A few years ago I facilitated discussions in South Africa, the USA and Mexico, where I posed this question – with some varied responses, but an unsurprising theme emerging. I thought I would re-post this article because the conclusions remain relevant today. Many organisation’s incentive schemes rely largely on financial outcomes so it shouldn’t seem strange that many people immediately jumped to the answer that people should be held accountable for results, or outcomes, or as some people call them: “financials”. There were, of course, other options offered. There is a more complete list below.
The intention of this article is to explore why people so quickly jump to the conclusion that they do, why holding people accountable for results may be bad for your business in the long run, and what the alternative may be.

Accountability is important

At the core of this argument is the issue of accountability. Accountability is important because in its absence people simply don’t reach their potential. Without accountability we have, at best, mediocrity in our people… and so many controls that even small businesses become bureaucracies. Take the example of expense claims. When a business starts out people are typically trusted. As it grows the trust continues… until someone (untrustworthy) spends more than they should on the company card. At that point the appropriate response is to hold the person accountable to a higher standard of judgement and trust. Instead, most businesses define a new policy. Or put artificial limits on people’s cards. Both measures devalue the judgement of everyone – not just the initial offender. And we hire another person into Accounts – to make sure that expense claims are, from now on, scrutinised and closely controlled. It’s expensive. It’s waste. And it reinforces mediocrity in all our people – who now understand quite clearly that their judgement isn’t up to it.

But I am not writing this article to explain the importance of accountability. Most people and organisations agree that accountability is important. It is also not very controversial to say that consequences should include reward, recognition, censure and discipline. The problem is that, for the most part, people are actually held accountable for the wrong things.

What are the possibilities?

With the help of workshop participants I compiled a list of possibilities. This list isn’t fully comprehensive, but it makes the point that the possibilities are broader than many people consider.
People can be held accountable for any one, or any combination of, the following:

Let us start by considering the purpose of holding someone accountable. Our view (the Legitimate Leadership view) is that consequence is a necessary condition for personal growth. Without consequence people live in a selfish world where they can be mediocre and no-body cares. It is precisely because no-one cares that they never move beyond mediocrity, and never get close to their potential. When these same people work in your organisation, it should come as no surprise that the sum of their personal mediocrity reflects in organisational mediocrity. If your people don’t strive for excellence, neither will your business.

Let us consider each of the possibilities in our list in terms of its impact on personal excellence.

Results, outcomes, goals

On the surface it seems sensible to hold people to account against results, outcomes or goals. After all, these are the things we are all trying to achieve, so making them the basis for our bonus calculations ensures that we’re all facing the same way. There is, however, a serious problem worth considering: results are impacted by many things outside of our control, or even our significant influence. When people are held accountable for things outside of their control, there is enormous potential for accountability to be disconnected from the real contribution of the individual. Consider the following table. It shows four possibilities. The first and last possibilities show scenarios where contribution and result are aligned. The middle two show scenarios in which there is a serious disconnect.

Before dismissing the centre two scenarios as unlikely, or insignificant, think about the myriad reasons they could come about. Results are often collective, where one person’s contribution is greater than another’s. Results can be affected by externalities such as economic conditions or industry strikes. Commonly, the impact of this year’s efforts is only reflected in next year’s results. Or the next years. Further, and possibly most importantly, in order for our businesses to sustain and innovate, we often ask our people to try new, creative and out-of-the-box ideas which we agree make sense to try. At least we should. In these cases, though, the result is uncertain. Someone could do a great job of sending WhatsApp messages to increase sales, just like you agreed, and yet not see an increase in sales. Or perhaps just not in this cycle. It might have just been an idea worth trying but not pursuing.

If the events mentioned above were rare and unlikely, then I’d concede that holding people accountable individually for collective outcomes was not the end of the world. But they’re not uncommon. They happen all the time. External events happen. Lags happen. People make radically different contributions to the same outcome. Results regularly happen despite people, not because of them.

Let us get back to the purpose of holding people accountable: achieving personal and organisational excellence. What do you think happens when you reward that sales person for achieving target even though the customer service they gave was dramatically sub-par? (I recently bought a car despite the sales person, who did his best to scupper the deal, believe me!)

They do the same next time. And eventually your customers go elsewhere. The sales person doesn’t grow and neither does your business. The effect is the same for any of the reasons mentioned in the previous paragraph: mediocrity.

Effort, commitment

The mistake of rewarding people simply for effort or commitment is arguably not as common as holding people accountable for results, but when it does happen, the effect is the same: mediocrity. Over many years working in the consulting industry it has become clear to me that there is little correlation between the quality of work (and hence client value-add) people produce, and the amount of time they spend at work after hours. In fact, after hours work often translates to additional cost. Being more expensive than necessary for the same output is definitely not an attribute of an exceptional business.

Putting in time and effort is not the same as adding value, and whilst it is often (usually?) a pre-requisite for excellence, it is not the same thing. The problem, of course, is that it is not easy to tell a committed person that his/her commitment is appreciated, but not productive. However, unless its mediocrity that you want, it’s a conversation that you really can’t avoid any longer.

The alternative: contribution against a standard

The remainder of the items in the list have a different feel to them. Attitude, behaviour, living the organisation’s values, doing the job, continuous improvement, innovation, contribution. These are the types of things that differentiate an excellent performer from a mediocre or poor one. Crucially, they are also things over which people have significant individual control – which they can choose to do or choose not to do.

Once we have the means and the ability in place to do our jobs, excellence really has more to do with the quality of our choices than anything else. Holding people accountable for their choices (as opposed to out-of-our-control outcomes) is the best way to improve the quality of, and intent behind, their decisions. Imagine people in your organisation made all of their decisions in the pursuit of excellence in contribution. Not short-term outcomes, not personal material gain, but excellence. Such worlds are few and far between, but they do exist. Typically, in idealistic, brave start-ups. That is, until the focus changes from creating something new and amazing to driving results.

The Legitimate Leadership Model uses the word “contribution” to encompass the values, attitude, behaviours, continuous improvement, innovation, etc. that people demonstrate whilst doing their jobs. The level at which we expect people make their contribution is what we call the “standard”. As a point of subtlety; if the standard is our expectation of each individual, to be used as a means to support that individual in moving gradually towards excellence, then the standard must necessarily be tailored to each person. Not the job, the person. In any case, an excellent person, who makes mature and excellent decisions, will necessarily do an excellent job in time. (Disclaimer: said person must also be in the right job, but that is a topic for another article).

So, in summary, stop holding people accountable for results that are largely out of their hands anyway, and start to focus on what they are doing to make those results happen – the things that are in their hands. At the same time, make sure that you set an expectation of excellence, and continue to lift that expectation as the person grows and develops. If you get it right, over time people will start to expect excellence of themselves… and be ready for them to start expecting nothing less than excellence from you too.