There is a common mantra in business (and life) that you should take accountability for your actions and be prepared to answer for them. This feels important and right to us. We want our politicians to own the decisions they make about lockdown regulations, our doctors to make the best clinical decisions for their patients, our teachers to keep our children safe and give them the best possible education.
Equally we want our staff, and in particular our management team, to be accountable for their performance.
When accountability is a bad idea
So we put things in place to enforce accountability. These may be formal structures such as job descriptions and professional regulators. Or they may be social norms that we promote subconsciously.
But this attitude often leads to unintended consequences. Matthew Syed wrote a revealing article in the Guardian about the tragic case of Baby P, and documents the disastrous outcome of changes in social care put in place as a result of his death. The new measures were supposed to improve communication and shared accountability.
But they were too onerous and led to massive stress. That led to talented and experienced people leaving the profession, which actually made the whole problem worse. People were so concerned with covering their backs that they focused less on children’s best interests. And as a result, more children ultimately suffered harm instead of fewer.
What about a carrot instead of a stick?
This is an extreme example, but one of many in all spheres of life and business. Fear of the consequences will always tend to lead people to act in defensive ways. Why are children afraid of getting questions wrong at school? It can only be because they have learned at a very young age that mistakes reflect badly on important people’s perception of them.
Interestingly, it’s not only an expectation of bad outcomes that leads to poor performance. Experiments have shown that offering a high reward in games typically leads to worse performance than smaller rewards. Once the reward becomes significant, the performer tends to focus on the reward itself instead of concentrating fully on the task itself.
Accountability seems like a good idea when you want other people to deliver good outcomes. But setting high stakes, good or bad, will actually have the opposite effect and lower performance.
Performance management – a case in point
I worked for years for a global company with an American attitude to performance management. All employees belonged to grade bands within the client unit. Every 6 months, their supervisors assessed them against their grade description and their individual targets. All well and good, and a chance to weed out bad habits, teach new skills and grow people towards the next band.
Except…all the supervisors then gathered in a room and made a ranked list of everyone within a grade. They wrote each name on a post-it note and pushed them into a top-to-bottom order, with no option for equal ratings. Suddenly performance was relative and not absolute. Even worse, the criteria for ranking were subjective and different to the ones used in the performance review.
The company then drew lines: under the top 10%, the top 40%, the top 60% and above the bottom 10% of names. Pay rises depended on the percentile, and so did the chances of redundancy.
You can imagine the arguments in the ranking meetings. Each supervisor wanted their own people to do well. They didn’t want to tell their staff that they had only got them a low pay rise, or even worse. And the ranking of staff could reflect onto the supervisor’s own performance rating.
The predictable outcome
The net effect was that supervisors hid poor performance and bad behaviours and failed to tackle them. There was no incentive to admit that your staff were causing issues, or even that they were working hard to improve something. And unless another person in the rating meeting could challenge with a different perspective, the most persuasive speakers got the best results. They glossed over anything awkward and made their staff look excellent, whether or not deserved. A system designed to drive high performance actually failed to reward it consistently.
All of this should not stop businesses driving for high standards or accepting any level of performance. It just changes how you set out to achieve it. Putting stress on individual employees with high rewards or high penalties is counter-productive, but there are better ways to grow.
Doesn’t no accountability mean anything goes?
If you want your business to thrive, you need to create a culture where mistakes can be admitted without negative consequences and where everything is seen as an opportunity for learning and continuous improvement. Bad things are made good, and good things are made better.
How do you encourage high performance?
The first key is openness and honesty between all members of the team. That means being aware of how managers react when they spot a mistake, or when staff suggest a new way of doing things. It means reviewing your performance review processes and your reward structures. It means looking out for silos between teams, or between members of the management team.
It probably also requires coaching for new behaviours. Even when you have the structures in place for a fantastic culture, remember that people are shaped by their previous lives – both early experiences at home and school, and also how they were treated in other jobs. Just because your culture does not punish mistakes does not mean they will instantly believe it.
So make sure that all your management team are role models, both in suggesting improvements themselves, and in welcoming ideas for improvements from others. Then encourage and challenge your staff to follow suit.
Why do we do that?
The second key is to encourage people to keep questioning assumptions and ways of working. An outside view is especially useful here – either a consultant like myself, or your newer members of staff. Experience is valuable, but over time it is easy to fall into patterns without wondering whether they are still applicable.
New employees tend to hide their opinions, but they are the ones who see oddities most clearly. Make a point of drawing out their observations. It makes them feel valued and able to contribute to the company. It also opens your eyes to assumptions you didn’t know you were making. If there are good reasons for what you do, you can use the opportunity to extend the learning of the new member of staff. But chances are that some observations will make you think twice and open the door to thinking of better alternatives.
Encourage a “fail fast” culture
The third key is to use data to constantly look for evidence of improvement. Do lots of small experiments and don’t be afraid to fail fast and stop things that are not working. It’s important both to try things, and to know when to give up.
If you don’t set clear success criteria, you will find yourself drifting. Ideas that are obviously poor are easy to stop. But watch out for the ideas that almost work. Unless you are clear on what success looks like and ruthless in stopping ideas that don’t meet it, you will not have time or money for a better idea. Gardeners prune thin growth to make way for stronger shoots. Don’t be afraid to stop doing things that have some value, if you think you can get more value doing something else.
Where should I look to increase performance?
The theory of marginal gains is a whole topic in itself, but focus on the seven key levers in your business, and look for constant small “power of one” improvements that will accumulate over time:
- 1% increase in Prices
- 1% increase in Sales Volume
- 1% decrease in Cost of Goods Sold or Direct Costs
- 1% decrease in Overheads
- 1 day decrease in Trade Receivables
- 1 day decrease in Inventory or Work In Progress
- 1 day increase in Trade Payables
How can I help?
If you could benefit from an outside view of your business, to help you spot the assumptions you are making, or to help embed a culture of continuous improvement, get in touch for a free 15 minute chat. I offer training programmes to improve in-house skills, or consultancy to be the outside perspective and facilitator for your strategy meetings.