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Passion, People and Principles

Alignment and Accountability

post # 119 — June 27, 2006 — a Managing, Strategy post

Companies are most successful when they are built on – and live up to -a solid, clearly articulated ideology (also known as a mission or values.) Only when these are absolutely known and shared can firms offer large degrees of autonomy to different geographical and service-line groups, while simultaneously assuring that firm cohesion, trust, excellence and focus are all achieved.

Without REAL shared values, top management can easily slip into being both controlling and dictatorial, and as a result, the company becaomes less flexible, adaptive and innovative.

In any but the smallest firms, it is necessary to decentralize decisions as to what to preserve, what to adapt and what to innovate. If there is any ambiguity in the ideology, then it will be hard for people within the organization to know what is expected of them when there are opportunities that might fall into any of the three categories. – And such choices appear every day, week and month!

While most firms have clearly articulated mission and values expressed as high-level principles, it is not always clear what, precisely, these translate into when it comes to senior day-to-day, week-to-week, month-to-month or year-to-year behavior.

Few firms have an unambiguous constitution: a clear, explicit understanding of what people in the firm have a right to expect from each other; what the rules of membership are; what the true “non-negotiable minimum standards” are and what is a matter for personal preference or personal strengths.

Companies and the people within them often understand their performance criteria and key values (different things, of course) in broad terms, but not all firms have achieved clarity in reality. Some values are truly “religious” – firms are prepared to be intolerant about them if coaching cannot restore performance. Others values turn out to be aspirational – encouraged but not necessarily enforced. The ambiguity both inhibits performance and makes performance counseling difficult (if not impossible.)

In my experience, the key differentiating factor between “excellent” and “good” firms is NOT a difference in the mission or values that they advocate, but in their ability to achieve diligent execution of their mission and values (to high levels) by introducing a culture of accountability.

The concept of accountability for living up to the firm’s ideology is not a trivial one. In many firms, there is no practical mechanism – hard or soft – to ensure that senior officers (or groups of senior officers in different locales or different disciplines) are achieving – accountable for – living the values of the firm.

To “assume” that senior officers are all doing the right things is almost certainly an insufficient organizational approach. Excellence is only achieved, in any field of endeavour, when an artist or athlete volunteers to discuss his or her performance with a caring, supportive, trusted coach who is charged with the task of helping the performer cross the gap between good performance and true excellence. An athlete or artist who is never coached will accomplish less.

Most companies have procedures in place for ensuring accountability for financial measures. The next challenge they will face is whether their senior officers are prepared to be held truly accountable for the ideologies and value systems they espouse.

What’s your company’s approach for ensuring that everyone actually does live up to the espoused ideology? Or does you company and its senior officers shy away from real accountability on these things?

1 Comment

Tim Percival said:

This is absolutely right David. At my firm, behaviours are critical. The shared values we have in place on the face of it look like every other firm’s. The difference is, we spell out what each value means in terms of actual behaviour. In the senior management team, we pull each other up if we stray from the values. Every member of the firm is evaluated through their personal development reviews against the key values. We have conducted independent research amongst some of our clients to see if they think we are living up to our values, and whether our values are important to them. We achieved “Best Brand in Practice” at the European Practice Management Awards in 2005 for this approach. We have also achieved various other awards for our approach. The core of our culture as an organisation is controlled in this way, and is in our marketplace a major differentiating factor. Of course, we don’t get it right all the time, but taking the approach you recommend has substantially changed our firm for the better – in terms of growth, profitability, client attraction/retention, and as a generally accepted “nice place to work”.

posted on June 28, 2006