Raising Awareness of Accountability in the Workplace

The mission of this blog is to get more people talking about accountability in the workplace and in our organizations in general. I am happy to report success, even if it is only one more person. Over the last few days Halogen Software’s Human Resources Adviser and official blogger – Dave has published a series of articles about accountability (even better, he mentioned me – Thanks Dave). To read the articles in full click here: article 1, article 2, article 3. Now of course the articles are advertisements for his company’s software but that is okay with me if there is no more than one salient point in the message. Dave makes several. My favorite is the following excerpt:

Where the real accountability comes in is around keeping everyone responsible for their actions on a day-to-day basis and creating a culture where everyone understands what they are to achieve, and is measured against that.

Ahhh, music to my ears. He nailed it on the head. This is exactly what performance management is about. Now the trick is achieving said culture. Sounds like a great blog topic to me.

Next time – Achieving a Culture of Accountability (part 1 of ??)

Is Accountability a Performance Management Issue – part 2

In the first post on this issue I ended with the fact that very few of the experts writing about Performance Management or the vendors hawking consulting advice or software talk about accountability in the open. They talk about Goals, and other non-threatening aspects of Performance Management. This also applies to the words associated with accountability – expectations, responsibility, consequences, and confrontation. I think this is a mistake and a missed opportunity for both groups.

For the experts, nothing could be more important for improving organizational performance than addressing the lack of accountability, the unwillingness to set clear expectations, the failure to clearly communicate the consequences of failure (to: the organization, the department, and the individual) , and the importance of accepting responsibility for ones own actions.

For vendors selling services and solutions: having a platform that enables managers to be more effective at doing all those things is a terrific selling point. Most senior managers are not dumb people so don’t sugar coat your product when selling to that level. Let them know that you understand that holding people accountable is hard stuff. Let them know that your products make it easier for their managers to hold people accountable AND that it makes it harder for those managers to avoid holding people accountable.

The more we use these words, the less afraid we become of them.

Measuring Stuff

Why do we measure things? Especially as it relates to the performance of things and people? The first page of the newspaper (I’m showing my age) that most men turn to is the sports page. We want to know how well our favorite teams and players performed. We can recite from memory stats on our favorite players going back years. We review, analyze and discuss the previous day’s game for hours with anyone that will listen. We say things like _______ was off his game. He should have been pulled in the second inning. We are very comfortable with second guessing other peoples decisions based on as set of data that we can get out a newspaper stat page. We do this because we know that even in a season with as many games as baseball, every inning is important. We know that every pitch has an impact because they all add up to a cumulative result. We expect that the manager of the team understands this and makes small corrective actions quickly so that outcome is the desired one.

Yet when we finally do tear ourselves away from the water cooler and attempt to talk about our own stats we tend to shy away from short term stats. We are not comfortable measuring our businesses in the same way. We say things like, well that works fine for a widget factory but we are different. We do sales, and you can’t measure prospecting calls per hour (day). We are an accounting group and you can’t measure transactions. We are a software company and you can’t measure lines of code, or errors, or rework, or …….

What is it that you can’t measure on a short interval (i.e. several times per day) that if you did would allow you to make some small corrective actions quickly that would change the cumulative result? Now just go measure it. And don’t let logistics get in the way. Once you figure out what to measure, figuring out how will come. We have all kinds of communication methods even with the remotest of employees.
B-T-W – Don’t forget Unintended Consequences

Unintended Consequences

As everyone in business knows – if you don’t measure it, you can’t manage it. But what happens if you are measuring the wrong thing? Well obviously it can drive the wrong result. Worse still is that it may drive exactly the result you hoped it would, but it drives it way too far or drives other undesirable results along with it that are not seen until something hits the fan. In nearly every one of our consulting engagements we work with our clients to set up a set of metrics that can be measured directly on the floor in very short intervals, typically 1 to 2 hours. We do this to enable front line managers to drive barriers to performance to the surface so that they can be resolved on the fly instead of building up to unrecoverable levels. Often, probably more times than not, we discover after a few days that the measure that the client told us was the one to watch turns out to be the wrong metric. Either its focus is too narrow and other important metrics suffered (the old production vs. quality dilemma for example) or the focus of the metric is way too broad and we never achieve the intended result. I see the same thing on the verge of happening on a grand scale with a trend that is developing in the talent and performance management fields.

As global competition heats up corporate profits will get squeezed tighter and tighter. Furthermore we all know that the competition for top performers is becoming intense. Both of these trends are forcing companies to look for ways to both improve productivity and retain talent. This is driving industry of all types to adopt more and more aggressive pay-for-performance plans. I urge caution here. These plans must be thoroughly thought out from every angle to avoid unintended consequences from choosing the wrong metrics to drive the incentive program. Take for example Arthur Andersen and Enron. As Barbara Toffler points out in her book Final Accounting: Ambition, Greed and the Fall of Arthur Andersen no one in AA ever intentionally set out to take the company in that direction. In the beginning Andersen himself was as diametrically opposed to where AA ended up as possible. He was the great crusader for fiscal responsibility. However, over time the reward system that developed drove both the right and wrong behaviors.

Another example of how a system can go wrong with unintended consequences lies in the very heart of government oversight agencies – the SEC. In September an arbitrator ruled that the pay-for-performance system adopted by the SEC in 2003 was illegal because it discriminated against African-Americans and employees over the age of 40.

We also see these types of consequences with executive pay on a regular basis. Tie compensation strictly to some short term metric like share price and what do you get? Short term results, long term heart ache. How many companies can you name?

One could also make the case that the whole housing market collapse is due to the way loan officers and others in the loan approval process are compensated. If you are paid by the number (or dollars) of originations, then you are incentivized to take more risks.

So as we go about trying to improve our companies’ performance, let’s make sure we are picking the right metrics for the right reasons.

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