Policies often emerge as a reaction to past mistakes, becoming a sort of organizational "scar tissue." They are designed based on unfortunate incidents that are unlikely to recur, effectively punishing everyone for the actions of a few. This tendency can lead to the formation of bureaucratic systems within companies, which develop gradually and unintentionally through the accumulation of many policies, each one addressing a singular event.

The author, Jason Fried, emphasizes the importance of caution when instituting policies. He warns against creating rules due to isolated incidents, advocating for a focus on recurring situations that genuinely merit regulation. By avoiding unnecessary policies in reaction to singular events, organizations can prevent the unintentional creation of cumbersome bureaucracies and maintain a more agile and effective work environment.