Six permanent functions. One theory.
Each keeps a different decision alive as reality changes.
The 6 functions express one theory across different domains. Each sustains, as a living representation, a decision that is never finished being made and enables the organization to reconsider it as a whole whenever reality changes.
FUNCTION
VERB
THE DECISION IT KEEPS ALIVE
Latent Growth
cultivate
where the firm can grow from the relationships, knowledge, and experience it already has
Capital Allocation
set against one another
where finite capital should go among competing claims
S&OP
synchronize
how a single promise is kept across 5 domains
Capital Projects
configure
how the parts of a physical system support one another
Execution on Decision Systems
keep valid
whether the decision remains valid throughout execution
Institutional Systems
constitute
who may decide, under what rules, and with what consequences—the institution that decides
S&OP synchronizes a promise across domains. Execution on Decision Systems keeps a decision valid through execution.
THE 6 FUNCTIONS
Six decisions that need to be kept alive.
Each function assumes responsibility for a different decision. Together, the 6 functions express one theory across different domains.
Latent Growth
Cultivate the growth already within the organization.
A mature company revisits growth in every cycle as its relationships, knowledge, and experience continue to change.
Capital Projects
Configure the physical system as an integrated whole.
A physical system, such as a plant or network, is an integrated structure whose elements support one another. Its configuration must be reconsidered whenever one component changes.
Capital Allocation
Set competing claims on the same capital against one another.
Where the next unit of capital goes must be reconsidered whenever the organization's capital base, market conditions, or priorities change.
Execution on Decision Systems
Keep the decision valid through execution.
A major decision begins with an intended course while external conditions continue to change. Without timely review, execution can drift before the organization detects the deviation.
S&OP
Synchronize a single promise across domains.
A company makes one promise to the market. Keeping it requires 5 domains to remain aligned: demand, capacity, supply, flow, and economics.
Institutional Systems
The decision-making authority does not always exist. Sometimes it must be constituted.
Before deciding what to do, an organization must resolve who may decide what, under what rules, and with what consequences.​
Start with a critical decision.
Identify the decision your organization needs to keep alive—and the function that can assume responsibility for it.