The Right Way to Manage Rule Breakers

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0:53HBR IdeaCast Hosts:Hello, everyone. I'm Michael Gill, and you've tuned in to the Harvard Business Review IdeaCast.

1:05HBR IdeaCast Hosts:Don't worry, I have Alison Beard with me here as well.

1:08Michael Gill:Hi, everyone.

1:09HBR IdeaCast Hosts:But we wanted to switch things up a bit today because I recently contributed to an HBR article about rule breaking in organizations and how leaders can manage it.

1:20Michael Gill:And so, while Adi and I typically introduce all of our episodes, our producer Mary agreed to let Michael bend the rules in this instance. But Michael, how should I deal with this rule-breaking of yours?

1:31HBR IdeaCast Hosts:Well, one of the main findings of my research is that when it comes to dealing with rule-breakers, the first thing to do is really understand the motivation behind the behavior. And for me, it was to prove that rule-breaking isn't always a bad thing. In this case, it maybe got listeners more interested in the topic.

1:51Michael Gill:I certainly hope so, and I want to dig into that and much more. But first, let me properly introduce you. Michael is an associate professor at the University of Oxford Said Business School, and his research, a synthesis of more than 250 studies across four decades, was featured in the HBR article, How the Best Leaders Respond to Rule Breaking. Welcome to the show that you've already opened, Michael.

2:13HBR IdeaCast Hosts:Thank you very much for having me.

2:17Michael Gill:Okay, so how big a problem is this for leaders right now? Are employees and managers breaking more rules than they have in the past?

2:26HBR IdeaCast Hosts:So we have different pieces of evidence that suggest that rule breaking is very commonplace and in many instances on the rise. So, for example, the Ethics and Compliance Initiative's 2023 Global Business Ethics Survey reported that 65 % of employees around the world said they had observed misconduct at work. And that's up from 60 % three years earlier in 2020. and in the United States more than half of workers reported seeing rule breaking and prior surveys found much lower levels so that does suggest that the problem is increasing. To understand how common or frequent this is is really difficult because lots of organizations for obvious reasons don't want to talk about it but with the evidence that's out there and certainly in my study we can see that rule breaking is happening in all sorts of organizations, in all sorts of places and industries around the world.

3:25HBR IdeaCast Hosts:And it is really common. And I think one thing to reflect on is if you've ever encountered rule breaking, and I suspect most people have.

3:34Michael Gill:Yeah. And I imagine that there are a couple of trends that might have led to an increase in rule breaking. I think of remote work, which means less oversight. I think of people using new AI tools in ways they shouldn't or aren't sanctioned by the organization. So I'm hoping it's that, not just like moral decline.

3:54HBR IdeaCast Hosts:I hope so, too. I think that you are absolutely right. I think with the rise of new technologies and new tools and it's often areas of gray where people are not sure whether or not you can do this and organizations might not fully understand what their rules are dictating. absolutely it could be driven by issues of AI and I'd like to think that there isn't a sustained moral decline but I do think that people will break rules for all sorts of reasons and sometimes that will be for self-interested reasons and sometimes it will be because they're trying to help people and the technology we're now embracing can make all of those different explanations just as valid of those as they've always been.

4:35Michael Gill:So you said not all rule breaking is bad what exactly did you find in your research about that in terms of different motivations?

4:44HBR IdeaCast Hosts:The nub of the research article is that there's a lot of different research about rule breaking and it's across the fields of management and sociology and economics and criminology. But these different literatures tended to offer different explanations for why people break rules, but didn't really speak to one another. So what I've tried to do in this study is to pull all those different explanations together. And really, when you look across all these different literatures, there are four main types of rule breaking explanations. And I'll just quickly run through those. So the first one is self-interested rule breaking.

5:28HBR IdeaCast Hosts:This is the rule breaking that most people are really familiar with. This is when people break the rules for their own self-interest to get themselves something that will benefit them. So for example, maybe they fudge their expenses or bypass approvals so they can get a bonus. That's the most well-known type of rule breaking. And that's typically what most managers think about when we think about rules being broken. But there are three other types. And the second is called pro-social rule breaking. and this is when employees break rules to try and help other people. So this might be to help a customer or to speed up a process or to help a colleague who's stuck.

6:10HBR IdeaCast Hosts:And an example of this might be an organization has a formal rule that says you can't give a refund if a customer has received bad service. But if a customer is really valuable, an employee might disregard that and provide a bonus.

6:25Michael Gill:I like those kind of rule breakers.

6:28HBR IdeaCast Hosts:they said they sound great they sound great there and there are two others and the third one is called corrupted rule breaking and this is when people are breaking rules not because they want to but because they feel pressurized or threatened or coerced in some way by their colleagues or their boss to break a rule and then the final type is edified rule breaking and this is when people break rules, again, not for themselves, but usually for a higher purpose or to do something that they think is right. So for example, that might be people working in healthcare, breaking an organizational rule if it helps a patient, for example.

7:06HBR IdeaCast Hosts:And the article's trying to say there are all these different types of explanation. And if we want to understand rule breaking, we need to understand that there are lots of different motivations for why it happens.

