Imagine starting your first day of work at a new company. During your onboarding, someone called the Chief Culture Officer (CCO), tells you the usual things such as: employees live our company values and purpose; the company wants people to take risks and be responsible for the outcomes; it’s okay to fail, just learn from the mistake; blah, blah, blah. At the end of thirty minutes, with semi-glazed over eyes, you stand up to leave the meeting room. Just as you are about to go out the door, the CCO stops you and says, “Oh, I also forgot to mention that we have no dress code or vacation policy. Just wear clothes and take the time you need to re-energize.”
Until the CCO’s last comments you were probably thinking, “Yeah, I’ve heard all that before. That’s code language for ‘keep your head down low and don’t take any chances.” But the CCO’s comments about no dress code or vacation policy got your attention. You begin to wonder
1) Is this company real or have you stepped into the Twilight Zone?
2) Why would any company want to give this type of latitude to its employees?
The answer to the first question is “No”, you’ve not stepped into the Twilight Zone … you’ve stepped into an organisation that believes in giving its employees what is referred to as Freedom Within a Framework (more about this in a moment).
As for why any organisation would want to give their employees freedom within a framework, the answers include: customer satisfaction, employee engagement, employee productivity, increased innovation, profitability, and responsiveness in a constantly changing business environment.
What Exactly is Freedom Within a Framework?
Freedom within a framework means providing employees with a context for behaviour and performance. It establishes adaptable parameters that give employees a sense of control and ownership because they know they are not locked into fixed rules.
To better understand conceptually what freedom within a framework means, let me break it down into its two defining parameters: freedom and framework. In this case, freedom, first and foremost, means trusting employees. Freedom is about believing that if you give employees the latitude to think, make decisions, and act on behalf of the (business, company, organization), they will do the right things.
Framework means providing employees with a set of guidelines within which to work. Traditionally, these guidelines have taken the form of rigid, unyielding rules, policies, and procedures; all the things that stifle innovation in the Open Source Era (defined as an era where information is ubiquitous, ideas represent currency and entrepreneurship is the dominant platform for business success). In the Open Source Era, it is better to build the guidelines around the organization’s values (what’s important to us) and purpose (what are we trying to accomplish). When values and purpose become a living set of guidelines, they provide employees with a clear and positive sense of what they can and cannot do, to support the better future the organization wishes to create. Values and purpose, when clearly understood and embraced, provide the tools needed to set priorities, make decisions, and take risks. Clarity of organisational values and purpose encourages and nourishes freedom when intentionally designed, communicated, and executed well.
As depicted in Figure 1 below, when the framework is based upon two dimensions: freedom and values and purpose, its boundaries can be expanded as circumstance and the environment change, allowing the organisation and its employees to live, grow and thrive within it. Examples of this would be organisations in either Start-Up or Transformation mode.
The challenge is for leadership to build the framework. Note the emphasis on building the framework – it must be intentional, not haphazard. This takes leadership commitment, resources, and time to ensure that all employees understand, embrace, and work effectively within the framework. In other words, the context for freedom must be clearly established.
Here’s the paradox for leaders and employees. Freedom must be given and earned. To get employee trust, the leader must give trust. For employees to get trust, they must give trust. The framework is mutually reinforcing.
How Do You Establish Freedom Within A Framework in Your Company?
In practice, Figure 2 below, depicts what Freedom Within A Framework looks like. As noted earlier, freedom within a framework is based upon two important and interdependent dimensions, freedom (trust) and values and purpose. The framework begins and ends with your organisation’s values and purpose which set the context for priorities, actions, and decisions employees make. When your organization’s values and purpose, are clear, understood and embraced, employees tend to be more engaged and willing to take responsibility because they feel committed to the results the company is trying to achieve. They experience a sense of ownership for results.
But this only occurs if you give your employees the freedom to act. This means as a leader, you must “trust” your employees to do the right thing on behalf of the company. When leadership trust is low, and clarity of values and purpose is equally low, the result is no freedom and employee engagement and innovation suffers, which negatively impacts your company’s bottom-line.
