Operating Commitments: The Foundation of Your Functional Culture

By Joe Newsum

I love creating operating commitments with leaders at every level, because the work forces real clarity and elevates the culture of the team at the same time: what is actually important here, how do I tell the story of my team, department, or function so people know what they need to commit to, and what kind of culture do we need to win?

First, a quick orientation. Operating commitments are the third level of the commitment architecture: below your True North and the core commitments everyone shares, and above the activity commitments that make culture concrete. They are the vertical layer, and they reside at every altitude: your team has its own operating commitments, your department has its own, and your function has its own, the same construct nested at three levels.

A story from one of my clients drives home what operating commitments are and how powerful they can be.

One of my clients runs a ten-thousand-person insurance claims organization, and he is unbelievable at driving a culture of focus, execution, and excellence with two sets of three words. I hear him say it at town halls, in one-on-ones, in executive meetings, always the same way: “In claims, we only do three things. We investigate, evaluate, and negotiate. And we do them with accuracy, speed, and compliance, and the order really matters.” That is it. Two sets of three words that tell ten thousand people what their work is and what good looks like.

And he sees his entire job as making sure that is what those ten thousand claims professionals stay focused on, reducing their administrative burden, and driving the communication, the analytics, and the platforms that push accuracy, speed, and compliance. The simplicity of how he frames what claims does and what they focus on is such an elegant forcing function. It drives decisions, activities, investments, all of it. When accuracy and speed collide, everyone already knows accuracy wins, because the order really matters. No meeting, no escalation, no guessing. That is the power of an operating commitment, and that is the work I love helping leaders do.

This is why operating commitments work the way they do. They are the simple, shared language that drives shared thinking, getting everyone on the same page about what is important, what good looks like, and how we need to work together. That is the whole engine of culture: language shapes thinking, and thinking shapes behavior. Distill the work into a few shared words and a whole team starts thinking the same way about what matters, which is what turns a group of individuals into one focused, aligned function.

Here is a second one, because the reframing move is worth seeing. Another client runs the purchasing department for a large distributor, and he was struggling to help his team prioritize and crystallize what their real goal was. In the end, his team was accountable for three metrics: fill rate, the rate at which orders were fulfilled; inventory turns; and the ratio of administrative cost to inventory cost. Cold numbers. So we reframed them into commitments his team could believe in. Fill rate became we keep our promise to our customers. Inventory turns became we are the financial stewards of the majority of the company’s capital. And the cost ratio became we do it as efficiently and effectively as possible. Same three metrics, now three commitments with meaning, and a team that suddenly knew exactly what it was for.

The Cost of Never Distilling

That claims leader is rare, and that is exactly the point. Here is what happens in most organizations. A function has a strategy somewhere, a deck from last year’s offsite. It has metrics, dozens of them, scattered across dashboards. It has ways of working, mostly unwritten and assumed. None of it has been distilled. Nothing has been cut down to the few things that truly matter. And so the people doing the work are left to guess. They guess at priorities. They guess at how to make tradeoffs. They guess at what good looks like. Multiply that guessing across everyone in the function, every day, and you have an enormous, invisible drag on performance.

If you lead anything, a team, a department, a whole function, you already have strategies, metrics, and ways of working. The real question is whether you have done the hard work of distilling them. The problem is almost never that a team has no strategy or no metrics. The problem is that it has too much, and too little focus. Distillation is the missing discipline. And distillation is hard, which is exactly why most leaders skip it and why the few who do it stand out so sharply.

If you asked five people on your team what the three most important things they do are, and what good looks like for each, would you get the same answer five times? If not, you do not yet have operating commitments.

Where Operating Commitments Reside: Team, Department, Function

Operating commitments reside at every level of the organization. Your function has a set. The departments inside it each have their own. The teams inside those have theirs. The construct is identical at every altitude, what we do, what good looks like, how we work, and each level nests inside the one above, getting sharper and more focused as you go down. The claims organization’s investigate, evaluate, negotiate frames the whole ten-thousand-person function; a department inside it answers the same three questions for its slice of the work; a frontline team answers them at the most focused altitude of all.

