We decided, despite some trepidation, to remove the vacation policy, but only as an experiment. The new system would allow all salaried staff to take off whenever they wanted for as long as they wanted. There would be no need to ask for prior approval and neither the employees themselves nor their managers would be asked or expected to track their days away from the office. It was left to the employee alone to decide if and when he or she felt like taking a few hours, a day, a week, or a month off.

LEADERS MUST MODEL BIG VACATION-TAKING… If the CEO is taking only two weeks’ vacation, of course his employees feel the unlimited plan doesn’t give them much freedom. They’re bound to take more time off with three allotted weeks than with an indefinite number and a boss who models just two. In the absence of a policy, the amount of vacation people take largely reflects what they see their boss and colleagues taking. Which is why, if you want to remove your vacation policy, start by getting all leaders to take significant amounts of vacation and talk a lot about it.

Leadership modeling is the first part of getting the unlimited vacation to work properly. The other concern many have about removing the vacation policy is that their teams will use the freedom to take off months on end at inconvenient moments, harming teamwork and sabotaging the business. That’s what brings us to the second required step for a successful lifting of vacation policy. Do this well and it will also help you fix the problem of any leaders in your organization, like Kyle, who don’t emulate the big vacation-taking their bosses are modeling and in doing so fail to achieve healthy work-life balance on their own teams.

Once you have a workforce made up nearly exclusively of high performers, you can count on people to behave responsibly. Once you have developed a culture of candor, employees will watch out for one another and ensure their teammates’ actions are in line with the good of the company. Then you can begin to remove controls and give your staff more freedom. Great places to start are the lifting of your vacation, travel, and expense policies. These elements give people more control over their own lives and convey a loud message that you trust your employees to do what’s right. The trust you offer will in turn instill feelings of responsibility in your workforce, leading everyone in the company to have a greater sense of ownership.

• “When removing travel and expense policies, encourage managers to set context about how to spend money up front and to check employee receipts at the back end. If people overspend, set more context.

• With no expense controls, you’ll need your finance department to audit a portion of receipts annually.

• When you find people abusing the system, fire them and speak about the abuse openly—even when they are star performers in other ways. This is necessary so that others understand the ramifications of behaving irresponsibly.

• Some expenses may increase with freedom. But the costs from overspending are not nearly as high as the gains that freedom provides.

• With expense freedom, employees will be able to make quick decisions to spend money in ways that help the business.

• Without the time and administrative costs associated with purchase orders and procurement processes, you will waste fewer resources.

• Many employees will respond to their new freedom by spending less than they would in a system with rules. When you tell people you trust them, they will show you how trustworthy they are.