Henrik Kniberg, a management coach who’s worked with LEGO and Spotify, believes that assuming an organization can have either full autonomy or full alignment (where tasks for employees strictly align to the goals and directives of their managers) amounts to a false dichotomy. A bit of each is required, both for starting a business and maintaining it. A leader of a company of one has the role of enabling autonomy while providing alignment-setting processes and making sure there are common goals. Achieving this delicate balance can be challenging.

This case, you’ll have noticed, is by no means unique. Throughout this book we’ve told stories about lower-level employees making multimillion-dollar financial decisions without getting approval from the boss. Outsiders are often puzzled about how this can work in a financially responsible organization. The answer is simple: it’s because of the alignment.

In a loosely coupled organization, where talent density is high and innovation is the primary goal, a traditional, control-oriented approach is not the most effective choice. Instead of seeking to minimize error through oversight or process, focus on setting clear context, building alignment of the North Star between boss and team, and giving the informed captain the freedom to decide.

In select instances like these, where error prevention is clearly more important than innovation, we have loads of checks, processes, and procedures to ensure we don’t screw anything up. In these moments, we want Netflix to be like a hospital where there are five people verifying the surgeon is operating on the correct knee. When a mistake would lead to a disaster, rules and process isn’t just nice to have, it’s a necessity.

With this in mind, you can consider your objective carefully before deciding when to opt for freedom and responsibility and when rules with process would be a better choice. Here are a set of questions you can ask in order to select the right approach:

• Are you working in an industry where your employees’ or customers’ health or safety depends on everything going just right? If so, choose rules and process.

• If you make a mistake, will it end in disaster? Choose rules and process.

• Are you running a manufacturing environment where you need to produce a consistently identical product? Choose rules and process.

And this story repeats itself through the history of management science; almost every classic of the literature seems to have described a way of adapting systems to a more complicated world, and then to have become obsolete itself. If you look past the slogans and think about what things like ‘management by objectives’, ‘focus on core competences’ and so on actually mean, they are all different ways of advising executives to restructure their businesses so that they don’t generate complexity faster than it can be managed.