Create More Accountability
Lack of accountability is a typical complaint of CEOs and other senior leaders. It seems employees at all levels can become more
astute at making excuses than meeting goals and objectives. There are a few things that can be done to create a more accountable environment
overall, but it does take work and will not happen overnight. In our experience companies lacking in accountability tend to have one or
more of the following issues.
1) Lack of clear vision, values and mission - Vision, values and mission were hot topics in the 80s and 90s, and many
companies spent a lot of money making sure theirs were marketable. However, marketing should not be the goal of vision, values and mission
statements. They are intended to inspire, guide and direct employees daily behaviors. If they are merely fancy words on the website, they
are doing nothing for your organization. Our belief is that values are the most critical of the three. If you have a strong set of values
that accurately describe your organization's priorities in terms of behavior, and if you communicate them well (and often), you will likely
begin to see more accountability in the organization. Once the values are part of the everyday vernacular in the organization, employees
begin holding each other to higher standards of accountability.
2) Lack of communication - Studies show that people need to be told something at least six times before it truly sinks in.
Therefore, CEOs and other leaders need to "over-communicate" in order to be sure everyone understands expectations, vision, values and goals.
Without clear understanding of the organizations' goals and standards of behavior, human nature takes over and employees begin finger pointing
when problems arise.
3) Culture of fear - Most leaders realize that leading by fear and intimidation is a thing of the past. Yet, sometimes
cultures of fear can crop up in organizations with generally well intentioned, benevolent leadership. Usually this happens from a lack of
communication and/or an overly hierarchical structure that keeps lower level employees from reaching the executive team. CEOs who refuse
to hear bad news or tend to shoot the messenger may also create cultures of fear, often without intending, or even realizing it.
4) Poor Hiring - Unfortunately, some individuals are simply not capable (or maybe willing) to be accountable. If they
have grown up in excuse making environments, those habits will be very hard to break. This is not only true for junior level employees.
Many executives have risen to the top of other organizations by becoming expert at blaming others. When interviewing candidates, it is
critical that you have an "accountability" scale. How willing is this person to admit to their mistakes and what have they learned from
them? The candidate who has never failed on an assignment or project, or has no idea of how they could have done things better, is
either woefully unaware or simply covering up the truth.
Recommended Resources on Accountability:
Websites:
www.theozprinciple.com
www.jimcollins.com
Books:
Execution - Larry Bossidy
The Driving Force - Peter Schutz
Contact KeyStone with a comment/question regarding accountable cultures.
Reduce Turnover
Consider the following example relating to employee turnover. On the average, Costco pays employees nearly 65% more than
Wal-Mart. Costco also offers employees a more generous benefit package. Despite the obvious costs, Costco enjoys significantly greater
profit per employee than Wal-Mart. How is this possible? Costco achieves this by reducing and controlling employee turnover. Their turnover
rate is only 6 percent in the first year, compared to Wal-Mart's nearly 50%.
The latest research on employee turnover projects the cost of losing an employee at somewhere between 75% and 150% of that
employees' yearly compensation. Of course, this depends on the level of the position, the industry, how effective that employee was, etc...
Needless to say, if you are losing upwards of 15-20% of your employees per year, you are letting a lot of money walk out your door. High
turnover can be the result of poor communication, lack of vision, poor hiring practices, lackluster compensation, or most likely, a
combination thereof.
Turnover can be curbed if attention is paid to the issue and an intentional plan to fix it is put in place. The first
thing to consider when looking at turnover is recruiting and hiring practices. Are you hiring people that embrace your existing culture and
share your values? If an employee has a values conflict with the organization, they are not likely to stay long term (and they may do damage
while employed). Gaining an understanding of a candidate's values and how they compare to the values of the organization, must be part of
the interview process.
The second is communication. Are you communicating your values, vision, mission and goals? Good people want to know
where the company is headed, what are the plans to get there, and how they factor into those plans. If you're not communicating to the point
where you are sick of hearing your own voice, then it's probably not enough.
