To quote from Wikipedia which pulled quotes from the German newspaper Dr Spiegel:
One of the principles behind the scheme, which is mentioned in an article about the increasing interest in such schemes in Europe, from the German magazine Der Spiegel, is that road rules strip motorists of the ability to be considerate. Hans Monderman (Dutch road traffic engineer and innovator) is quoted as saying: "We're losing our capacity for socially responsible behaviour, ...The greater the number of prescriptions, the more people's sense of personal responsibility dwindles."  Another source attributes the following to Monderman: "When you don't exactly know who has right of way, you tend to seek eye contact with other road users... You automatically reduce your speed, you have contact with other people and you take greater care." [emphasis mine]
What’s working here seems to be man’s propensity toward “spontaneous order.” This concept goes back to the writings of Chuang Tzu (4th century BCE), and more popularly the economist Friedrich Hayek (1899-1992).
Spontaneous order is the rise of order out of what appears to be chaos. The order is driven by individuals solving for their own self interest. Motorists without signs to look for, look for people and situations. Pedestrians with no crosswalks to protect them, cross where it’s most advantageous and learn to watch for traffic. The eyes and interests of motorist and pedestrian meet and order is negotiated as the car slows enough for the pedestrian to move past. Everyone is happy and according to observers of this traffic innovation, risk is reduced.
So why am I including this thought in a blog on people management? In our metaphor, the boss and his orders are the traffic signals. Employees are the equivalent of pedestrians and motorists.
What’s the lesson? Motorists and pedestrians know where they are going. They have their goal in mind. Pursuing their goal (their destination) they do their best to determine the most rewarding way to get there. Without signs, they negotiate the best solution for navigating their crossed paths. With signs they will find their progress impeded by stop signals, crosswalks, rules and regulations. Speed and efficiency is achieved by situations that require everyone to think about the best way to achieve their goal, their self-interest.
And so it is with your employees. The more policies, rules, regulations, instructions, directions and limitations you create the more you damage efficiency, productivity and profitability.
The driving force behind spontaneous order is self-interest. What is implied in self-interest is that people know what they want. Therefore, your people need to know what goals they should achieve and then be allowed to pursue them with as little interference as possible. However, it’s your job to track progress and results. You don’t want your pedestrians and motorists (your employees) wandering the streets aimlessly. You simply want them to choose their own way to get to their destination.
Your people are problem solvers; each one of them (although some will be better than others). Work to develop trust in the power inherent in each person. Pose the question, identify the goal and let them solve.