building blocks

Most executives in charge will find that accountability eludes them. In an effort to get things done, a senior executive may create a culture that is severe and unforgiving, with employees being terminated in rapid fashion. The executive hopes that different people will perform better than the ones dismissed – in most cases, faulty thinking.

Another senior executive will develop a soft culture, thinking that accountability is harsh – again, faulty thinking. This results in people at top levels chasing, babysitting, or actually doing the work of others in order to ensure that things get done.

Those who remain staunch in wanting to crack the accountability code will purchase expensive people management systems that ultimately may not work because of other factors. This kind of system focuses on just one of the three building blocks needed to reach healthy accountability.

The Three Building Blocks of Healthy Accountability

1. Leadership Development.
2. Performance Management
3. Risk Governance

When carefully orchestrated, integrating these three building blocks will make a significant difference in a company’s sustainability, profit, and growth trajectory. On a more personal level, it supports the executive’s cognitive and emotional capacity, which means the executive will enjoy less stress, have a greater ability to think strategically, focus on what matters, make better decisions, and model and develop her people.

Let’s examine each building block and see how it plays out in business scenarios.

(Note: No matter what the size of your company, these three building blocks are still valid and necessary!)

1. Leadership Development

Executives will need to shift their leadership style from traditional command-and-control to more empowering and coaching roles.

This involves:

• Fostering empathy, compassion, and vulnerability.
• Building psychological safety to encourage innovation and problem-solving.
• Acting as a coach to facilitate constant learning and skill development among employees.

Leadership Development in Action: Elysian Enterprises

At Elysian Enterprises, CEO Sarah Jones noticed that her team’s creativity and problem-solving capabilities were stagnating under the traditional command-and-control leadership model she had inherited.

To begin addressing this, she embarked on making the shift to a more empowering leadership approach.

• Empathy and Compassion: Sarah began by instituting regular one-on-one meetings with her team members, aimed at understanding their personal and professional challenges. This shift was inspired by a practice at Google, where managers are trained to start meetings with personal check-ins, enhancing team cohesion and emotional safety.
• Psychological Safety: To cultivate an environment where employees felt safe to express ideas and concerns, Sarah introduced a ‘no blame’ policy for failed projects, focusing instead on learning from mistakes. This mirrors practices at companies like Pixar, where ‘brain trust’ sessions are held, allowing creative teams to present ideas without fear of criticism or repercussions.
• Coaching Instead of Controlling: Transitioning from a director to a coach, Sarah facilitated workshops and provided resources for continuous learning. Inspired by the coaching culture at Microsoft under CEO Satya Nadella, she focused on growth mindset training, significantly enhancing her team’s adaptability and innovation.

2. Performance Management

Effective performance management is crucial for holding people accountable. This includes:

• Setting clear, challenging yet achievable targets.
• Ensuring transparency in how these targets align with the company’s overall objectives.
• Maintaining open communication about performance, where metrics are actively discussed and not just passively reported.
• Instituting appropriate rewards and consequences to reinforce the importance of meeting targets.

Performance Management in Action: Orion Industries

At Orion Industries, CEO Mark Liu faced issues with underperformance and unclear accountability.

He overhauled the performance management system to align individual goals with corporate strategy.

• Setting Relevant Targets: Mark introduced a system where targets were co-developed with employees, ensuring they were challenging yet attainable. This was similar to the approach at Intel with OKRs (Objectives and Key Results), where ambitious and transparent goal setting is standard practice.
• Transparency and Communication: To improve transparency, Mark implemented a dashboard visible to all employees, showing real-time data on performance relative to targets, akin to Salesforce’s use of similar dashboards to drive sales performance.
• Rewards and Consequences: Recognizing the power of incentives, Mark revamped the reward system to include both financial bonuses and recognition programs, such as ‘Employee of the Month’, which not only rewarded results but also behaviors aligned with the company’s values.

3. Risk Governance

Robust risk management systems help ensure accountability at all levels of an organization by:

• Establishing a clear risk governance framework that defines roles and responsibilities across the organization.
• Implementing comprehensive controls and regular stress tests to manage financial, operational, and strategic risks.
• Encouraging a culture where risk-aware decision-making is valued and practiced by all employees.

Risk Governance in Action: Proteus Corp

At Proteus Corp, a multinational company with diverse operations, CEO Linda Zhu strengthened the company’s risk management framework after a major data breach.

• Clear Risk Governance Framework: Linda established a dedicated risk committee that reported directly to the board, ensuring high-level oversight and accountability. This mirrored the approach of banks like JPMorgan Chase, which have robust governance structures in place to oversee various types of risks.
• Comprehensive Controls and Regular Stress Tests: Proteus Corp implemented regular IT system checks and scenario planning exercises to assess the impact of potential threats, similar to stress testing done by financial institutions as required by regulations like the Dodd-Frank Act.
• Culture of Risk Awareness: Linda fostered a culture where every employee was trained to recognize and report potential risks, much like the safety culture at airlines like Southwest, where employees at all levels are encouraged to report safety concerns without fear of retribution.

Together, these steps form a comprehensive approach that a chief executive can use to build a culture of accountability and resilience that supports both individual and organizational growth.

In the next article, I’ll share why top executives still won’t delegate – and if you are one or are supervising one, what you can do to shift this.

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