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Executive Interviews: Interview with Donald N Sull on Why Good Companies Go Bad
January 2007
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By Dr. Nagendra V Chowdary
Donald N Sull Associate Professor for Management Practice at the London Business School 
In one of your brilliantly written
articles (Do Your Commitments
Match Your Convictions, HBR,
January 2005), you have observed
that for most people, it takes a crisis
illness, divorce, death of a loved
one, business failure before we will
refocus our commitments of money,
time, and energy on what really matters
to us. But why wait for a crisis?
First, to be clear, I did not argue that
people should wait for a crisis, but
merely observed that they often do.Crises make itmuch easier they create
a break in the day to day routine,
jolt us into rethinking our existing
commitments, and provide a ready
excuse for explaining to others why
we might change what we are doing.It is much
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more productive, however,
to build in periodic occasions to revise
your current commitments and
rethink whether they are still aligned
with what matters most to you. It is
impossible to rethink everything on a
daily basis, but equally dangerous to
simply forge forward without periodically
pausing to step back, reassess
the situation, and check that you
are on the right path.
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One of the often quoted strengths
in any resume is, I am a committed
worker. What according to you is
commitment?What does it take to be
a committed worker? Is such behavior
shaped by individuals value system
or is it also shaped equally by
organizational philosophies?
Typically when people say they are
committed workers, they mean that
they are committed specifically to the
organization, its goals, values, and
way of proceeding. This commitment
is critical, because it allows workers
to persist when inevitable obstacles
arise, and stick with the company
even in the face of tempting offers
from outside. Two things are critical
for this type of commitment. First, the
individual must be willing to commit
to any organization. Many people
view themselves as free agents who
work for an organization for a period
of time, but are always looking for a
better option. This is not necessarily
a bad thing, but it does make it hard
for organizations to get themost out of
people. The second requirement is
that the organization provide something
worth committing to. Most
people cannot commit equally to any
organization be it Mittal Steel,
Aravind Eye Clinic or the Civil Service.
Rather they commit to an organization
that is aligned with their
own aspirations and values. Here it
is incumbent for the leaders to first of
all ensure that their organization
stands for something that attracts potential
and current employees. The
values that might work are varied,
and include not only serving others,
but quality, innovation, winning globally,
creativity and others. Leaders of
organizations must also do a good job
of communicating what it stands for,
and ensuring that they maintain the
integrity of those values as the organization
grows. -
What about convictions? What
shapes the conviction attitudes of
employees? Can an effective leader/
organization presuppose any change
in the conviction attitudes of employees?
It is difficult to change peoples underlying
convictions. People are motivated
by a variety of drives to
achieve, to win, to serve, to affiliate
with others, to acquire, to exercise
power, to learn and research suggests
these are fairly hard wired into
our brains. The best system, it seems
to me, provides a variety of organizations
which stand for different things,
such as investment banks that focus
on making money, universities that
focus on pushing the frontier of
knowledge, health care organizations
that serve others, etc. The labor market
then serves to match people with
the organizations that bestmatch their
convictions. Often times this system
fails, however. Partially it is because
organizations tend to converge on a
single model and drive out variety. In
the US right now, for instance, many
universities, schools and health care
providers are mimicking the norms of
for profit businesses, a model which
does not always attract people who
chose those professions to serve.
Also, managers often fail to take a
stand to what their organization
stands for, and to stick to those core
convictions when the going gets
tough. Over the past decade I have
studied several companies that have
risen to global leadership in their industries
fromemerging markets, companies
including Samsung Electronics,
Mittal Steel, Turkish bank
Garanti, AmBev (the Brazilian brewer
which recently acquired Anheuser
Busch), Mexican cement maker
CEMEX, and Chinas Haier among
others. In every case, leaders in these
companies articulated a strong set of
values, and stuck to them as the organization
grew larger and expanded its
reach globally.
1.
The Good, the Bad and the Ugly Case Study
2. ICMR
Case Collection
3.
Case Study Volumes
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