How would you test the hypothesis that transparency is a more effective means of control than top-down rules? That’s the question a group of midlevel managers in a global pharma company asked themselves during a workshop led by one of our colleagues.

The first step was to look for a Byzantine policy that was widely regarded as a pain in the ass. As you might suspect, they had plenty of candidates, but the company’s irksome travel policies seemed a particularly juicy target. In an attempt to rein in a corporate travel budget of roughly $500 million per year, the finance function had developed a maze of niggling rules. There were strict guidelines on who could travel, for what purposes, on which airlines, and in which class of service. Hotel and rental-car choices were similarly constrained…

The experiment, modeled on the company’s methodology for drug trials, involved two pairs of treatment and control groups—one pair at head office and the other in an operating unit. The experiment was designed to test the hypothesis that increased autonomy and transparency would (1) simplify travel planning, (2) reduce frustration, and (3) not raise costs. Fifty people were recruited for each group, for a sample of two hundred individuals. The treatment groups were told that for the next ninety days, they’d be able to make their own travel arrangements with no pre-trip authorizations or post-trip audits. The catch: all their travel expenses would be posted online for everyone to see.

At the end of the trial, the team analyzed the results. A large majority of those in the two treatment groups—74 percent and 87 percent— reported that the new process was less time consuming than the old one. What was more surprising was that 45 percent of the participants said the simple rule change had increased their overall job satisfaction. The researchers had expected travel costs to edge up slightly, and were prepared to argue this was a price worth paying for a more time-efficient process, but in the end, travel costs fell for the treatment groups while remaining essentially unchanged for the control groups.

With the absence of a policy, most people look around their department to understand the “soft limits” of what’s acceptable. I have always been interested in travel and before we lifted our vacation policy I already tried to take a good amount. But after we lifted the policy I started talking a lot more about those vacations to anyone who was willing to listen.

SET AND REINFORCE CONTEXT TO GUIDE EMPLOYEE BEHAVIOR… This brings us to the second step critical for successfully removing your vacation policy. When you remove a policy, employees don’t know how to operate with the absence. Some will be paralyzed until the boss tells them explicitly what actions are okay. If you don’t tell them, “Take some time off,” they won’t. Others will imagine they have complete freedom to behave in wildly inappropriate ways like going on vacation at a time that causes pain to everyone else. This not only sabotages team effectiveness, but could ultimately lead the manager to throw up his hands and fire the employee, which is not good for anyone.

In the absence of written policy, every manager must spend time speaking to the team about what behaviors fall within the realm of the acceptable and appropriate.

...even if your employees spend a little more when you give them freedom, the cost is still less than having a workplace where they can’t fly. If you limit their choices by making them check boxes and ask for permission, you won’t just frustrate your people, you’ll lose out on the speed and flexibility that comes from a low-rule environment.

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.