This is an important piece, so like the earlier 'How Not to Lead, it's broken into three parts.

Part one follows. Part two will be sent out in the next 10 days roughly. And the final part towards the end of next month.

Take your time, pour a cup of coffee, tea, mineral water, whatever. Take a few minutes and let's explore how to re-invent ourselves by first forming and then transforming our defining commitments.

TAKING A STAND

Some years ago, Donald Sull wrote a seminal article for The Harvard Business Review on the power of what he called transforming commitments.

Building on his insight, it seems clear to me that the commitments we make, the ones that we let define us, those that blinker and inhibit us, as well as those that embolden and re-invent us, are a centerpiece of living leadership.

THE NATURE OF COMMITMENTS

What we mean by commitments in this sense are those decisions that influence our behaviour not only today, but which will mandate the way we will behave in the future as well.

So if airplanes are designed to serve food, that's a commitment to a service offering that influences all kinds of future positioning and choices. If car makers place their bets on large expensive cars and get out of the business of producing compact cars with fuel efficiency, then the future choices (and sometimes the fortunes) say of GM versus those of Toyota and Honda are almost codified in that very commitment.

Mind you when these bets turn out to be correct, when a company correctly senses a future trend or evolving reality, then these commitments seem less like obstinacy and far more like inspired insight. Otherwise these are the 'paradigm prisons' we all cluck our tongues over with that infernally accurate 20/20 hindsight.

So when Microsoft commits to a ubiquitous operating system, or IBM to integrated solutions, or GE to capital services, Virgin Atlantic to a 'First Class' Business Class, or Coke and Pepsi to branding over manufacturing, these commitments establish a future trajectory, they bring to life tomorrow's behaviours as we've said, not just today's.

HOW TO MAKE COMMITMENTS

Companies make commitments that define them, in Sull's terms, when they take action in one or more of the following ways:

1. Focused mental frames. These are worldviews that underwrite where money goes, what you measure within a company (the high priority success metrics), and therefore what everyone's priorities are.

   Firestone and Goodyear flourished in the US over a then-established giant like US Rubber, because they defined their area of focus as rubber tires. They correctly intuited that the burgeoning demand for automobiles and the building of highways would reward this specificity, rather than being generically into rubber products.

   IBM's move towards integrated solutions for businesses redefined their prevailing paradigm away from computers. Their shift to consulting is a further move in this direction.

   Almost every transnational in the world is banking on China as a large part of their future growth. The largest future middle class in the history of the world beckons...as long as China stays economically progressive and politically stable. Hence corporate strategies today, both overall, as well as for key products and categories are highly China-centric.

2. Allocation of core resources. This is the second indication of key commitments. A reduction of factories to a few manufacturing hubs. Primary expansion commitments in China or India for future growth. A massive R&D commitment in one category of product.

   Re China in particular, as mentioned above, we can see this most clearly. Resources are moving into that market, with opening of offices, plants, establishing of joint ventures, and massive commitment of attention, resource and time.

   The more specialised the resource (ie. cannot be easily reallocated, for example an investment in Indian call centers as the 'back office' of your operation), the more durable (likely to last, a new plant or facility, a sharp reduction of HQ personnel and closing of less profitable offices), the more powerful a message it sends as a transforming commitment.

3. Enshrining key processes and making them critical to our way of doing work is another form of commitment. Amazon's user friendly website, its patented 1-click check-out process, it's customized suggestions each time you visit, these are unique processes that pledge a certain way of doing business. They are part of what we associate with what Amazon is.

   The limos to pick us up at either end of a Virgin flight, the avant-garde lounges, the personable and chatty staff, the massages, the stand-up bar, the 'edge' of the advertising and the amenities, are all process and service distinctions that underwrite key aspects of Virgin's identity.

   The way coffees are ordered, made, flavoured, sized and served up is intrinsic to how Starbucks does business, and has created an entire generation of people who play the game the Starbuck's way to be a part of the experience and have this specialized beverage and quasi-cafe experience.

   Once such processes and service distinctions get associated with your brand, you are largely committed, and it takes massive effort to re-invent in this regard, and we need to tamper with them carefully and very purposefully.

   For over 100 years, the senior team of the Royal Bank of Scotland meet at 0830. If you're travelling, you call in. If everyone is away, there is a teleconference. However, the meeting takes place. This is an example of a core internal process that also makes a commitment to a certain type of organisation, a certain type of communication and a certain type of team.

