Rules vs Principles

(And why principles are better for coliving)

Netflix's expense policy is one line: "Act in Netflix’s Best Interest."

Some employees think it’s too vague. What exactly does Netflix’s best interest mean? How will we know?

This approach differs from what you find in most companies, where there will be a thick rulebook describing when you can expense something.  e.g. "You can expense dinners up to $30 when working past 8pm and $75 with a client, but not the client’s family.” 

At my first job, there was a controversy when a new employee expensed a haircut before a high-stakes client meeting (so he could look professional for it) while HR tried to interpret whether this was allowed by the rules. So they created a new rule about haircuts. Policy whack-a-mole. 

I think Netflix has it right here. And that coliving communities should mostly govern themselves via principles rather than rules. 

What are some examples of principles?

Doocracy

Doocracy is a principle that we rely on heavily at Radish and other communities in the Bay Area. 

The principle of doocracy: “You can do anything in the best interest of the community without permission as long as it's mostly reversible.”

People can buy a new can opener without figuring out the procurement rules. 
They can rearrange the living room furniture without holding a meeting first.

If you are looking for crystal clear guidance in every single situation, the principle of doocracy is not going to provide that. 

Does painting a wall count as reversible if you can paint it back?
Should I get people’s thoughts before archiving a bunch of Slack channels?

What it does allow is a single principle that can align behavior without the need for a thick rulebook. 

Abundance mentality

This is a principle that applies to what food people can buy. The principle: “We live in a community of abundance and everyone should get what makes them happy.” 

Everyone has one food item that others might see as a bit of a splurge, but is important to them. For one person, it’s the fancy cheddar, for another it’s the frozen coffee pods. The Abundance Mentality says that everyone gets their thing. And that we are happy that our friends get their thing (think of it like buying your friend a drink once every couple months) and we have permission to make ourselves happy by getting our thing. 

Can people buy lobster every night then? Well, no. Everyone sort of knows when this principle is being applied in bad faith. And if they do, you can have that conversation. In our experience, this doesn’t happen in reality. 

The alternative

As an alternative, you could imagine a nightmarish tome describing things that require approval, how much approval they require, and what the process is needed to get that approval.

That tome would grow and grow over time as more edge cases are discovered and eventually you’ll need a person who can help interpret it. 

Rulebooks in a world in limited attention

I believe long rulebooks undermine communities. 

A community that governs by rules rather than principles is destined to spend all of its scarce time together crafting, editing, and debating rules.

This is not what you want to use your community’s scarce attention and time for! You should be using time together to strengthen bonds, tackling thorny issues, and creating together. You should not be using scarce gathering time debating whether the guest policy should be 2 days or 4 days and whether that changes when the guest was a former resident. 

And inevitably, once the list of rules get long enough, people will start forgetting them. No one wants to go reference a rulebook in a Google Drive somewhere. If you have more rules than people can remember off the top of their head, it’s a good sign you need to replace them with principles. 

(This is similar to the advice I gave on how to structure cobuying for vacation homes … make it simple enough to fit on a notecard) 

How do you enforce principles?

A system of rules will have a set of clearly articulated consequences for breaking the rules, e.g. go above the speed limit and get a $50 speeding ticket. 

Let's go back to the Netflix example. If HR thinks you are flouting the principle of "spend the company's money wisely" what will they do? First, they will probably talk to you. And then, if you continue to flout the principle, they will fire you.

Yes, people who habitually violate the community's principles, should be asked to leave the community. 

And who gets to interpret whether that's the case? Well ... the community.

And what if the community is wrong? Well, tough nuggets. That's what it means to be governed by a community ... the community is going to make subjective judgments in what it interprets to be its own best interest. 

Don’t forget to model the norms!

Norms are the cousins of principles. You need visible norms of behavior to reinforce the principles. 

A doocracy isn’t a doocracy unless there are examples in the culture of people doing. If you want people to do, show them what it means to do.  

So leaders of a community need to model the behavior they want to see to compliment the principles. Otherwise, they will just be words in a Google Doc somewhere.