The Ten Characteristics of an Accountable Business

In a well-managed and well-led organization, a culture of accountability permeates the business. Each individual, each team, each profit center, each division is responsible for their success.

Businesses Lacking Accountability

It is easy to spot organizations where accountability is lacking.

  1. Promises and commitments are not kept
    1. Phone calls and E-Mails are not responded to
    2. Deadlines are not kept
    3. Endless meetings that are endlessly long end with nothing resolved and nothing committed to

     

  2. CYA, blame and finger pointing are pervasive
    1. “I did my part. But they did not.”
    2. “It’s not my job.”

     

  3. Excuses abound
    1. “Our company did not perform because of the economy, because of the weather, because of government regulation, because of…”
    2. “I did not make my sales numbers because our competitors are stupid and giving it away, because the market stinks, because our prices are too high, because I do not have enough resources, because…”

     

  4. Non-performance is tolerated, especially at the senior level
    1. As an anecdote, in one company I have worked with, one senior leader had not made his numbers in 10 out of the last 11 years, but still continued in his role.
    2. Non-performers may even be promoted due to “having the right skill set,” friendship, nepotism, etc.

     

  5. Denial
    1. “It is not my fault.”
    2. Passing the buck
    3. “But, I did not know what to do. I was never told.”

     

  6. Risk-taking diminishes
    1. It is better and safer to be conventionally wrong than to be unconventionally right.
    2. Inertia and inaction take over as everyone “waits and sees” what will happen next instead of taking the initiative

 

Business Embracing Accountability

  1. Accountability starts at the top
    1. The business leader is accountable to building a better business and does not allow un-kept promises, CYA, excuses and denial in him or herself or in any of the leadership team. He or she leads by example.
    2. Senior leaders who do not perform are dealt with directly
      1. They are not promoted
      2. They are not “kicked upstairs” to useless and bureaucratic staff positions

     

  2. Accountability continues with the individual employee, manager, leader
    1. Each individual does what he or she says
    2. Each individual takes responsibility for successfully accomplishing his or her assigned tasks
    3. Each individual takes ownership for his or her results

     

  3. This accountability is pervasive throughout the organization and not just on the front lines
    1. Managers and staff people are as accountable as those in line positions
    2. Many organizations have strict accountability on the front lines: production workers are measured on efficiency and quality daily; salespeople’s sales quotas are assiduously tracked. But, this accountability trails off in other areas that are not as easily measured and where the results of the individual’s actions are not as direct and immediate, such as with staff roles and management roles.

     

  4. The goals and objectives for each individual in the organization are simple and clear
    1. Napoleon once said that orders need to be so simple that they cannot be misunderstood. Likewise, for each employee, their goals and objectives are crystal clear and front of mind.

     

  5. Management continues to follow up and evaluate employee progress towards those goals and objectives
    1. The fundamental management skill of “following up” is pervasive and consistent over time, ensuring that everything is on track with help provided when there are problems and issues.

     

  6. There are consequences for those that lack accountability and do not perform
    1. If, after working with the individual, the person is still not accountable and unable to carry his or her own weight; the accountable organization confronts the problem and finds someone who can perform.
    2. “To succeed as a team is to hold all of the members accountable for their expertise.” Mitchell Caplan (Former CEO, E*Trade)

     

  7. The organization is fairer and more of a meritocracy.
    1. Since performance is required and non-performance has consequences, there is less chance for favoritism, nepotism and other morale-sapping business practices.
    2. After a non-performer has been given sufficient opportunity to improve his or her performance, it is fairer to all involved to terminate that employee.
      1. “When someone does not produce and does not improve, it is not fair to them to keep them on. They cannot possibly enjoy not being successful, and it is arrogant on our part to believe that they could not be successful doing something else.” The Leadership Machine
      2. Inevitably, the alternative is to wait until there is a downturn and then lay the person off at a time when the economy is the worst and the jobs are scarcest.
    3. The good employees are not over-burdened picking up after the laggards.
      1. In any organization, the good employees know who does not pull their weight and resent taking up the slack.
      2. I give as an extreme example a story from a business I later managed. An employee, John (name disguised) who had once been a star had just stopped performing, despite repeated discussions and warnings. Because John had previously been so valuable to the team and was in an important role, the General Manager and Regional President balked at firing John. Finally, they pulled the trigger. Several weeks later, the Regional President visited the plant and asked the controller how the business was surviving without John in his important role. Her response was tinged with sarcasm. “Well, it has been very difficult for us to survive without John. But, we have done it. You see Ken now comes in late twice a week and then spends two hours talking by the water cooler. Mary comes to meetings late, contributes little and makes sarcastic comments. And I have been taking long lunches with my friends and charging it to the company as a sales expense. It has been difficult. But, by pulling together we have been able to cover and do all the work that John had done before.”

