Among many great books I read this past summer, Simple Rules: How to Thrive in a Complex World by Donald Sull and Kathy Eisenhardt was one of my favorites. True to its name, the book argues through a series of illustrative examples that defining, improving upon, and abiding by “simple rules” is a foolproof way to solve difficult situations from business strategies to your personal life.
I chose to share this book because I think the importance of simplicity is often forgotten at startups. Furthermore, it’s hard to make strategic decisions with an eye to simplicity, or find simple solutions to complex problems. And with multiple stakeholders in play especially in Series B and C stages, how can you congeal all of these contrarian views into a unified voice?
That’s where simple rules come in. Eisenhardt and Sull argue that there are 6 main types of simple rules you can create to tackle complex problems. In their words, “simple rules provide a powerful weapon against the complexity that threatens to overwhelm individuals, organizations, and society” (8). Ultimately, the most successful companies focus on identifying critical processes, like product development or customer outreach, and establish clear rules to live by for those processes to ultimately skyrocket to success. A business’ strategy should be established as a set of simple rules to guide important organizational decisions (143).
The six types of simple rules are:
1. Boundary rules – deciding between two mutually exclusive alternatives
2. Prioritizing rules – ranking options
3. Stopping rules -- when to reverse a decision
4. How-to rules – task execution
5. Coordination rules – getting multiple actors to work together
6. Timing rules – getting things done in an appropriate time/rhythm
A great way to wrap your head around the idea of a business successfully implementing simple rules as the book details is Zipcar – the world’s largest car-sharing network relies on a handful of simple rules to coordinate its extensive and complicated operations. The company has 6 simple rules to 1) report damage, 2) keep it clean, 3) no smoking, 4) fill ‘er up, 5) return on time, and 6) pets in carriers. As we can all experience firsthand, Zipcar works really well and has grown so successfully in large part due to its attention to simplicity. Beyond the working world, you can also apply simple rules to improve processes in your life. For example, you might make a rule to not check emails before 10 am, not eat junk food late at night or take time every day to meditate. The simpler the rule, the easier it is to not only remember but put into practice. Furthermore the simple rule should “move the needle” on something that really matters to you – e.g. the meditation simple rule might be more relevant for a busy person struggling to find balance but not for an active yogi.
Of course, simple rules do not make data and data-driven decisions invalid. As I stated in a past post, large data troves can be critically important to identifying and prioritizing strategic decisions. However, “simple rules focus on only the most critical variables” ignoring the “tenuous correlations” or noise that complicated models often incorporate (34). This is backed up by evidence – I was surprised to learn that psychologists have found that people outweigh peripheral variables at the expense of critical ones when they take multiple factors into account.
Based on my personal reflections of my experience this past summer, I would encourage all of you to A) read this book or B) at least challenge yourself to think about the simple rules you can establish in your personal life and ultimately in a business to improve critical processes to magnify your success.
Simple Rules: How to Thrive in a Complex World
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- Mauricio BabiloniaReviewed in France on November 10, 2019
Well written and insightful
- RAEReviewed in Canada on December 18, 2015
This is one of the best books I've read
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