Accountability – the hidden formula behind successful organisations

05/09/2017 Subscribe to de-cooded

In the UK, the business news in August has featured GSK’s new CEO, Emma Walmsley, and the change of tone and management style she is introducing after taking over the leadership role at the FTSE100 healthcare company. The mood music at GSK is focused on enhancing commercial focus and introducing a culture of greater accountability. Talk of “tough and disciplined choices” is all about improving competitiveness and performance at a company known for its consensual culture where underperformance was seldom penalised.

This year, where we have seen large, established companies such as Unilever in the firing line over lacklustre results, it’s worth pausing to reflect what makes companies slow at a stage when they should be outpacing the competition due to their economies of scale and dominant market positions.

Accountability – or the lack of accountability – has a lot do with it.

Accountability means different things to different constituencies. To a regulator and shareholders, it means who holds ultimate responsibility (and who is to blame when things go wrong). To organisations, generating greater accountability often means a spirit of entrepreneurial ownership that drives people to act in the best interests of the company. For an individual, it can be boiled down to a bias for action – a willingness to go the extra mile and get something done. So often, an organisation that lacks a culture of accountability is characterised by a lack of action, with a preference for hiding behind policy and procedure and finger-pointing.

You probably have first-hand experience of this.

The bureaucratic ‘drag’ of large organisations

Large organisations tend towards conformity of thinking, an internal focus and bureaucracy. Left unchecked, this leads to process compliance winning over the customer or commercial priorities as well as inaction and blame overcoming any bias for action and personal accountability. It also means a lot of meetings, as a preference for inclusion replaces clear roles and responsibilities and crisp decision-making.

Accompanying this drag, titles and rank increase in importance and a focus on ‘what we do’ creates silos and an internally-focused mindset. Inevitably results are judged against internal KPIs rather than external benchmarks or commercial measures and performance sags. For this reason alone, we welcome Ms Walmsley’s focus on accountability.

However, there’s more to it than just tightening up a focus on results and personal contributions. The outcome of greater accountability is higher levels of trust.

Trust

Trust has also been in the news a lot recently. Standard Life Aberdeen announced on the first day of trading as a combined entity that it will work to “hold boards and senior management to account for delivering sustainable business success”. Often ‘accountability’ and ‘holding to account’ is used interchangeably with the word ‘trust’ when it comes to corporate governance and the UK Government has been liberal in equating the erosion of trust in business with the falling levels of personal and collective accountability at senior levels in business.

At a more practical level, it’s not difficult to see how customers get a better service from staff who feel accountable for their satisfaction and Lean Manufacturing’s empowerment of employees involved in a process (to the point where they can stop a production line if they see something wrong) is the embodiment of accountability.

What to do?

So, what can be done to stimulate greater accountability?

Firstly, a foundation of collective endeavour and consistent culture needs to be built. It’s easy to act independently if you know that everyone is working to the same ends whilst providing support and back up when it is needed.

A culture that breeds high levels of accountability values action, personal contribution and makes every effort to empower everyone in the organisation. Linked to this, high accountability cultures celebrate the most effective behaviours as well as the right results. To have tried and failed is nearly always better than not having tried at all.

Process and policy need to kept in check – constant pruning is needed to keep bureaucracy fit for purpose. If staff functions outnumber commercial decisions, the customer and the external perspective can quickly be lost.

These behaviours and structures need to be personally modelled and owned by the leadership team and promulgated by line leadership rather than pre-packaged ‘training’.

They also need to be reflected in a framework of institutional practices aligned to encouraging and rewarding personal levels of accountability. For example, performance management systems need to recognise the right behaviours and values (see below) and internal communications constantly reinforce the message

Sometimes, however, demonstrating accountability lies in being the one to speak up with a different opinion, to challenge the consensus view or to act when not acting is the easier option. This is why, at GSK, Emma Walmsley has added ‘courage’ to the list of values on which staff are evaluated each year. Bravo.

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Coode Associates supports and advises companies on leadership and organisational effectiveness and alignment, identifying Purpose and Values and on culture-shaping more generally. If you’d like to speak with us, we’d love to hear from you: info@coodeasssociates.com.