Here is the thing about rules:
You can make a rule, and punish non-compliance with that rule, when you live in a closed system. I can tell my son that he can’t watch TV if he hasn’t picked up his room. He can’t walk out the door (yet) because his options are limited as an 8 year old.
But as he grows my hope is that he will become much more independent and develop his own voice. His world and opportunities will become much larger.
If I want to teach him at that time my rule structure will have to evolve. Likely it will become more based upon principles ad reason rather than simple punishment.
And there is the rub.
Punishment works best in a closed, defined ecosystem. Simple law can work this way. Do something wrong and go to jail.
But what it, as a company leader, you want to keep great employees? You can’t just punish them into staying (I guess you could try it but I haven’t found it to work). You must give them a higher purpose/motivation. Something much like principles and values that they respect that will help them decide voluntarily to stay with the firm.
Intellect in this global environment is highly fluid. It has the ability to move to its best use much more easily than at any time in history. The ecosystem has officially changed.
And when the ecosystem has changed, the old ways of rules and punishment don’t any longer apply.
If you recognize this, you can not only build a great company/team but a great culture as well.