Page 99 - The Resilient Organization

86 Part Three: Step 2. Building Resilience into the Organization

Stranger things happen in the corporate world. In our research of
commitments entered into incrementally, my colleague Armi Temmes at
the Helsinki School of Economics and I have found multiple examples
of strategic binds, lock-in situations, or path dependencies that are
unforeseen outcomes of decision streams. Sometimes companies end up
stuck, like a Finnish design company that was at the mercy of a monop-
sony (only one customer) in its biggest foreign market having commit-
ted to an exclusive representation; sometimes companies get lucky as in
the case of Honda’s well-known entry into the U.S. car market (Pascale,
1984). No matter the ending—unfortunate or fortuitous—both the
design company and Honda exhibited incremental strategic choices
made without the full appreciation for the consequences (Mintzberg &
Waters, 1985). We call this phenomenon commitment creep: a no-
return situation created through cumulative decisions, often by multiple
organizational actors. Such commitment creep typically emerges from
the company’s leadership, but it can occasionally be used deliberately to
create a certain desired outcome.
Such an example of the deliberate use of commitment creep is
reported by Bower and Gilbert (2007): a corporate division had man-
aged to build an entire plant without requests for capital expenditure by
breaking the work orders into small enough portions to escape corpo-
rate control. But the chimney was too large to be built under radar; thus
a request for a capital project proposal was put in. By the time the con-
troller received the chimney request, the entire plant (minus the chim-
ney) was already there. What was there to do but to grant permission
for the chimney, hoping that the plant would be a good investment
(which it evidently turned out to be)?

Explanations of Commitment Creep

The phenomenon of commitment creep is not by any means absent from
the literature of strategic management. There are a number of theory per-
spectives that speak to it in some way (see Table 6.1 for a summary). The
desire to appear consistent as a leader may perpetuate a course of action