Conversely, as you increase the level of trust in your employees, commensurate with clarity of values and purpose, engagement, innovation, and performance also increase. Employees experience greater freedom to act not just because they understand what is important to the organisation but because they have “bought in” to what the organisation is trying to accomplish and want to contribute to its success. This outcome positively impacts your company’s bottom-line.
Figure 3, below, depicts how varying levels of leadership trust and clarity of values and purpose impacts an organisation’s performance, especially in the areas of engagement and innovation.
It is important to call out that there is a clear path of progression for introducing freedom within a framework within your organisation. It starts with Freedom Level 1 and ranges to Freedom Level 3, with variations in between. Giving lots of freedom without clarity of values and purpose can result in actions being taken that are not consistent with what is important to your organisation. Conversely, having clear values and purpose but no freedom generally results in employees waiting to be told what to do. The key to successful implementation of a freedom within a framework in your organisation is to recognize that all leaders must model the freedom behaviours, carefully monitor progress, continuously refine it, and be patient. It takes time.
Are Companies Really Using Freedom Within A Framework?
The idea of freedom within a framework is not new. Neville Isdell, former CEO of Coca-Cola introduced it to Coke around 2004. In an interview with Gregory Kelser for HR People + Strategy’s newsletter, Isdell indicated that he implemented the idea of freedom within a framework because he wanted leaders to make decisions and that those decisions should fit within Coke’s plans for growth.
Richard Branson, CEO of the Virgin Group, posted an article in Entrepreneur in 2013 titled, “Giving Your Employees Freedom” (Entrepreneur, 2 January 2013) in which he states, “Today the Virgin Group is made up of dozens of companies headed by CEOs and managers who have the freedom to run their businesses as they see fit. This philosophy goes against the usual rules of business and may seem unmanageable, but it has turned out to be one of the keys to our success.”
In his recent book, Open Source Leadership, (2017) my colleague, Rajeev Peshawaria describes why leaders in the Open Source Era should build their organisations around freedom within a framework when he highlights the fact that in today’s business environment, speed is everything and the ability to remain agile and nimble in an ever-changing landscape is critical. Unfortunately, many of today’s organisations still operate as if it were 1990 by not trusting their employees and imposing strict internal rules, policies, processes, and procedures. The result is a bureaucracy which is anything but agile and nimble.
Finally, Reed Hastings, CEO, and co-founder of Netflix, is living proof of the benefits of giving employees freedom within a framework. During an April 2018 interview with TAD curator, Chris Anderson, he described his leadership philosophy as follows, “I pride myself on making as few decisions as possible in a quarter. Sometimes I can go a whole quarter without making any decisions.” According to Hastings, the key to this lies in giving each employee freedom to make their own wise decisions on behalf of the organization. Hastings refers to this as freedom and responsibility.
The list of organizations building their cultures based upon freedom within a framework is growing and includes a diverse and venerable group, ranging from start-ups to established organisations including Alaska Airlines, The British Council, Campbell Soup, Coca-Cola, Google, Gucci Group, McDonald’s, Proctor & Gamble, SoulCycle, The Virgin Group, and Warby Parker.
Despite the previous list of companies using some of Freedom Within a Framework, it is fair to point out that this approach may not be for every organisation and every employee. Even Netflix acknowledges that it is “Mostly for our salaried employees; there are many limitations on this for our hourly employees due to legal requirements.” You have to decide if it is right for your organisation and if you are willing to take the time required to implement it.
I’m not suggesting that leaders immediately do away with all rules and turn employees loose. Those conditions are called anarchy. What I am suggesting is that instead of ridged rules, in the Open Source Era, it is more effective to lead within the context of values and purpose, balanced with the trust that employees will perform with the company’s best interest in mind. Given these conditions, most employees will rise to the occasion.