Aleksander Solzhenitsyn was a young decorated captain in the Red Army stationed on the Prussian front in WWII. One day he was abruptly asked to report to his commanding officer.
"Please hand me your weapon." "Sure, why?" "Did you write in a letter to so-and-so that 'the whiskered one' wasn't conducting a proper war strategy?" "Well, yes, I suppose so, why? What is this about?"
Other men stepped forward – the secret police – "You are a spy spreading anti-communist propaganda!!" "But I would never be a spy – I believe in communism!!" "You criticize Stalin – you are spy!!"
They ripped off his medals and his captain's bars and marched him away, to eventually be thrown into what he called "Stalin's sewage system," now known as the Gulags or forced labor camps.
His book The Gulag Archipelago is a moving testimonial memorializing the millions who suffered and died in those camps which he miraculously survived due to his training as a mathematician. (He was taken off of manual outdoor labor in 50-below-zero conditions to work on calculations.)
Upon his liberation, he became an outspoken critic of Stalin and that "sewage system." He was allowed to speak out because it was convenient at the time for the current politburro. At some point he outlasted his usefulness and became more of a nuisance.
Since he'd attained international recognition by that point (including winning a Nobel peace prize which the USSR did not allow him to receive), I suppose they couldn't just make him disappear, so instead he was shipped to Germany, stripped of his Soviet citizenship and eventually exiled to Vermont.
There he lived a relatively quiet life until invited by Harvard University in 1978 to give their commencement speech.
I am guessing that everyone in the crowd that June day expected him to pour vitriol on the USSR and sing the praises of western society and his benevolent host, the U.S. They were quickly disappointed…
"Harvard's motto is 'Veritas.' Many of you have already found out and others will find out in the course of their lives that truth eludes us if we do not concentrate with total attention on its pursuit. And even while it eludes us, the illusion still lingers of knowing it and leads to many misunderstandings. Also, truth is seldom pleasant; it is almost invariably bitter. There is some bitterness in my speech today, too. But I want to stress that it comes not from an adversary but from a friend."
He had decided to use the opportunity to give the West some "performance feedback," as an outsider who is living in – but is not of – that society. A sort of counter-weight to Alexis De Tocqueville's optimism. If you're a product of Western civilization, it is instructive to read in its entirety – not to simply agree with, but to provoke thought and reflection about the society in which you live. However, it is his section on Legality that I would like to dwell on a moment because it struck me so powerfully:
"I have spent my life under a communist regime and I will tell you that a society without any objective legal scale is a terrible one indeed. But a society with no other scale but the legal one is not quite worthy of man either. [...] Whenever the tissue of life is woven of legalistic relations, there is an atmosphere of moral mediocrity, paralyzing man's noblest impulses."
What makes Market-Based Management different from other management approaches is that it is based on Hayek's concept of Spontaneous Order (and Polanyi's Republic of Science). One condition for a spontaneous order – where all the members of an organization are voluntarily cooperating to maximize long term value – is a strong set of beneficial Rules of Just Conduct – a set of general principles that applies to everyone as well as beneficial norms of behavior that are based on shared values.
The opposite of a principle-based approach is a rules-based approach. This rule-based approach is, I think, what Solzhenitsyn is addressing in his comments. I see this approach a lot – and often unconsciously paired with negative assumptions about the nature of employees: that people cannot be trusted, are stupid or must be controlled.
It's the 100 item check-list that an administrative assistant is told to complete everyday; the RR&E-as-contract that is "negotiated" to define "meeting" expectations (usually just a more sophisticated form of a check list); the memo to the mill leader from "corporate" that says "do this or you're out of compliance"; the 10 signatures needed to approve a $500 incentive…
Rules beget more detailed rules and plea's for exceptions, resulting in favoritism, arguing over which rules apply, and increasing bureaucracy — people focus on the rules and forget about the results – and worse, use the plethora of detailed (and sometimes conflicting) rules to pick and choose which to follow and which to ignore in order justify whatever it is they want to do, regardless of the benefit to the whole.
The rules-based approach promotes Solzhenitsyn's legalism, dampens the human spirit and prevents experimentation, discovery, innovation, and limits the use of individual knowledge and expertise – all things necessary to have a thriving organization where members have the opportunity to reach their full potential.
The MBM approach broadly asks us to concentrate on enforcing the general rules while allowing individuals to figure out the particulars. Focusing on the particulars causes the general to break down – as Charles Koch has oft repeated: "you can't tell someone to be entrepreneurial but then tell them what to do, when and how."
This is not to say that there is no place for detailed rules or step-by-step instructions. That would be absurd. But in this as in all areas of life, wisdom and good judgment must be applied. The MBM Guiding Principles spell out the most fundamental general principles that define the boundaries of our actions. When there's a conflict with the first three especially, they win, full stop. Start there.