The first software company I ever worked for had rules for everything. Some of them were useful: how and when to submit code and documentation, which compiler to use and who to notify when making modifications. But this company went further. There were rules for ordering stationery, using the lunchroom, cleaning out the refrigerator, and recycling soda cans. There was even a "standard operating procedure" for taking a shower.

It's easy to look back on this and laugh. But the proliferation of rules isn't benign or even neutral. What we now know from over a hundred years of studying organizations, is that rules follow the law of diminishing returns: The more rules you impose, the less likely it is that anyone will follow them.

The reason for this behavior isn't that complicated. Rules—especially dumb rules—imply that we are children, that we don't know how to behave. Adults, not unreasonably, resent this. And so, to demonstrate our autonomy, to prove that we are not children, we have to break some of the rules. That's why factories with a plethora of regulations find graffiti in the toilet and trash in the break room. The independence of individuals must break through.

What that means for leaders is that rules should be imposed with extreme caution. Before introducing one, ask yourself the question: Could people be trusted to understand how best to do this? Do they really need a rule? If you're doing an excellent job articulating values and priorities in your business, most rules are superfluous—but that doesn't mean they're neutral.