Mutual Accountability Magic

This is the eighth in a series of dialogs between a new CEO and an experienced mentor in dealing with a tough business issue. Follow @2020outlook on Twitter or enter your email address in the right column to be notified each time a new dialog is available for reading and comment. Thank you for your suggestions.

“True accountability exists in your organization when the people can go to one another
and ask ‘how am I  doing?’ and hear an honest, detailed answer.”

James Weaver, Turnaround specialist and
former CEO of seven enterprises, including Gold’s Gym

Greg welcomed James to the airport Starbucks where they’d agreed to meet. “James, good to see you again. Wow, what a mess I’ve stepped into. I hope you have some ideas for me.”

“I do too, Greg. How’s your dad?”

James was a college friend of Greg’s father Colin. Despite the fact that James had pursued a successful career in business while Colin opted to get his Ph.D. and teach finance at Case Western Reserve, they’d always kept in touch since graduation.

“Dad’s fine,” answered Greg. “He’s on sabbatical in Hawaii right now. When he heard I was brought in to turn this company around, he said to call since it’s a ‘been there, done that’ for you.”

“I suppose he’s right. I’ve been in your shoes several times, and while every situation was different, I think I learned a lot about the approach to take. Tell me about this company.”

Greg described the company, including its marketing and financial situation. It was 16 years old and had a stable customer base, but revenue had been flat for several years. He was hired by the board for his connections to potential partnerships that could grow the company.

“That’s the high level picture, James. I’m sure I can build partnerships the company needs to grow, but in reality it’s so screwed up right now, I don’t feel comfortable asking friends at those companies to get involved. I’m surprised revenue has even stayed level. We’re living on the company’s reputation rather than its recent performance.”

“Sounds like a couple of situations I’ve seen before. You can get lost in the weeds if you just address problems one at a time.”

“You’re right, it seems overwhelming. So, where do you think I should focus?”

James grinned. “Each company I turned around was different, yet there were always a few basics underlying a lack of performance. So, do you want me to walk you through the process one step at a time, or would you like to hear the punch line up front?”

“Please don’t make me wait.”

“OK, here’s the vision – create mutual accountability – that’s the whole thing. Sounds like motherhood and apple pie, doesn’t it? It’s more than a slogan, though, and it takes hard work to achieve, but once you get there, the results are amazing.”

“‘Mutual accountability’ – do you mean more than just getting people committed to doing what they say they will do?”

“That’s the kernel, but making it mutual is the challenge. Say you’re a CEO and you start having one-on-ones with your directs, and you even set up one-on-ones with other key players in the company. They try to be responsive because you’re the boss, but I guarantee that’s not what will get you where you want to go. You may see some improvement, but it won’t last.”

“So from what you said earlier, there’s a process that has to be executed?”

“It’s a process, yes. Some of it is serial, and some of it comprises steps that you have to do in parallel across the company. Ready to hear about the process?”

Greg smiled. “That’s why I’m here. Please!”

James began describing the steps he’d taken to turn around an established company similar to the one Greg ran. He started with some basics: defining each job, ensuring that a talented person committed to doing the job was in place, and making sure the job fit the person.

“Here’s one example. I’ve seen many great salespeople get kicked upstairs to sales management, and then they fail. In another case, I helped someone from finance transfer into HR, and it just was not a good fit for her abilities. She was a great accountant, but her soft skills weren’t strong enough for HR.”

He continued. “Make sure your folks have the training and the tools they need, then don’t overmanage them. Let them make decisions in their area. Some will come ask you to make decisions for them, and you have to encourage them to take the lead. Many others will love having control, and that grows a sense of ownership. Also, put metrics in place so you there’s an agreed medium of communication and accountability for each area. If they’re making decisions, measuring the results, and adjusting, you can give them feedback and they will rapidly get better at what they do.”

“Sounds like management blocking and tackling,” Greg said. “You’ve worked magic at the companies you’ve turned around. Where does the magic lie?”

“I put huge amounts of effort into building up everyone around me. The magic happens when you transfer the accountability focus from you to them. Eventually people in the company start to hold each other accountable for great performance. When you see it happening, encourage it. Discuss it with the individuals and reinforce the principle when you have company meetings. Here’s the key – you’ll know you’re getting there when someone in the company pipes up in a meeting and asks you about our own performance.”

“You mentioned metrics. Is there a general principle you use to decide which ones to use? There are all kinds of ways to measure results.”

“You’re right, and yes, there’s a principle. You first have to engage key people and influencers in the company in developing a vision for growth. You can’t just push your personal vision top-down with no feedback. Sure, you need to lead, but you ultimately want them to own the vision, to think about the implications of that vision for their area of responsibility. The vision has to be simple, inspiring, and easy to remember. In the 1920’s Coca Cola’s CEO set a vision to put Coke within an arm’s length of everyone in the world. That was an audacious goal, and now they have thousands of beverage products in 200 countries. If you were a manager at Coke, that vision became the standard against which you measured everything you did.”

“How do you find and establish the right metrics?” Greg asked.

“To measure progress, you and your directs and their managers have to agree on the best way, then together you make those metrics visible to everyone in the company. That’s what instills a sense of accountability to the company and their peers, rather than only to you the boss. It then becomes natural for them to put their own plans together in support of the vision.”

Greg smiled and nodded. “OK, I think I get it. I don’t see the shortcuts I was hoping for, but I do see a clear path to better performance. It sounds like a long-term process.”

“Not really. I had a challenge much like the one you’re facing. In six months you could see drastic changes, and a few months after that we blew out our annual revenue targets. It’s amazing to see what people can accomplish when they truly hold each other accountable.”

“Thanks for meeting with me. I’ll buy the coffee next time,” said Greg. “I’m clear about what I need to do. Of course, I may still want to tap your brain once in awhile.”

“Any time.”

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