Third, are you making sure that everyone in the organization is treated with respect? Everyone wants to feel valued and
appreciated in whatever their chosen field happens to be. If your company tends to look down on certain functions or jobs, you are more
likely to have higher turnover in those areas. How about opportunities for advancement? Are you placing people into entry level or remedial
task areas with no hope to move upward? Not many good employees want to do the same work through their whole career. If you're not spending
adequate time training and educating employees, you will eventually lose them. Unfortunately, the ones most likely to stay are the employees
least likely to be promotable in the first place.
Fourth, how well aligned is your executive team? You may not have turnover in the ranks of the executives, but your
executives themselves, or the dynamics of the team may be creating turnover underneath. If your executive team is not on the same page
in terms of values, vision, mission and goals, lower level employees are often the first to notice. They develop a distrust of the executive
team, and often the whole organization as a result.
Finally, are you paying competitively? Note that we use the word "competitively" here, not "excessively." Also realize
that we are placing compensation last on the list for a reason. Very few people leave a position purely for money. This is one of the biggest
misunderstandings in today's business environment. Because exit interviews are used to collect data on turnover, compensation comes to the
top of the list. Let us explain; When a smart person leaves an organization, what answers are easiest and cleanest to give the exit
interviewer? "The new job will be more money, closer to home, etc…" Not many people will give honest answers in exit interviews, because
smart people do not burn bridges. Telling an organization that their management is poor, their vision is ill defined, and they don't
communicate well, is committing career suicide.
Make no mistake, money will generally be part of the deal, as most people do not take pay cuts when they change jobs.
However, it is generally a last consideration and almost never the major reason for the move.
Recommended Resources Regarding Turnover
Books:
Impending Crisis, Too Many Jobs, Too Few People - Roger E. Herman, Thomas G. Olivo, Joyce L. Gioia
The War for Talent - Ed Michaels, Helen Handfield-Jones, Beth Axelrod
First, Break All the Rules - Marcus Buckingham, Curt Coff
Contact KeyStone with a question/comment regarding turnover.
Avoid / Break Silos
Silos are a common phenomenon in today's organizations. Because functions and jobs have become more specialized through
the years, it's easy for executives and employees to get caught up spending too much time on what's best for their area, rather than what's
best for the company. The end result of silos is often lost opportunity for new business or increased effectiveness, as each group has
its own agenda losing sight of the big picture.
Silos are most often a result of one of two things.
Poor executive team alignment. Alignment refers to a state when everyone on the team has the same agenda and shares
a common vision for the organization. If an organization is not well aligned, most likely there is a mis-match of values amongst the executives.
Obviously, these different agendas can have a tremendous negative effect on overall performance. If there is a feeling that this type of
misalignment exists, the first course of action is examine the core values of the organization. If they do exist in written form, do they
accurately describe the drivers of the organization? If not, a re-evaluation here is critical. If they do accurately describe how things
really happen at the organization, then it's time to analyze the core values of the members of the team. Are there any areas in conflict?
If so, can they be remedied, or must changes be made to the team to reach alignment? Jim Collins in his books "Good to Great" and
"Built to Last" discuss alignment at length. Also, www.jimcollins.com
provides excellent information in this area. There is also
an excellent article on Verne Harnish's (Author of The Rockefeller Habits) website about core values,
click here for that link.
Poor communication. If the executive team and the employees do not fully understand the goals and vision for the organization,
it is easy for them to lose sight of the big picture. Most people want to be successful in their roles and given the absence of information on
the big picture, they will focus on whatever picture they are given. Oftentimes, CEOs and executives feel they have communicated effectively,
but actually employees have not heard the message. It's important to reinforce vision, goals and values on a continual basis. It has been
said that when you are sick of hearing your own voice, say it one more time.