The construct scales in both directions, and only the altitude changes. In fact, a small team often finds it easier, because its work is more focused to begin with. Wherever you sit, if you lead a group of people doing work together, you can distill operating commitments for it. You do not need to wait for your function to go first.

What to Distill: The Three Dimensions

A complete set of operating commitments answers three questions about a team, department, or function. Each is an act of distillation, taking everything that is true and cutting it to what matters most.

Some teams add a fourth dimension, who we are, the identity and role language of the people doing the work. It is optional, but for some functions a strong shared identity is part of what makes the work great.

Operating Commitments Build the Culture Your Function Needs

Here is the part most leaders miss. You already have a functional culture, whether you chose it or not. It forms on its own, through what you model every day, who you hire, the metrics you track, and the strategy you set. Salespeople naturally create a bit of a sales culture. Finance people create a finance culture. Engineers create an engineering culture. And the numbers you measure and the direction you point people quietly shape how they think and behave just as much. It all happens by default, which means your functional culture is only as good as whatever it happened to drift into, and it is uneven, implicit, and understood differently by everyone on the team.

Walk the halls of one company and you cross several distinct cultures in a single afternoon. Each one needs a different way of working to win, and each one feels different because it should:

Operating commitments take it to the next level. When you make that culture explicit and inspiring through clear, focused language, you turbocharge what was already forming. You make conscious and shared what used to be accidental and uneven. The finance team that needs precision says so, out loud, and means it. The sales team that needs to be competitive and customer-obsessed names it and rallies around it. The operations team that lives on reliability and continuous improvement commits to it together. The culture stops being a byproduct of personalities and starts being a deliberate strength you built on purpose.

And here is the freeing part: there is only upside in being clear, concise, and focused about the culture your function needs. No team was ever hurt by knowing exactly what it does, what good looks like, and how it needs to work to win. The only question is whether you leave your functional culture to chance or build the one you actually need.

Your team already has a culture. Did you choose it, or did it just happen? Operating commitments are how you choose it.

The Hardest Part: The Right Level of Specificity

The craft of operating commitments lives almost entirely in one place: the level of specificity. Get it wrong in either direction and the commitment fails. Too vague, and you get a platitude that focuses no one. We deliver value. We delight customers. True, and useless, because they do not change a single decision. Too granular, and you get a job description nobody remembers, a forty-item process map that no one can hold in their head and that therefore changes nothing either.

The art is the altitude in between: specific enough to genuinely focus people and drive daily decisions, general enough to be remembered and to travel across the whole team. Investigate, evaluate, negotiate sits at exactly that altitude. So does respect the patient’s time. Finding that altitude for your team is the hard, valuable work, and it is rarely done on the first try. It takes drafting, testing against real situations, and cutting, again and again, until the language is both true and sharp.

Look at how your team describes its work and its goals today. Is it a platitude, a phone book, or something at the altitude that actually focuses people? Most teams live at one of the first two.

Every Team’s Operating Commitments Are Different

This is the heart of it: operating commitments are unique to every team, department, and function, because every group does different work, measures different things, and needs a different way of working to win. A claims organization, a purchasing department, a dental practice, and a software firm could not have more different operating commitments, and that is exactly the point. The construct is universal, but the answer is always specific to you.

You can see what vertical means in the Culture Matrix. Every function is its own column, doing its own work with its own definition of winning. Core and activity commitments run across the rows, the shared way everyone works. Operating commitments run down your column: what your function does, what good looks like, and how it needs to work.

Here are two more examples I have worked on, each a different kind of business with a different challenge, to show just how differently this plays out.

Two very different businesses, a dental roll-up and a software firm, and the same underlying move in both: take everything the organization does and distill it into a few commitments, what we do, what good looks like, how we work, at a level of specificity that focuses people and drives both performance and culture. That is operating commitments, and almost every team on earth would be better with them than without.

How to Build Your Operating Commitments

The work is straightforward to describe and hard to do well. Here is the path.

Operating commitments make each part of the organization sharp at its own work, on top of the True North that drives every decision and the core commitments everyone shares. The last level of the architecture makes it all concrete in the recurring activities where culture actually lives. Read next: Activity Commitments.