The Right Measures of Accountability Matter

Traditionally, employees are taught that if they designed a tight system and measured everything that could be measured, they would have enough accountability. If everyone did everything they were supposed to do and did it well, they were assured of success.

Well, now we know that doesn’t work. In fact, it’s a prescription for failure! The thought leaders in high-performance organizations know that isn’t going to take us where we want to go.

Here’s what works: figuring out what’s really important and establishing accountability for such measures—and only that. Don’t try to micromanage your people—if you do, you’ll see that they always hit the metrics you lay out for them, but the organization misses what’s really important. If you measure the wrong things, you get the wrong results.

Let’s look at the well-documented case of fake bank accounts at Wells Fargo.[1] Management wanted to increase the number of depositors, so they set quotas for each branch to open new accounts. When genuine depositors did not appear, the branches simply opened fake accounts. This ensured that the staff and branch management hit their numbers, but at a very high cost.

First, opening these accounts absorbed considerable clerical time. But it didn’t end there. After a full year of investigations led by Arizona, Connecticut, Iowa and Pennsylvania, the Bank agreed to pay settlements of $575 million. Aside from this steep financial cost, the Bank also lost considerable credibility due to a lack of accountability, and suffered a setback to its reputation in the marketplace.

This is an extreme case, but it makes the point: tightly measuring the wrong metrics leads to the wrong results.

Management needs to focus on the big picture metrics: revenues, profits, market share growth, share price, brand recognition, and the number of people who apply to work at that company. They need to create a vision that everyone can relate to–everyone from the senior management team to the front lines. Then management needs to trust their people. That doesn’t mean you let everyone do whatever they want—it means you give them the latitude to do what’s right for the company and the customer. If the vision is clear and the results are recognized, the results will be stellar and demonstrate accountability.

Don’t believe this? We can show you the research that proves that companies with strong, performance-enhancing cultures significantly outperform those without such a culture; they realize four times the average revenue growth, 12 times the stock price, and 756 times profit growth of those with counterproductive cultures.


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