7:17Michael Gill:So what are the biggest mistakes that leaders make when it comes to responding to rule breaking in their organizations?

7:24HBR IdeaCast Hosts:Yeah. So I spend quite a bit of time with different organizations and have worked with quite a few in a pro bono capacity on rule breaking. And one of the most common is there is an almost default assumption, not across all, but across many managers, that if someone's broken the rule, they should be punished. but the problem with that is twofold number one it misrepresents why people are breaking rules so we've just touched on the different types of explanations and if there are four types and we're always assuming it's one in this case self-interested then you're going to have all sorts of problems and the second is if you respond to someone being self-interested and assume everyone is self-interested by punishing them then that can have really negative consequences as well in organizations.

8:11Michael Gill:So what advice do you have for managers who are trying to better discern the motivation of a certain person's rule breaking before they react or punish?

8:24HBR IdeaCast Hosts:There's several steps I think that managers could look to do, but underneath it all is the premise of asking and trying to understand why. And for many employees who break rules because they're trying to help the company or because they're trying to help colleagues or because they think they're doing the right thing, they will be more likely to offer up an explanation and to try and explain to others or their boss, their leader, their manager why they've done it. It can be tricky, of course. There will be lots of instances where employees don't want to share and that leaves managers with a problem.

8:59HBR IdeaCast Hosts:But also, if people continue to break the same rule over and over again, that's also sending a really strong signal to managers and leaders that maybe they need to think more carefully about how that rule is being used and is it really working in practice with the day-to-day realities of work.

9:17Michael Gill:Yeah so as you say in the article it's key to look for patterns in rule breaking. How can managers begin to notice those patterns if it's sort of an accumulation of anecdotes or is there data analysis that could be done?

9:31HBR IdeaCast Hosts:There's a whole host of ways that different managers might choose to approach it. The first is giving people a forum where they could share instances with you of why they might break rules. So giving people an opportunity where they might feel psychologically safe, where they know they might not be punished, or some forum in which they can share and explain why things are happening. The second is really to look for patterns. So as you touched on there, why might certain rules be broken? Well, if the same rule is being broken again and again, or a certain department continues to break the rules, then that's really interesting.

10:07HBR IdeaCast Hosts:And that can lead to conversations about why that's happening. Ultimately, whatever the approach, it's about trying to gather more data and to understand the motivations behind the rule breaking before reaching to react.

10:21Michael Gill:And once you've determined a person's motivation or a set of people's motivations, what are the different ways that you might handle the situation depending on your diagnosis.

10:33HBR IdeaCast Hosts:Yeah. So I think it will, of course, depend on what you understand to be the motivation of that rule breaking. But if we take two extreme ends of the continuum, one is punishment. One is if someone has obviously self-interestedly and knowingly broken a rule that is for their own benefit and is harming the organization in some way, then punishment is entirely appropriate if they're aware of the rule they've broken and of the consequences. And I think most managers are aware of disciplinary action and how that can unfold. But there is also the other end of the spectrum, which is, first of all, many people break rules without fully understanding why, or as we've spoken about, maybe they felt pressurized.

11:17HBR IdeaCast Hosts:And in those instances, it's really helpful to offer some compassion, to try and help someone understand why they shouldn't be breaking this rule and the consequences of it. Rather than punishing, it's more about educating and explaining. And the benefit of a compassionate approach when people aren't breaking the rule for self-interest is that they are more likely to be willing to then stop breaking the rules or to share their insights about how that rule can be changed and improved.

11:46Michael Gill:What would you say to an organizational leader who says, we have rules for reason if we go into this sort of pattern of trying to understand why people breaking rules and then maybe changing them it's just going to lead to chaos the first thing to say is i wouldn't

12:03HBR IdeaCast Hosts:recommend that any rule breaking should ever really be encouraged by by managers at least not directly organizations need rules and they should be supported and they should be enforced but if people are breaking rules they are sending a signal to management about something important and that tends to be that the rules may no longer fit the operational realities. Now it may be that some people break rules again for self-interested reasons and if that's the case and that's clear then absolutely enforce the rules and use punishment as appropriate But if a rule has been broken over and over again, and that is an issue, then that speaks to a more fundamental problem about the rule itself rather than the rule breakers.

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14:07Michael Gill:Are there instances when people actually should encourage rule breaking? You know, I think of the old Facebook saying, move fast and break things. Like, we're in a period of such dynamic change that actually we want people to be challenging rules.

14:20HBR IdeaCast Hosts:I think there's a benefit to encouraging people to consider and reflect on the rules and to ask people why rules don't work or perhaps how could they change or develop. But I think there's a real risk in encouraging rule breaking that you can set a precedent whereby people then continue to break rules. And they might at the start break rules that you want them to break or lesser rules, if you will. But the risk then is that people continue to break rules that you don't want them to break or more foundational or fundamental rules. So my view would be probably not to encourage rule breaking, but to be really sensitive to when it does happen and to try and revisit the rules to understand when those rules are not fit for purpose.

15:05Michael Gill:And you also advise leaders to try to figure out what they aren't being told, sort of when people want to break a rule but haven't yet, maybe. So how do you do that?