commitment based management

The nature of work has shifted in the century since Henry Ford introduced the Model T. Today, activities adding the most value–entering new markets, for example, or shifting business models–cannot be reduced to standardized operating procedures. Economic activity has migrated beyond the boundaries of the firm and now takes place in an ecosystem of organizations that are interlinked but independent.

While work has changed, the tools to get things done have not. Executives invoke hierarchical power in a networked world, and try to standardize non-routine activities. Leaders rely on power and process not because they work, but because they are familiar.

An alternative approach frames an organization not as a hierarchy of power or bundle of processes, but as a set of overlapping networks of commitments that extend up and down the chain of command, across units within the organization, and beyond the boundary of the firm. Effective execution, in this view, occurs when people make the right commitments and fulfill them with vigor. Organizations can enhance the quality of execution by requiring public commitments, which confer five key benefits.

Execution is about getting things done. When driving execution in their organizations, hard-nosed managers dismiss talk and demand action. Phrases like “cheap talk,” “all talk, no action,” and “rhetoric versus reality” illustrate the common distinction drawn between talking.

This bias for action reveals a deep-seated belief that action changes the real world, while talking is mere commentary. Sports announcers (and fans in pubs) debate England’s disappointing performance against Algeria, but their conversations have no impact on the result. Action, in contrast, takes place when players like Wayne Rooney or Steven Gerrard step on the field and take charge of the game.

This apparently sensible distinction between talk and action ignores a crucial insight: In many situations, talking is doing. When people make a sincere promise to do something in the future, they are not merely commenting on the real world. Instead, their commitment can change the situation in a meaningful way, particularly if it induces other people to change their behavior based on the promise.

The head of engineering in a software company, for example, might make a promise to his counterpart in

Many executives, consultants, and academics focus their effort on crafting the perfect strategy. assuming formulation is the hard part, while implementation is straightforward. They maximize the brilliance of their strategy, while treating execution as a thresh-hold variable that must be met.

This approach is wrong-headed. Instead of maximizing strategic elegance and accepting satisfactory execution, executives should formulate a good-enough strategy and maximize their ability to execute. Many industries exhibit limited variation in strategy, while winners separate themselves from also-rans through execution.

Many managers equate execution with process discipline. Six sigma or ISO certification, in their minds, measures of an organization’s ability to execute. But as I have argued in previous posts, the standardization that allows continuous improvement in processes also impedes the execution on novel initiatives. Motorola pioneered six sigma quality program, but look where that company is today.

The most important corporate initiatives are often non-routine. These include projects to integrate company mergers, fill market gaps that fall between current business units, roll out large-scale IT systems and develop innovative solutions to new customer needs. Promises, or employees’ personal pledges to stakeholders within and outside an organization, offer an alternative way to execute on non-routine activities with vigor.

A firm, in this approach, is less a bundle of standardized processes than a network of interconnected commitments to get things done. These promises extend up and down the chain of command, across units, and beyond the boundaries of the firm. Along with my co-author Charles Spinosa, I have studied what makes for effective promises in dozens of organizations. We have found that the best promises share five characteristics; they are public, active, voluntary, explicit, and include a clear rationale for why they matter.

Leading in turbulent times

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Don Sull is professor of management practice in strategic and international management, and faculty director of executive education at London Business School. This blog is dedicated to helping entrepreneurs, managers, and outside directors to lead more effectively in a turbulent world.

Over the past decade, Prof Sull has studied volatile industries including telecommunications, airlines, fast fashion, and information technology, as well as turbulent countries including Brazil and China, and found specific behaviours that consistently differentiate more, and less, successful firms. His conclusion is that actions, not an individual’s traits, increase the odds of success in turbulent markets, and these actions can be learned.

Don Sull’s blog: a guide

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FT Business School videos

Managing in an Unpredictable World
A series of video lectures by Professor Don Sull

Part 1: Fog of the future
Part 2: Future reconnaissance
Part 3: The strategic agility loop
Part 4: Executing with commitments
Part 5: Leading into the fog

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