It's not me...It's the man behind the tree!

In the end...critical objectives are either realized or not!

It is widely understood that uniform tracking of operating results is the fundamental function of all business accounting systems. The accounting function provides clear assessments of the results and reports the changes and balances in various accounts. Management accountability should similarly be based on the same type of uniform measurement of operating results and acceptance of responsibility for the variance from the target results planned. This approach is required to systematically recognize success and failure in a manner which immediately prompts analysis, acceptance of responsibility, and actions to foster improvement in real-time.

For example, if company sales or regional sales decline someone must be “accountable” for the actions or lack of actions that should have been taken to mitigate the variance from the sales objectives for the period. Just like one knows in a balance sheet that all the entries must “add up”… it also true in any management measurement system. There should be no active accounts to assign poor results to a declining economy or a competitor's introduction of a new product. There should be only accounts that allocate responsibility specifically to management for the variance from the planned sales results. Management job is to produce the needed (planned) results…period! Reporting on the circumstance of any variance is just that, it is not analysis and not a way to "offload" responsibility. If any management team does not fully recognize and accept the responsibility for the company's results they will always be looking for ways to assign away the variance instead of aggressively and creatively seeking corrective actions.

Boards of Directors should never view management's job in such a manner that any performance gap can be ascribed to “uncontrollable forces” outside the company. Justification dilutes accountability and hinders the development of new knowledge. One cannot view management's job as partly passive when it is convenient. What counts and the only thing that matters, in the end, is: Were the required objectives met or not. If not, why not? And…what has and is being done to ultimately achieve the target results and recover the variances.

It must be understood that the lack of timely actions or the wrong actions is too often the basis for performance deficits. In the example discussed here, If management knew or should have known that the economy was softening then it was their responsibility to react and act to still realize the planned sales objectives. True accountability comes from the knowledge of and the acceptance of responsibility for poor outcomes. Failure to step up for the company and the employees are not acceptable regardless of the reason(s).

It is this embracing of overall responsibility without “justification for poor results” that will deliver consistent, optimal performance. Conversely, a management team that always accepts responsibility and tailors actions accordingly can also stand proudly on all results in varying economies or competitive environments. It is the complete acceptance of responsibility that fosters continuous learning by management that ultimately makes the difference in strategy development and execution.