Recently, I Revisited An Unusual Management Technique – The Blank Check Theory. The Theory Inspires Managers To Pursue Audacious Goals Without Worrying About Budgets.
The Thought Is Simple. Managers And Leaders Are Taught To Work Within Limited Available Resources. Budgets Restrict Creativity And Imagination Of Managers – As Everyone Is Always Making Trade-Offs. What If Resources Were Unlimited? What If Managers Were Free To Dream Big And Act Without Worrying About Budgets?
The Blank Check Theory Believes That When Teams Work With Blank Check, They Deliver Outstanding Results. The Are Accountable For Results But They Decide Their Budgets. They Are More Inspired And Act With More Ownership.
The Concept Of The Blank Check Was Floated By Sanjay Khosla, Kraft’s President Of Developing Markets, And Mohanbir Sawhney, A Professor At The Kellogg School Of Management At Northwestern University, Writing In Strategy & Business Magazine. They Shared Multiple Examples Of How Blank Check Allowed Teams To Envision And Achieve Breakthrough Results.
For Instance In 2007 Tang, The Old Powdered Breakfast Drink, Was Doing Poorly Around The World, So Executives At Kraft Gave People In Charge Of The Brand In Various Countries A ‘Blank Check,’ Essentially Urging Them To Dream Big And Not Worry About Resources. The Results Were Astounding. In The Five Years, Tang Doubled Sales Outside The U.S.
Kraft Applied The Same Theory In Mexico And Got Amazing Results. Kraft Gave Its Cadbury Brand In India A “Blank Check,” And The Innovations There Included Doubling The Use Of Store Display Cases That Both Presented The Chocolate Attractively And Kept It From Melting; Greatly Increasing The Advertising Budget; And Marketing The Product With A New Focus On The Indian Tradition Of Having Sweets At Important Social Moments. The Result: Record Revenues.
The Blank Check Teams Are Held Strictly Accountable For Quantifiable Results. They Have Freedom To Act But Within The Set Of Ground Rules To Ensure The Initiatives Stay On Strategy And Produce Results.
There Are Five Rules To Make The Blank Check Theory Work:
1. Pick The Best Bets – Carefully Figure Out What Part Of The Business To Target, Looking For An Area With Past Success But Definite Room For Real Growth.
2. Select The Team – Pick The Team To Bet On, Looking For People Who Are Naturally Accountable For The Business Area But Who Also Show Great Potential.
3. Define Goals And Plans – Define The Goals And Plans, Setting Clear, Measurable Targets And Quickly Getting A Basic Proposal From The Team, Not More Than Two Pages Long.
4. Kickoff The Initiative – Write The Blank Check, So That The Team Really Knows It Is Authorized To Proceed And Can Do Whatever It Needs To Do.
5. Monitor Results – Monitor The Results, Setting Milestones With Clear Metrics, And Of Course Expecting A Certain Amount Of Failure Along The Way.
The Typical First Reaction To A Blank Cheque Challenge Is Skepticism. People In Corporate Settings Have Been Trained To Think In Terms Of Budgets And Belt Tightening.
Khosla And Sawhney Feel They’ve Proven That The “Blank Check” Can Make Great Things Happen. They Conclude:
Even Seemingly Sleepy Businesses Hold Tremendous Untapped Potential. If Business Leaders Can Liberate Their People From The Limitations Of Budgets And Resources, They Will Find That Their People Will Surprise Both Leaders And Themselves With What They Can Achieve. This Is The Power Of Blank Checks.