4. Key relationships. Relationships with customers, relationships with suppliers, partners, alllies, etc.

   We commit when we make an investment in a new market, anchored in key relationships. We commit by merging, or acquiring, or deciding who to ally with, by deciding how much to outsource and how to much to keep inhouse.

   From earlier days, we have the example of Firestone and Ford (due to relationships built by Harvey Firestone and Henry Ford). Microsoft and Intel come to mind in this regard more recently. Singapore Airlines acquiring a decisive stake in Virgin Atlantic is another example. Less happily, at least as of this writing, HP/Compaq or DaimlerChrysler show us how dangerous such commitments can be unless undertaken with both exquisite discernment and acute ongoing attention to critical success factors.

   Mergers often don't work because we don't realise we ARE making a transforming commitment not just extending our markets or assets. Such commitments are adaptive acts and require more than signatures and surface handshakes. These mergers often founder because of the inherited culture created by the earlier commitments of the respective firms. Those commitments have to be understood, appreciated -- then challenged, ventilated, and recreated.

   Redefining relationships also redefines possibility. When Walmart and Tesco agree to become the purveyors of consumer behaviour and stock levels to their suppliers, then they can get 'just in time' delivery, and their suppliers can manage inventory, and production runs and overall scheduling. A powerful new partnership is forged.

   Commitments made through relationships tend to be made by enhancing one or more parts of the overall value chain for your business.

5. Values in action. Not puffy nostrums padding corporate suites, nor pompous utterances dispiriting team-members everywhere. I'm referring here to what a company values most (not its ethics). What we value is evident when sponsoring actions are consistent over time and very palpable when it comes to key decisions or the setting of priorities.

Such 'values', often underwritten by our processes and service offerings as described above, radiate from all aspects of a company. Laura Ashley's traditionalism, Disney's attempt to be synonymous with family fun, Prada being evocative of cutting-edge choice, or Hennessy XO seeking to exemplify the rich taste of mature success.

We can think of Johnson&Johnson's Credo that has determined J&J's commitment to the welfare of its customers and people, and the reciprocal trust invested in it by the public. We can look at 3M's famous commitment to innovation and how that has been the final dashboard for both its years of success and relative stagnation. We can look at the Ritz-Carlton's Gold Standard for an expression of service values that enrolls people in a quasi-crusade not just a job. We can look at GE's meritocratic differentiation of leaders as a hallmark of why it has become the corporate world's premier leadership factory (more CEO's of Fortune 500 companies are alumni of GE than they are of the Harvard Business School).

While a company that has no core commitments, no forming commitments, will be unlikely to ever succeed, commitments of this type once entered into become a double-edged sword. Like ruts cut into the ground, each day we follow the path of these commitments, the grooves get easier to follow almost automatically, and dare we say it, possibly mindlessly as well.

When Michelin introduced radial tires, Firestone watched Michelin's rising prominence in Europe, but refused to abandon their old, technologically inferior tires (radial tires lasted twice as long, had to therefore be replaced half as often, and necessitated therefore fewer plants). They tried PR campaigns first. These initially boosted sales, however this didn't last as customers discovered these were the same old tires with incremental adaptations (a pig with lipstick so to speak). They then flirted with radials, but still continued to produce their old tires, multiplying costs, and leeching focused creativity.

When plants had to be closed, Firestone wouldn't due to their 'family values'. Eventually, Firestone was acquired by the Japanese company, Bridgestone. Goodyear on the other hand, did shift to radials, took the necessary medicine, and redefined their bullseye as worldwide radial leadership.

IBM was foundering having refused to shift away from mainframes. It has since, under the exceptional leadership of Lou Gerstner and his successor, managed to make fresh, genuinely transformational choices that have returned it to profitability as well as to IT leadership in selected areas of excellence.

So, what's needed? In part two we'll look at the avoidance trap, how to assess if our own company may be held back by archaic or at least currently suboptimal commitments from the past. Finally, in part three, we'll explore how to make new commitments, how to make them stick, and how to lead ourselves and our companies into a powerful, productive and profitable future.

For now, let's just define the key commitments that define us. Ask your fellow leaders. Ask key team members. Talk to customers and suppliers. Look at the key 'default positions' we take. Review the pattern of strategic choices. Making these commitments conscious is very much the first step. In another context Carl Jung, the pathbreaking psychotherapist said something that perfectly applies here: 'We cannot change anything until we can first admit it.'

Let's gear up to admit what we're committed to. And where we can do better, let's gear up to change it. It's one of our primary responsibilities as leaders.

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