In order to succeed in life, does one need more rules or more freedom?
This concept can be very challenging for us to consider, as we each have a natural tendency towards one or the other.
For those of you like me who enjoy thinking of the world in terms of systems, it can be hard to visualise how to succeed with more freedom. And vice versa, if you don’t like being constrained by rules, you may struggle to understand how they can be used to produce value.
Let’s consider this concept as a spectrum, because there are companies that have achieved success at both extremes.
On one end of the spectrum we have Rules, personified by Bridgewater Associates, the largest hedge fund in the world. Bridgewater was founded by Ray Dalio, who believes that everything in life can be explained. Here is an excerpt from his book, Principles: Life and Work:
I believe that everything that happens comes about because of cause-effect relationships that repeat and evolve over time. At the big bang, all the laws and forces of the universe were created and propelled forward, interacting with each other over time like a complex series of machines that work together: the structure of galaxies, the makeup of Earth’s geography and ecosystems, our economies and markets, and each one of us. Individually, we are machines made up of different machines—our circulatory systems, our nervous systems, and so on—that produce our thoughts, our dreams, our emotions, and every other aspect of our distinct personalities. All these machines are evolving together to produce the reality we encounter everyday.
On the other end of the spectrum we have Freedom, personified by Netflix. Like Bridgewater, Netflix has a very strong culture that is guided by principles, but they have a fundamentally different approach to complexity:
Most companies curtail freedom as they get bigger…because growth increases complexity. With the right people, instead of a culture of process adherence, we have a culture of creativity and self-discipline, freedom and responsibility. The key [is to] increase talent density faster than complexity grows. Avoid chaos as you grow with ever more high performance people – not with rules – then you can continue to mostly run informally with self-discipline, and avoid chaos.
Exploring these extremes is intended to expand your awareness of what’s possible across the spectrum. Bridgewater and Netflix have risen to the top of their respective industries with starkly different approaches.
It’s highly unlikely that you’ll adopt a strategy just like Bridgewater or Netflix, but it’s a good thought exercise to consider if more rules or more freedom will help you on your journey.