Do you lead based on “policies” or on “principles?”

I had an encounter this week that reminded me the difference between policies and principles. The pre-owned car I bought a few months ago came with Sirius Radio and the subscription was still active when I left the lot. That was great until last week when it finally expired and I called to have it renewed. I was willing to pay to restart the service under my name and credit card, but I was informed that the company’s “policy” would not allow that until the previous subscriber terminated the service. I was instructed to call the previous owner to have him take care of the cancellation. Since I bought the car from a dealer, I had no way of knowing who that was, and the Sirius representative couldn’t tell me (based on company policies). Needless to say, I was baffled by the company’s response. Eventually Chris, a representative of the dealership, got involved. It was not the dealer’s standard policy to resolve issues like this, but its principle for outstanding customer service was the only justification Chris needed to go above and beyond the normal procedures.

In an effort to codify a company’s principles, expected behavior is defined as policies. Yet in the case of Sirius, all the training was on the policies, not on the underlying principles. And I would imagine Sirius’ recognition (or punishment) system is oriented around policy compliance. What it seems to have missed, and what the auto dealer got, was the “why” behind the policy.

Here are a few questions to consider at your company:

  1. Do your customer-facing representative reply to customers by quoting your policies or by explaining the principles that guide your decisions?
  2. Do your team members feel empowered by your principles or stifled by your policies?
  3. Does your company respond to corporate incidences based on guiding principles or based on rigid policy?

What situations have you encountered recently where policies got in the way of principles? Conversely, where have you encountered someone doing the right thing despite gray areas in company policies?