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Commitment Based Management

Written by: Chris Majer

Article Overview: As we move into this new century, we can look back and see that the very nature of work has changed dramatically in the last 50 years, yet our practices of management are essentially unchanged from WWII. What we have done is add technology to a set of practices that were intended to be effective in a time when mass factory production and agriculture made up 95% of the global economy. Unfortunately these same practices are still standard at business schools and big companies around the word.

Commitment Based Management

As we move into this new century, we can look back and see that the very nature of work has changed dramatically in the last 50 years, yet our practices of management are essentially unchanged from WWII. What we have done is add technology to a set of practices that were intended to be effective in a time when mass factory production and agriculture made up 95% of the global economy. Unfortunately these same practices are still standard at business schools and big companies around the word.

The value generators in today's workforce are what we are terming tacit/knowledge workers. These are people who are creative, innovative, have a body of competence and knowledge, and know how to move across organizational barriers to get things done, satisfy customers, think creatively and strategically, and innovate. They are mobile, agile, used to working on complex projects, and capable of overcoming the tired management practices that only measure their activities, reward half- hearted performance, and are concerned with only financial measures. Thus, attempting to build a world-class culture based on the current practices that are today's mainstream or that are coming out of the business schools is a non-starter. Instead we suggest that it is time to introduce business leaders to a new set of practices.

Why do we say that? The nature of today's global business demands that you build a sustainable, coherent and consistent culture that will enable your people to innovate, adapt to fluid market conditions, and work in an evolving political and economic structure. Your leadership must be able to move quickly to adapt to change or take advantage of opportunities. Unfortunately current management theory and education has only variations on two traditional responses to meet these challenges: , hierarchy and process, and neither are sufficient. In the hierarchical response, new information makes its way into the company and works its way up the hierarchy where it is considered, studied, and some decision is arrived at.arrived at. This authority driven decision is then communicated down the hierarchy and after much explanation, consensus building, and enrollment, some new action takes place. Unfortunately in the net-speed world, by the time you work the hierarchy; the world has passed you by. When confronted with this new reality the only option the hierarchical world has to offer is a re-organization. This means we re-arrange the power structure, which only slows things down as people take time to learn the way to work around the new structure.

The phenomenon of process has been with us for some time and its most recent iterations, Lean Manufacturing and Six Sigma are very useful, when you are doing the same thing over and over. Six Sigma or some process is great for making cars, getting out the payroll, handling invoices and other recurrent functions. It is not so useful in the rest of the organization. Why? Today's organizations are complex and are confronting new challenges that require flexibility and agility. In this real world standard processes are often too rigid. When confronted with something new or the need to change, the process-driven response is to find a way to fit the new opportunity or requirement into an existing process. However, as it is new, it likely won't fit well. Thus we bend and shape the opportunity to fit our process and in many cases this ends up minimizing the possibility. If that doesn't work, then we use the hierarchy to declare a new process and thus we get the double dose of dysfunction - we take a long time to build in a new rigidity when the world is calling for speed and agility. If you look at the current practice of management and those who consult with and about it, you will find the vast majority of the work is focused on tweaking these two traditions.

We We offer a new possibility. Instead of seeing work as a set of activities that need to be supervised, we see it as a set of nested commitments. Whenever someone says to someone else that they will produce a specific result by some specific point in time they have made a commitment. If you consider that every day thousands and thousands of these commitments are made and completed as the fundamental element of what we call work, then you can see that power derives from learning the practices of effectively and consistently making, fulfilling, managing, and tracking this network of commitments. This is the fundamental structure of Commitment Based Management. It is a radical departure from the management philosophy of today, and we claim, the key to the future for any company that intends to thrive in the new emerging world.

At its core, it is deceptively simple. Do what you say you are going to do when you say you'll do it. It is a simple, yet very powerful concept that is the foundation of a commitment based culture. At a deeper level it also means learning how to make the right requests, negotiate for resources, and knowing how to effectively set expectations and generate customer satisfaction. It means learning how to build and re-build trust, how to have the conversations with people who are not keeping their commitments, and a host of new skills for designing, declaring, managing, and reporting on projects. It then requires that we look with you at the compensation and rewards systems so that they are compatible with and supportive of the new practices and behaviors. When all this comes together in a seamless manner, productivity, quality, and effectiveness improve and relationships across the organization strengthen. Loyalty and trust become pervasive, projects get completed on time, and legacies are established.

Thinking strategically about the project, consistently generating innovations, and doing what you say you are going to do when you say you'll do it do not happen by handing down orders, or coming up with diagrams of processes. Instead they require the construction of a new culture in which people live the underlying values of accountability, trust and commitment, effective leadership and management skills, and deep commitment to a new way of working. When you pair this with powerful practices and tools for management you have the keys to a new future.

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Article Tags: business demands, business leaders, business schools, class culture, competence, current management, economic structure, financial measures, generators, global business, global economy, hierarchy, knowledge workers, management practices, management theory, new century, organizational barriers, tacit knowledge, variations, workforce



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