Trust-Based Leadership

Trust-Based Leadership

What is More Inspiring: Leading with Shared Values or Rules and Policies?

A key theme from last year’s Great Place to Work® Conference was that many Best Companies leaders favor leading with shared values and principles instead of rules and policies. In an era where command-and-control leadership styles are waning, this approach provides an effective strategy for the evolving, trust-based organization.

Nordstrom leads the pack in succinctness with a one-line employee credo that turns the traditional notion of a “rule” on its head: “Rule #1 is: ‘Use good judgment in all situations.’ Rule #2 is: ‘Go back to Rule #1,’” shared President Blake Nordstrom in his keynote address. “This is all employees need—and it works.”

Simply put, when employees are guided mainly by rules and policies, trust is not at the heart of the relationship. And further, rules and policies do not provide a strong platform for innovation or empowerment.

However, when a deeply-held set of values and principles are in place, they serve as stakes in the ground to help guide decisions and action, foster innovation and creativity, and empower employees. And when employees feel empowered, great things happen….the most creative ideas, the most outstanding customer service, and the most innovative solutions come from the employees’ spirit unleashed.

But don’t take our word for it. Here are some quotes on the matter from other FORTUNE 100 Best Companies keynote presenters:

  • Terri Kelly, President & CEO, W.L. Gore: “If you were to go to a Gore site, you would ¬find [a poster outlining Gore’s values and guiding principles] in every offi¬ce and conference room. Our associates use it as they think about their decisions and what actions they’re going to take. This becomes the one thing they look at to make sure they’re really aligned with our cultural bindings as a company.”

  • Victoria B. Mars, President of the Board, MARS: “For every unit around the world, The Five Principles play the role and the foundation of the culture that gets created there. We’re absolutely clear that’s the way it’s going to be. We don’t have a lot of rules beyond that…These are our principles, these are our values, and this is how we do business.”

  • Bill Emerson, CEO, Quicken Loans: “As you continue to grow, senior leaders simply can’t be everywhere and make every decision. You need to have a culture and a philosophy that people can understand…because we want people to make decisions themselves.”

Action Item

Take stock of the shared values and principles that guide your company, with a focus on whether they are integrated into the hearts and minds of employees. If you see room for improvement, consider having a candid conversation with senior leadership about making this a strategic priority.