Business owners, especially startup entrepreneurs, face agonizing dilemmas. When should you break your own rules? When do you let yourself be flexible with customers, vendors, employees — and yourself? On the other hand, when should you hold firm? There’s no easy answer. Yet getting it right can make a big difference in your business success, and in life.


Rules Set Expectations

Consider the role that rules play. “Rules are tools.” They set expectations, and boundaries of behavior. By making people’s actions predictable, rules reduce uncertainty and enable organizations to function and grow. Without rules, human life would be chaos, and business impossible. Even dog packs have their own rules.

Once your rules set expectations, there’s danger in too much flexibility. It can set new and unwelcome expectations. “Give and inch, and they’ll take a yard.” Break your own rules too much, and they don’t serve you anymore.

In business, too much flexibility can erode customers’ expectations about pricing, vendors’ expectations about delivery and terms, and employees’ expectations about salary, benefits, workspace, scheduling, assignments, you-name-it. A common example: do you stick with your published pricing, or discount it to capture the business? When are customers willing to pay full freight, and when must you bend or lose out? Perhaps it’s better to lose out in the short term, and maintain the integrity of your pricing. In other words, maintain the expectation. Otherwise customers might walk all over you, expecting discounts all the time. It can set a new, lower threshold for what people are willing to pay you.

When you Can Skirt the Rules

Here are ways you might be able to skirt some “break your own rules” dilemmas. Remember, the real objective is all about managing other people’s expectations.

  1. Establish a brand reputation. Do great work. Sell high quality products. Within reason, people will pay a little more for peace of mind. They’ll pay for predictable satisfaction without hassles. My auto mechanic isn’t the cheapest in town, but you couldn’t pry me away from him. Why? Because he’s smart about helping me prioritize repairs on a limited budget. He does competent repair work. And above all, he’s got integrity. I always get treated fairly; I don’t have to worry about it. This expectation keeps me from going elsewhere. By the way: I heard about my mechanic by word of mouth, so expectation played a role from day one of our relationship.
  1. Build some flexibility into your rules. Think about it: if your rules contain wiggle room, within limits, you can satisfy varying circumstances without appearing to “break the rules”. Examples show up in employee relations. There’s telecommuting, flex-time, casual Fridays, vacation scheduling, benefits smorgasbords, and wild-card days off. On the other hand, rules that protect ethical and legal boundaries, like racist and sexist behavior, can remain grounds for instant termination.
  1. Be clear. Put it in writing. To some extent, you may be able to reduce the number of requests to break rules by stating them with explicit clarity in the first place, orally and in writing. In some cases, putting it in writing lends some gravitas. it creates more of an expectation that rules are to be followed. That’s true to varying degrees about pricing, customer and vendor relations, and employee relations. The latter especially can be a legal minefield. When employee relations sour, the best defense against court action may be having rules clearly stated in writing. The written word has another advantage. There may be times when you could break your own rules but simply choose not to. You can always point to the rulebook as a reason for not accommodating someone’s request.
  1. Make friends. Sometimes it helps to remember you are not negotiating with adversaries. It’s not a zero-sum game. Everyone depends on everyone else. When the game is played well, everyone wins.

Flexibility Frontier

Richard Branson, billionaire owner of Virgin America airline and space tourism venture Virgin Galactic, announced in September 2014 that his office staff could now take as much vacation time as they want, whenever they want. “Treat people as human beings, give them that flexibility and I don’t think they’ll abuse it,” Branson told CNN. “They’ll get the job done.” Branson said he was inspired by Netflix, which has a similar employee policy. In a blog post discussing his move, Branson quotes Netflix’s employee manual: “We should focus on what people get done, not on how many hours or days worked.”

If you throw away the rule, as Netflix and Virgin are doing, is it still a rule? Yes. Employees still have to deliver all the value they’re being paid for. And that’s the power of changing expectations on the frontiers of flexibility, if it’s done right. Bottom line: rules still, well, rule. You can make them and break them — as long as you always set the right expectations.

So what’s the ultimate answer about breaking your own rules? As we said, there is none: just a constant flow of opportunities to use wisdom, diplomacy and the power of expectations to make the most productive deal you can, and keep relationships positive as much as possible.