Can Promise-Based Management fix a Broken Building Industry | Murray Guy

The article Promise-Based Management: The Essence of Execution:  addresses one of the fundamental issues "lack of commitment" that is inherent in a very traditional building industry. An industry that is failing miserably in getting projects completed on time and to budget.  An industry that fails in delivering value for the customer.  An industry that wastes $500 Billion dollars annually due to poor productivity and bad behavior.

The following is a summary of how the important principles of Promises and Commitment apply to the Lean Construction Industry.

Why we have a Problem?

The building industry is declining in productivity as companies work in silos and do not make and keep the commitments needed to get productive work flow.

 Execution fails for a variety of depressingly familiar reasons: 

• Companies disengage because they don’t buy in to the project priorities; they become dissatisfied and unproductive.  
• Companies operate in silos that hinder the coordination necessary to effectively manage work
• Organizational structures obscure accountability for projects and initiatives.

Improperly executed plans can mostly be contributed to broken or poorly crafted commitments. 

How do we Fix our Projects?

Project Managers must fundamentally rethink how work gets done. Specifically, they must acknowledge that a company is more than a bundle of processes or a set of boxes and lines on an org chart. 

At its heart, every company is a dynamic network of promises. Employees up and down the corporate hierarchy make pledges to one another—the typical management by objectives. Employees also make commitments to colleagues in other divisions and to customers, outsourcing partners, and other stakeholders. 

Promises are the strands that weave together coordinated activity in organizations.

We can foster productive, reliable work by practicing what we call “promise-based management”: cultivating and coordinating commitments in a systematic way.

Why Promises, and Why Now?

Promise-based management builds on a tradition that extends back at least to the emergence of contract law in the Roman Empire. It draws on the tenets of speech act theory, a branch of linguistic philosophy that explores how people commit themselves to action through assertions, questions, requests, promises, declarations, and other speech acts. 

Well-made promises can help bridge the gap between such individuals, who may be literally and figuratively miles apart. The dialogues that are central to promise-based management allow people from disparate backgrounds to achieve a common understanding of what needs to be done. 

Promises also foster a mutual sense of personal obligation to deliver the goods.

Conversations for Commitment

A promise is a pledge a provider makes to satisfy the concerns of a customer within or outside an organization. More important than the actual content of a promise, however, are the discussions that give it life. Both sides must explicitly thrash out what the customer wants and why, how the provider would go about satisfying the request, and any constraints or competing priorities that could derail fulfillment of the promise.

The Five Characteristics of a Good Promise

In more than a decade of research on commitments, we’ve asked hundreds of managers to evaluate the quality of promises made within their organizations. We’ve asked them what percentage of all commitments made to them they could actually rely on. The typical response is about 50%.  We’ve found that well-made promises share the following five characteristics.

1. Good promises are public. Promises that are made, monitored, and completed in public are more binding—and therefore more desirable—than side deals hammered out in private.  
2. Good promises are active. Negotiating a commitment should an active, collaborative process. Active conversations should comprise offers, counteroffers, commitments, and refusals rather than endless assertions about the state of nature.  Conversations should comprise offers, counteroffers, commitments, and refusals rather than endless assertions about the state of nature.
3. Good promises are voluntary.The most effective promises are not coerced; they are voluntary. The provider has viable options for saying something other than yes. Contracts signed under duress are not binding in a court of law. 
4. Good promises are explicit. Customers and providers should clearly acknowledge who will do what for whom and by when. The customer and the provider must be explicit about their promise throughout its life cycle. Requests must be clear from the start, progress reports should accurately reflect how the promise is being executed, and success (or failure) should be outlined in detail at the time of delivery rather than after the fact.  
5. Good promises are mission based.  The most effective promises are mission based—that is, the customer explains the rationale for the request and invests time to ensure that the provider understands the mission.   When providers understand why their promise matters, they are more likely to persist in executing even when they encounter conflicting demands and unforeseen roadblocks. 

Promises are the fundamental units of interaction in businesses. They coordinate organizational activity and stoke the passions of employees, customers, suppliers, and other stakeholders. While they hold an organization together, they are as fragile as they are crucial. Leaders must therefore weave and manage their webs of promises with great care—encouraging iterative conversation to make sure commitments are fulfilled reliably. If they do, they can enhance coordination and cooperation among colleagues, build the agility required to seize new business opportunities, and tap employees’ entrepreneurial energies. If they don’t, they will lose out to rivals who do.

A version of this article appeared in the April 2007 issue of Harvard Business Review.

Working to create a more Sustainable Building Industry!
Murray Guy @Lean_tobe_Green
Learn: LEAN LAB. … Design: Integrated Designs … Build: EcoSmart
For inquires: Mguy@i-designs.ca or 306.934.6818


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