases their host network. They also have how-to steps for their hosts. One, take professional pictures of your property; two, always give local tips (where is the market, subway); three, always have fresh soap—signals “clean.”
Twitter observed that they spent too much time in meetings. Their how-to rules are no power points (takes too long to make and people talk too much), and no cancellations.
White Stripes, a rock band, has three how-to rules on creating innovative albums. No covers, no blues, no base.
- Timing Rules: rules used to specify when to act (e.g. deadlines, rhythms, sequences). It is useful when getting things done when timing matters, when it’s hard to get started, and when it’s easy to lose momentum.
House of Cards picked a key process that other people had not picked. Most people focus on having good writers. House of Cards has good writers, but they focused on directors. They recruited A-list directors. The rule was to direct 2 episodes, 20 days for each episode, and use stationary camera when possible. Directors had autonomy in choosing what they did and who they worked with.
Pixar’s first animation, Toy Story, took 4 years to produce. Pixar as a timing rule to produce a movie every year, which frames what must be done in year 1, 2, 3, 4 for their multiple on-going animations. It creates rhythm.
A Well-known Tech Leader company (WTL) has a timing rule to rotate the leadership for each project. People know that their turn will come at one point, and this keeps people motivated. The rotation also switches cognitive frames.
Why Simple Rules Work
- Superior opportunity capture. They balance efficiency and flexibility — IMPROV
- Make better decisions. They help us focus on what matters most, stay disciplined despite overload, and are proxies for information
- Effective coordination of people. They are easy to communicate and remember.
Wikipedia had three simple rules in their roaring growth phase: back up every entry with a source, provide facts not opinions, and there are no other rules. Too many rules get you stuck, but with no rules (constraints), you can’t get anything done. The notion that complex problems require complex solution may be a myth. Simple rules are not cognitively demanding so you can apply them even when you are tired. When the number of observations are relatively low and information well coordinated, use of simple rules can outperform more analysis and more information.
How to Create Simple Rules
- Determine the objective. Keep it specific, what you want more or less of.
- Find the bottleneck. Consider what’s really keeping you from your objective.
- Craft the rules. Use expert advice, help from others, your own experience. Have multiple types, not too many. Rules need not be perfect.
A Global Software Company (GSC) set their objective as innovation. The usual suspects for bottlenecks were hiring talent or acquiring technology. GSC had both. They defined their bottleneck as cross-business collaboration.They sought out expert advice on cross-business collaboration. They learned that every bad collaboration idea was thought of by senior leadership, and better better idea came from business unit-level heads. They applied rules to for senior leaders to ensure business unit-level heads to meet every week and to double count revenue. This worked because people won’t work with people they don’t know or people they don’t like. They did not financially incentivize collaborating because that did not make business sense.
Updating Simple Rules
- Improving the rules via reflection, related experience, and multiple ways of learning. Become more strategic.
- Breaking the rules. Respond to fundamental change or create fundament change.
Force yourself to think of 3 or 4 alternatives.
Look at the data to find the bottlenecks.
Click here to see the presentation.
 They have produced films like the Imitation Game and Django.