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Published: November 24, 2009
 / Winter 2009 / Issue 57

 
 

Fernando Flores Wants to Make You an Offer

Appearing 20 years before Facebook, MySpace, and Twitter, the Coordinator was one of the world’s first social networking software applications. It received critical acclaim, but it was large and power hungry, and initially ran only on computer workstations from Sun Microsystems, which were much too expensive for broad deployment. Still, Action Technologies acquired a small but loyal customer base, and the company survives as a producer of business process management software.

Separately, Flores launched and ran Logonet, a small management training school offering an “ontological design course” for business professionals, who spent three years going through the program part-time. Over a period of 10 years, the program produced about 2,000 graduates. Many went on to start their own successful consulting firms, primarily in executive coaching. Some return to Flores’s workshops year after year.

Flores gradually reduced his role in Action Technologies, though he still owns a small stake in the company. Although Logonet’s revenues helped put his five children through the University of California, he says his greatest financial reward and the best expression of his ideas came from a third venture — a consulting firm, Business Design Associates (BDA), which peaked in 2000 at about US$50 million a year in billings, with 150 employees and a substantial presence in the U.S., Europe, and Latin America, including back in Chile.

“We were [consulting] in some of the biggest companies in the world, we priced our work at a premium, and we were successful, but we had certain problems,” Flores says. “It was demanding work for us and for the client. Normally people called us only when there was a big mess.”

BDA worked on projects as varied as logistics efficiency and credit card fraud, always with a method based on five basic speech acts: declaring, offering (and accepting offers), making requests and promises, asserting, and assessing. Flores’s teams would typically begin by training people to make explicit requests and to ask for explicit promises to perform the requested act.

For example, when asked to complete a report, an appropriate response would be, “I promise to deliver it by Friday,” not, “I’ll get right to it.” With this phrasing, the person who makes the promise chooses and stands behind a clear commitment that didn’t exist before. Flores argues that the obligations people create for themselves are stronger and more psychologically binding than the directions they are given by someone else.

“I ask companies to list their top 10 promises, how many will be fulfilled, and how many will be fulfilled on time,” says Charles Spinosa, a former BDA executive who is now group director of Vision Consulting, a Dublin-based firm that acquired limited rights to Flores’s intellectual property. “In the best companies in the world, they say about 60 percent will be fulfilled. In normal companies, it’s around 30 percent. I’d say, just imagine how your company will be affected if you raise that 20 percentage points. That’s the simplest way I know of showing the commercial potential of what Fernando invented.”

Flores teaches that offers are conditional promises; they can be used to build new relationships within a company or other group. He defines a business as “a network that allows us to make offers.” He also distinguishes assertions from assessments. Someone might assert that “John is flaky,” but an assessment is, by nature, a more reliable description of reality, since it is based solidly on observation: “John has missed his last three client calls.” Because most businesspeople are unaccustomed to making and receiving face-to-face assessments (relying instead on occasional 360-degree appraisals peppered with anonymous feedback), Flores provides a script. In organizations accustomed to what he calls the “cordial hypocrisy” of corporate life, this approach to assessment is transformative in itself. It replaces misunderstandings and resentment with trust, and it measurably improves team performance.

 
 
 
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Resources

  1. Chalmers Brothers, Language and the Pursuit of Happiness (New Possibilities Press, 2004): An accessible guide to using speech acts in the workplace and elsewhere.
  2. Lawrence M. Fisher, “The Ambassador from the Next Economy,” s+b, Autumn 2006: A Creative Mind profile of Joichi Ito, the Japanese “venture activist” who sees World of Warcraft as a model of organizational design.
  3. Humberto R. Maturana and Francisco J. Varela, The Tree of Knowledge: The Biological Roots of Human Understanding (Shambhala, 1987): Underlying Flores’s work, and that of many others, is an emerging understanding of cognition as evolutionary and behavior as plastic.
  4. John R. Searle, Expression and Meaning: Studies in the Theory of Speech Acts (Cambridge University Press, 2008): Scholarly, seminal essays representing 40 years of research and insight.
  5. Robert C. Solomon and Fernando Flores, Building Trust: In Business, Politics, Relationships, and Life (Oxford University Press, 2001): Flores’s most recent book, coauthored with philosopher Robert Solomon, on the role of trust in modern society.
  6. Charles Spinosa, Fernando Flores, and Hubert L. Dreyfus, Disclosing New Worlds: Entrepreneurship, Democratic Action, and the Cultivation of Solidarity (MIT Press, 1997): Guide for cultivating strategies and skills to be a more effective participant in larger systems, like businesses and societies.
  7. Abriendo Juego, Abriendo Mundos, www.fernandoflores.cl/: Fernando Flores’s blog, posted entirely in Spanish.
  8. For more thought leaders, see the s+b website at: www.strategy-business.com/thought_leaders.
 
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