Part I: Principles Over Rules
Most bureaucracies rely on a rules-based system. Each time a problem arises, The Rule is created to fix it. Over time, these rules stack up like scar tissue, smothering our freedom to use our good judgment. Eventually, the weight becomes stifling: the best people quit, the institution stagnates, and then it spirals into a slow, Kafkaesque death - replaced by a new startup "unburdened by what has been".
The circle of life.
Wefunder seeks to avoid this fate. Instead of defaulting to a new rule, we err towards trusting our team to make decisions guided by principles.
Why? Rules-based systems collapse under complexity. Humans can only remember a limited number of rules, but reality demands navigating countless if-then-else scenarios to make smart decisions. Creating a rule can feel satisfying for the rule-maker — it gives the illusion of a job well done — but it undermines team culture and, counter-intuitively, makes more serious mistakes more likely.
Human cognition is limited—we can only focus on one thing at a time. When we fixate on complying with rules, we lose sight of the more important underlying principle. More damning, research shows that when our conscious mind is preoccupied with rules, it disrupts the development of 'tacit knowledge'—the instincts and subconscious know-how that drive good decision-making1.
To get the best out of our team, they can’t be treated like cogs in a machine. When humans are treated like robots, they start feeling sad and unfulfilled. Sad humans get lazy and demotivated. We’re bad at being robots - we don’t have their perfect-recall memory and CPU horsepower. Most of us crave the power to use our God-given intuition and judgement. That’s where we shine.
To survive against the brutality of Mother Nature, our species was forced to evolve our intuition. Note that I didn’t say reason or intelligence. Those are quite helpful too! But our intuition is the short cut that helps us navigate through bewildering complexity so we can focus our conscious mind on what truly matters.
Intuition has a bad rap - its colloquial meaning can seem unscientific or arbitrary. I’m talking about the dictionary definition: “the ability to understand something immediately, without the need for conscious reasoning.” Our rational brain can’t handle the overwhelming number of variables our intuition effortlessly processes in the background. Without it, our conscious mind collapses under complexity.
Intuition is shaped by every interaction we’ve ever had in our entire lives, all stored fuzzily in our subconscious. Our brain is a massive pattern matching recognition machine that feeds on our lifetime of data. Pattern-matching... perhaps it’s not a coincidence that latest advancements in AI are built on the same premise? Is it more effective to program millions of individual rules for a self-driving car or teach it to recognize the patterns that govern the world around it?
If intuition improves with more "data", Wefunder must do a better job of feeding our team’s brains with the right experiences. This is how we’ll make better decisions as we scale. This is how we can attract top talent who demand the freedom to use their judgment. It’s the foundation of a principles-based system—and the only way it can work. But this is far more challenging than relying on a rules-based system. Creating a rule is so much easier!
When we were an 8-person startup all working at the same table, building intuition was easy. Lessons were shared instantly, everyone was driven and motivated and aligned, and no one had ever left the company.
Now, the challenge is far greater: we must continue to hire smart driven people with good judgment. But, more importantly, we need to build systems that can help us all continue to refine and share our intuitions.
Have you ever thought, “OMG! I can’t believe SoAndSo did that! That was so stupid!!!!” If it keeps happening, perhaps we’ve hired the wrong person. We hire at the right end of the bell curve: not everyone is born with the same quality biological computer or the drive to improve it by feeding it with good data.
But, far more often, when I think, 'How could they be so stupid?!', I know that it was my fault. I’ve failed to create a system to builds their intuition.
In Part II, I’ll dive into how we can build those systems. Most companies would call this "training", but that’s normal HR-speak. Top performers don’t want training sessions where a "teacher" lectures at them. Instead, our culture thrives on self-directed learners. We all can take ownership of shaping our own 'curriculum'—a collaborative, ever-evolving living document that continually stuffs our minds with more wisdom.
https://press.uchicago.edu/ucp/books/book/chicago/T/bo6035368.html