Donald Sull’s Why Good Companies Go Bad And How Great Managers Remake Themrepresents a clear and actionable examination of the core of successful business – the making, managing and delivering commitments. The idea of commitment what they are, how they are made, how they work and how they can be used to transform the enterprise.
Sull explains that if you want to understand the health of a company you need to look at the nature of their commitments. Sull points out that there are three types of commitments:
- Defining commitments are set by the founders and establish
- Reinforcing commitments are ongoing commitments that tend to strengthen the existing organization.
- Transforming commitments are those made to change the organization, often in response to changes that turn prior commitments into core rigidities that Sull calls ‘active inertia’?
The book is a detailed examination of the commitment process, terminology and approaches. Sull defines commitments in terms of a framework he calls the company’s success formula. It consists of:
- Frames – that describe how the organization sees the competitive landscape
- Resources – what you own that helps you compete
- Values – what you believe that inspires, unifies and identifies your organization
- Processes – how you do things
- Relationships – the enduring links with external stakeholders and within units in your organization.
An organization exists, changes and evolves based on commitments made against the ingredients in the company’s success formula. The book’s chapters go into explain these components and then go onto cover subjects including choosing the right commitments, who is the best person to make the commitments, how you give commitments traction and the failure modes related to commitments.
Overall, the book is recommended for executives and managers who are looking for a clear, concise and actionable way to move their organizations forward one commitment at a time.
- The idea of examining commitments is a novel one that seems obvious but for some reason has been overlooked. Commitments are so essential to a functioning organization that they need to be part of any organizational diagnosis or capability assessment.
- The frameworks are clear and well delineated. Rather than creating numerous variations and nuances in either the success formula or commitment types, Sull does the extra work to create easily understandable concepts.
- The concepts are backed by case examples, although some of them are rather old as he book
- The advice is actionable at any level of the organization. Sull points out that everyone makes commitments and therefore its possible to apply your understanding of commitments no matter where you are in the organization.
- The book was published in 2003 so these ideas have been around for some time. This does not mean that the advice is old – in fact it is more relevant than ever. But the case examples are very long in the tooth. This can lead some readers to discount the advice.
- Some will see the issue of commitments as one of company culture, particularly the defining commitments. The two are related but where as people talk about culture as being difficult to change, commitments are the way you change culture.
Overall recommended as a way to give you a refresher on one of the fundamentals o management.