In the words of the great LeBron James, “We all want accountability on this team, we just don’t want to be held accountable.”
LeBron said that in an interview during a brutal stretch of losses endured by his Cleveland Cavaliers, and it perfectly summarizes the environment inside many professional services firms. The professionals, particularly the partners, understand that for the firm to achieve its goals, they need to allow themselves to be held accountable. Unfortunately, when the time comes to create such accountability, the same professionals ultimately reject, avoid or sabotage any attempt to “control them.”
In a pre-conference survey for a firm management conference Bob presented at in 1981, the participants identified “partner accountability” as one of their five biggest challenges. In the recently completed 2018 Accounting Today Top 100 Firms survey, completed by over 100 participants, partner accountability, or the lack of it, still ranks high among the top CEO concerns. At least in this area, not much has changed in the last 37 years.
Accountability makes all the difference
Most professional service firms have pretty good systems of accountability for revenue production and expense control. Internal reporting systems and incentive compensation are often well linked to the company’s financial goals. Peter Drucker famously said “You can’t manage what you can’t measure.” A corollary argument can be made that if you want accountability in other areas, such as marketing, staff development and innovation, you will have to measure and manage to those objectives.
Most professional services firm have a strategy that requires change – often dramatic change. The typical plans that we observe call for faster growth, the creation of new services, expansion into new geographic markets, and the achievement of better profitability or valuation. Such ambitious goals rarely come from staying in your comfort zone and repeating the same routines and behaviors that created last year’s results. Most strategies require an organization to reach outside of its routine and habits.
For an organization to change, its people, at least those in leadership positions, have to change. Unlike sports teams, in a professional services firm we can rarely trade all our players and get new ones. Usually to change the team we have to change the behavior of the people we already have.
For people to reach outside of their comfort zone, they will need encouragement, commitment and most of all a system of accountability. The presence of something we answer to – an idea, a vision, a body of management -- makes the difference between a strategy that is successfully implemented and the infamous new-year’s resolution list.
When we allow ourselves to be accountable to our firm, we make a commitment to the firm’s plan and strategy. When we refuse to be held accountable, we essentially question the sincerity of our own commitment. Philip knows that from quitting smoking – when you are truly committed to quitting smoking, you have no trouble telling all your friends and family that if they ever see you with a cigarette, they should whack it out of your hand. Quitting in private is more or less an admission that you will soon be lighting up another one.
Many firms make the statement that, “We don’t need to be accountable to management because we are all accountable to each other.” Unfortunately, “everyone” is suspiciously close to “no one.” Accountability, much like a letter, requires an address in order to arrive.
“Accountable to each other” is often a very nice way of saying that we hope our partners will do something that we personally prefer not to do. The notion of everyone being accountable to everyone else is impractical and idealistic. It dilutes the responsibilities on both sides – the responsibility to perform as well as the responsibility to manage.
For accountability to truly exist, the following questions need to be answered:
- Who is accountable for what? This is the most basic principle of project management – the person responsible for an action has to be clearly identifiable. People have different skills and levels of experience. They also have different levels of ability to deliver on specific change initiatives. Nimble organizations know that “ownership” of individual change initiatives should go to those with the right combinations of skills and passion to get the job done. Others should be expected to “buy in” to the change and not obstruct progress. Senior leadership should support, monitor and measure the “owner’s” progress and the others’ “buy-in” behaviors.
- What are they accountable for? What is the expected result? Was the expectation a result or an effort? Note that the result can be qualitative ‑- for example “better client relationships” -- and not just quantitative. However, qualitative goals should be measured just like financial goals. The measurement process for qualitative goals is probably for another article, but another corollary to Drucker’s measurement statement is that anything can be measured once you make the decision to do so.
- Who are they accountable to? Accountability is best practice one on one. Even when we are ultimately accountable to a team, it is best that the team is represented by a person – a CEO, a managing partner, a partner, a team captain.
- What is the “forum” and cadence for accountability? When and how will the firm review if expectations were met and hold the professional accountable? The forum can be a regular meeting or a management relationship. It can have annual or monthly frequency, but it has to be clear when and how will the conversation be had and how often the results will be measured. Bob believes in calendaring several accountability interactions in advance, for up to a year at a time with each change initiative leader. It’s also helpful to have a set agenda for the meetings and to be determined not to let them slide or be rescheduled or deferred.
- What are the consequences? Accountability needs and enforcement mechanism. Without enforcement, the loop is not complete. Expectations without a feedback mechanism are like a message in a bottle. In many ways, the definition of accountability is “clearly expressed expectations paired with a system for enforcing those expectations.”
When it comes to installing accountability, the immediate reaction from most firms is to look for a “bonus plan” that can somehow manage performance without actual management. The idea is that somehow the money will get people to perform without anyone being the “bad guy” or the “nag.” In reality, bonuses can help create accountability but they rarely work outside of other very important factors.