     

  8. The organization is leaner and simpler.
    1. Bureaucracy and layers do not need to be added to keep tabs over employees and pound on them to do what they should be doing anyway. As such, the organization and business are simpler with a significant reduction in meetings, reports, reviews, etc.
    2. There is less, but more focused activity.
      1. Growth initiatives and profit improvement initiatives are undertaken only when there is accountability in the core business. Without accountability for performance in what your business is doing currently, how can you assume that there will be accountability when your business tries to do something new?
      2. Initiatives are used to move the business forward and not as a new program to substitute for the lack of accountability currently in the business. As an example, when an accountable business has a sales problem, they make sure that they have the right sales team and right sales management in place and hold them accountable before beginning a fancy sales improvement or sales training initiative.
      3. Only when there is accountability throughout the organization, is it possible to determine the most important and highest leverage initiatives that would be worth the company’s time and effort to focus on.

     

  9. But, the well-run accountable organization is not a “lean and mean” metric-driven organization
    1. There are repercussions for non-performance. But, that does not mean that 10% of all employees need to be fired each year (a la Jack Welch).
      1. If everyone is performing and being accountable, then why would you introduce the fear and inevitable politicking by decreeing that 10% will be fired anyway?
      2. Alternatively, if more than 10% of your employees are not performing than you should address all of the non-performers, even if more than 10%, with the reassurance that if next year everyone performs than none will be fired.
    2. There are limits to metrics. In such grayer areas as new product development or R&D, accountability cannot be based solely on performance metrics and the end results because the end results are not guaranteed. There needs to be a focus on the effort, on doing what you said you were going to do, and on learning from past mistakes. Otherwise, all risk-taking will stop and innovation will be at risk.
    3. An organization that is single mindedly focused on accountability to metrics and numbers will become sub-optimal because the focus will be on the metrics not on making the business better.
      1. I give as an example a business that I visited. This business was a very profitable manufacturing business that prided itself on the quality of its operations. It was ISO9001, lean six sigma, etc. To get to this level of success, it had adopted a very clear system of about 20 metrics which it judged all operations on each and every day. Failure was not an option on any metric any time. Having 19 out of 20 metrics in line was still considered a failure. In touring the facility and spending time on the floor, I saw innumerable low hanging fruit: poor housekeeping, poor organization, poor warehousing, and employees working at ¾ speed without any passion whatsoever. I asked the General Manager why he did not fix some of these obvious deficiencies. His response was: “Yes, we know about these issues.  But, we have no time for training because we do not want to take anyone off the line. Further, correcting some of these problems will have a negative effect on the metrics in the short term so we don’t do them.” As such, they continued to run the business (which nevertheless remains successful) in a way that everyone from the General Manager on down knows is inefficient and less than optimal.
    4. In short, you can have too much accountability.

     

  10. In the accountable organization, each employee is respected as being an integral part of a winning team
    1. The accountability does not come at the expense of listening to and profiting from the insights of the employees
      1. Feedback loops exist to ensure that the goals and objectives continue to make sense. If not, they are changed.
      2. New ideas and risk-taking are encouraged and are rewarded even if that means missing a previously agreed to metric.
    2. The employees that are always accountable are thanked and recognized
      1. They may do nothing heroic except doing exactly what they are asked to do day in and day out. As such, they can often be forgotten and feel underappreciated
    3. “The achievements of an organization are the results of the combined effort of each individual.” Vince Lombardi

 

In summary, to be a very well-led and well-managed business requires the business to have a culture of accountability.

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About David Shedd

David has been a President - CEO - COO of an up to $350M group of manufacturing, distribution, specialty retail and services companies, having led 22 different businesses from turnarounds to start-ups to fast growth companies.
This entry was posted in Perform / Execution, Team / People and tagged , , , . Bookmark the permalink.

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