Leslie Ungar, The Inner Brilliance of Electric Impulse, Inc.

Rules: Are They for the Exception or the Rule?

Leslie’s Articles

Do you run your business by wisdom or policy?

We are a society of rules. Think about it. We have rules for everything from how we tip to how we are legally able to spy in the NFL. It is not against the “rules” to spy, you just have to follow the rules for when and how to spy. Have you thought about how and why rules are made? How and why do we amend rules?

Look for the measurable, observable evidence that either supports your rule or provides evidence to change the policy. When is a rule a rule and when is it a policy? Webster defines a rule as a prescribed guide for conduct or action. Interestingly, policy is defined as prudence or wisdom in the management of affairs.

Imagine a world where wisdom was used in the management of our professional and personal lives? A client told me what he learned about wisdom at a YPO meeting in Cleveland Ohio. The true story made me re-think rules and it may prompt you to rethink your policies also.

Bruce Nordstrom, grandson of Nordstrom’s founder, addressed the members of the Young Presidents Organization a few years ago. After he spoke, one of the young lions asked a question. Probably a question on most of our minds as we shop at any Nordstrom anywhere. Someone asked him if people took advantage of Nordstrom’s famous return policy. You’ve all heard the story about the customer who returned tires to a Nordstrom’s location and they didn’t even sell tires. As urban legend tells the story, the associate gave the customer a refund. Accounts vary that the refund was from $25 to $145.

“Yes”, he replied, “there are some people that take advantage.”

What business lessons can we learn from the back of a horse?

He went on to say that only about ten percent of their customers took advantage of the Nordstrom liberal return policy. Customers returning items are not challenged to produce receipts, sales tags, or even unworn clothes. “You don’t make policy based on ten percent,” he was quoted as saying. “You make policies based on the 90%.”

This story, which has circulated since the mid 70’s, long before the Internet added to its viral telling and re-telling, captured an essence of what it takes to build and maintain a brand. You make policy based on the majority not the minority.

Your customers, clients, patients, guests, and members feel the same way. Imagine a world where companies created a culture around the many. Look at your rules or policies for how people do business with you. Are they rules based on a prescribed conduct or do you have policy based on wisdom? Are your rules/policy driven by the 10% that try to ruin it for the rest of us?  Or have you positioned yourself like Nordstrom and created policies around the 90%?

I used to show horses. Only when the competition was over could participants approach the judges and ask for the judge’s input. Their observations could only be used for the next horse show.

I was always the first in line to ask a question. I wanted to know why I did or didn’t win and what the judges saw from the center of the horse show ring. Sometimes they would remember, or after refreshing their notes they might have a specific comment. If one judge told me something, I would listen but I would probably not make a change. I was listening for patterns that I couldn’t ignore. If I heard the same comment from different judges or multiple times then I knew that was an area I needed to address.

Listen, look, and learn from your patterns. Do you have a pattern of making policy or rules? Does your pattern reflect the minority or the majority? Are you using your 90% to capture an essence of what it takes to build and maintain a brand?