Tools for greater accountability
Accountability tools can take many forms and most of them have nothing to do with compensation. Many effective levers that “push” action and cause changes come from the culture of the firm, the intrinsic motivation of its professionals and the persistent action of the management of the firm. Think of those as the “culture lever”, the “ambition lever” and the “management lever.”
The vast majority of times, people tend to do what they believe is the right thing to do (culture and its values), what they want to do (motivation and ambition) and what they believe the firm is asking them to do (management or vision). Of course, they also do what they are paid to do (compensation). However, if you don’t think something is worth doing, you have no desire to do it and you are not encouraged and managed to do it, the chances are that being paid to do it will hardly matter. The role of compensation as a motivator declines precipitously among higher-paid leaders who are financially comfortable.
Our experience has been that the most effective drivers of accountability in a firm are typically:
- Transparency of actions and results. When we know that someone is watching us, we are much more likely to try harder and to comply with expectations. This is very visible in a gym – if you are doing push-ups on your own you will likely never do as many as when you are being watched by everyone else in the gym. Some exercise clubs actually actively deploy that strategy to get their members to work out harder.
- Supportive and engaged management. When we are patiently and persistently held responsible for the execution of a plan, we are much more likely to complete that plan. The management has to be supportive and encouraging, rather than beating us into submission – otherwise most professionals will reject it and will either retreat in a shell or openly oppose and sabotage the plan. The ideal management style is what Bob calls “gentle persistence” – the notion that the manager is there to help and facilitate the result but also that the result is inevitable.
- Appeal to values. We all are much more likely to do the things we believe in. If the leadership of the firm can draw a connection between the values of the firm and the actions that need to be taken, then the chances of success dramatically improve.
- Appeal to competitive nature. Most leadership professionals have a competitive spark in them. Not all are driven to always be first, but none ever want to be last. This closely relates to transparency of the results – going back to push-ups, the thought has often crossed Philip’s mind in his boxing gym that, “I know I will not be the guy who does the most push-ups, but there is no way I am quitting before THAT guy!”
- Money. Creating monetary incentives for performance and change is certainly an effective tool of motivating behavior. It just should not be used in isolation or to an excessive degree. Many parents have learned that lesson the hard way – if you use candy as a motivator, eventually you run out, not to mention creating some health issues for your kids. Money works best if it is combined with the rest of the levers. If in your firm, management, culture and ambition combine to push your partners to achieve more, then the incentive plan that compensates that achievement will not only be very effective, but it will also be seen as fair.
- Scorecards. Balanced scorecards can also promote accountability. A balance scorecard can go well beyond the simplistic measures and can look at goals and objectives set by the firm and the planning process used. We often have the bias of searching for “objective” measures and shying away from “subjective” categories of performance measurement. However, we have to remember that some of the most valuable forms of contribution are qualitative and not easily measured – quality of relationships, excellence in service, ability to mentor, morale and teamwork – those are just a few examples. Peer, upstream and top-down evaluations can work well for incorporating those into the scorecards. Once implemented, balanced scorecards can also be tied to a variety of mechanisms such as bonuses, recognition and performance status.
- Other rewards. We have worked in many turnaround situations in organizations where there was no new money to reward outstanding performance and none would be available for a long time. Yet, high-quality leaders have stayed engaged and created life-sustaining changes in the organizations. They found other forms of reward that are just as compelling as money. Love of their team plays a role for some. The potential for future promotion, esteem, future compensation and a determination to win are among other drivers that kept them going forward.
We began this argument with the notion that accountability requires enforcement, and hopefully you can see how each accountability mechanism implies immediately its own form of enforcement and consequences.
Accountability is not just a system of rewards and punishments. It is not all about carrots and sticks. We are not mules even if at times we are just as stubborn. Accountability is a process of making commitments and living up to those commitments in a form of a “social contract.” The enforcement mechanisms should be more like “last resort” rather than “cost benefit analysis.” After all, most of us refrain from stealing mostly because it is morally wrong, not because the probability of being caught, times the number of years in jail, yields an unfavorable expected value.
Ultimately, in the system for accountability adopted by a firm, “consequences” should mean that not completing your commitments will not be tolerated and will not be accepted. The outcome does not have to be monetary, but it has to be imbedded in the firm’s culture. Those who do not complete their goals should most of all feel the admonition of the firm. That cultural force can be even more powerful than any financial incentive systems. It is the reason we don’t pick our noses in public – it’s not that we will be fined if we do, it’s that we will be shamed by others for doing it
Being accountable to yourself
Perhaps the most important form of accountability is the one we all have to ourselves. The noted author and consultant David Maister points out that “professionalism” is not a diploma or achievement but a state of mind. No one can motivate us as much as we can motivate ourselves and no one can manage us better than we can manage ourselves.
It’s unfortunately very difficult to do so. Still, much of accountability comes down to what professionals expect of themselves. The more each professional aspires to be a better contributor and to continue growing their practice, the easier it will be for the firm to help and support them in that process.