Don't Scar on the First Cut

Just finished reading REWORK by Basecamp’s founders Jason Fried & David Heinemeier Hansson (DHH), Don’t scar on the first cut is the part that stuck with me for some reason:

The second something goes wrong, the nature tendency is to create a policy. “Someone’s wearing shorts!? We need a dress code!” No, you don’t. You just need to tell John to not to wear shorts again.

Policies are organizational scar tissue. They are codified overreactions to situations that are unlikely to happen again. They are collective punishment for the misdeeds of an individual.

By the way, what’s wrong with wearing shorts to work?