In my travels as a professional strategic planning facilitator, I have worked with thousands of business executives. A common theme among them is frustration about a perceived lack of accountability. Whenever a CEO says, “I just wish I could hold my people more accountable,” I ask, “to what?”
Many mid-market companies (and almost all small ones) lack the structure to define what it is that people are to be held accountable to. A company is like an ecosystem; when you pour crud into the river upstream, it tends to flow downstream. Lower level employees do not leap toward the opportunity to be held accountable, so it is incumbent on management to provide the tools that promote it.
To be an accountable organization requires adoption of basic management best practices:
Be mission-focused. When employees are connected to something larger than themselves, they become invested in its success. It is inadequate to inform them about senior management decisions; they need to know why they were made.
Share information. Once employees understand the motivations of their leaders, they make better decisions. For example, when employers explain the economics of profit, employees are more likely to focus on discounts, defects, safety, etc. I am not suggesting that companies have to open their books- only that employees understand how the sausage is made in terms of making money.
Set clear values and behaviors. Values must be converted into behaviors so people know exactly what is expected of them. For example, integrity is often cited as a value that management teams hold dear. But what does integrity mean? If it means that information is shared with customers (about late deliveries, defects, etc.) even when it is painful, then those standards must be clearly articulated so employees know what they are responsible for. Managers need to live and reinforce these values every day. Visual reminders of these values are also very important.
Establish a strategic plan with clear goals and objectives. A strategic plan sets the “true north” for an organization and binds its management team together. Without a strategic plan, departmental goals lack meaning and context, promoting silos. Without clear direction on what is most important, everything is important. See the resource: Why Have a Strategic Plan?
Departmental level objectives. Once a corporate strategic plan has been established, each department can set goals that cascade down from it.
Create and explain key performance indicators (KPIs). Within my speeches, I field more questions on KPIs than any other subject. It’s very difficult for managers to isolate the most meaningful KPIs. The path of least resistance is to maintain departmental KPIs that don’t require much effort to be shared with others. Without shared goals and corresponding KPIs, it’s hard for departments to work together and hold each other accountable. KPIs should be a push and not a pull (automated and sent frequently, as opposed to pulled in a query). See our white paper: The Scorecard Guide.
Performance management system. As companies shift toward feedback loops and away from formalized performance reviews, managers are less likely to have the critical conversations. The structure in formalized reviews promotes leaders to isolate poor performance and bad behavior, forcing management to do something about it. Then, the conventional review can be complemented with consistent one-to-ones where less formal feedback is shared often.
Pay-for-performance incentive system. Incentives that are not aligned with a strategic plan and corporate scorecard lack meaning. The right incentives can align frontline staff with the strategic priorities of the corporation and clearly define what success looks like.
Productive follow-up meetings. Once a company has created a strategic plan, departmental goals and KPIs, managers can meet frequently with their teams to course correct.
There are many dependencies within this list of practices. They follow a certain order and logic. The performance management system is dependent on higher level KPIs, etc.
I have found there are two types of executives: those who want structure and those who don’t. It is a lot easier to skip these steps and just get today’s work done today. But best-in-class organizations provide structure for employees to be the best versions of themselves. Once management has provided the right tools, it becomes abundantly clear who is accountable to what.