Recommended Resources Regarding Alignment
Websites:
www.jimcollins.com
Books:
Five Dysfunctions of a Team - Patrick Lencioni
Good to Great - Jim Collins
Firms of Endearment - Raj Sisodia, Jag Sheth, David Wolfe
Contact KeyStone with a question/comment regarding alignment
Create a high performing team?
All high performing teams have at least one thing in common; A group of talented individuals committed to a common cause or vision.
To build this kind of team, first ask "What is our vision or purpose? Is there a reason beyond a paycheck that people would
want to come and work here?
If you are providing a viable product or service in the market, there most likely is a compelling way to create your vision,
regardless of how mundane or ordinary your business may seem.
Consider Trader Joe's. They are a supermarket -they sell food. However, their greater purpose is to provide unique, high
quality food to the "foodies" in the markets they serve. This is something that employees can get behind and believe in. It becomes a very
compelling reason to be efficient, effective and customer service oriented.
Once your organization has a compelling vision or purpose, it must make sure it's hiring the "right" people. Trader Joe's
hires as many "foodies" as they can, because they know these people will inherently buy into their purpose. These people do not have to be
falsely motivated to get excited about providing the products Trader Joe's sells. Getting the right people, however, goes beyond identifying
those with a mere interest in your product or service. You must also ensure the people you are hiring share your core values.
Customer service orientation provides a simple example of core values at work. If you are trying to build your organization
around stronger customer service than your competitors, you will want to hire as many naturally customer service oriented people as possible.
We all know some people are just better at it than others. Being "naturally" customer service oriented relates to something in a person's
core values. It may be that they truly get a kick out of making others happy, or they just believe it's important to always be friendly, or
maybe they have a desire to be liked by everyone they meet. Regardless, it's part of their DNA.
At the executive level, values become even more critical. If your organization is trying to compete on service and you hire
a VP of Operations without a service orientation, you have corrupted the whole operations department. This person could create dis-incentives for
customer service, simply by their example and what behaviors they reward in their employees. Those who are customer service oriented might
sour, and either leave or develop bad attitudes. Before you know it your once competitive advantage has virtually disappeared.
Therefore, using values information for hiring, at all levels, is critical. You must know what a person is all about
underneath their impressive track records and degrees, and compare that to what you are all about as an organization. Once vision and values
are defined, you can begin to recruit for strong talent that also fits your values. This will force you to be more selective in who you
hire, and in the long run your culture will be stronger and much higher performing.
For more resources on values, vision and high performing cultures please refer to the following:
Websites:
www.jimcollins.com
www.theozprinciple.com
Books:
Firms of Endearment - Raj Sisodia, Jag Sheth, David Wolfe
Good to Great - Jim Collins
Built to Last - Jim Collins, Jerry Porras
Contact KeyStone with question/comment regarding high performing cultures
Ensure ethical behavior?
Business ethics, or the lack thereof, have dominated the headlines over the last few years. Since Enron, Worldcom and the other
debacles, companies and the government have been scrambling to ensure that businesses are operating properly. The initial reaction, which was
appropriate, was to create strong compliance vehicles like Sarbanes-Oxley to make ethical behavior mandatory. Today, organizations are realizing
that business ethics go well beyond compliance, and are actually part and parcel of an organization's culture. But how does a CEO or senior
leader ensure that his/her own staff are behaving accordingly? After all, they can't be watched all the time.
Having a well-defined and well communicated set of core values will go a long way in this endeavor. "Well defined" refers
to the fact that the values are accurate in describing priorities and can be related to daily behavior. It also means the behaviors translate
into behaviors the CEO and Executive Team can and do live up to. When a management team starts to build this "values based" culture, good
employees (those who share the values) become empowered to snuff out unethical behavior.
Consider the following scenario: The CEO speaks at the annual meeting deploring employees to reach 25% top line growth
for next year. However, he/she doesn't identify "how" that growth will be accomplished, or what the bounds exist for creating that growth. The
sales managers who tend to play in that grey area, now have the perfect excuse, "You heard the boss, 25% growth, how else can I hit my numbers?"
Although the other employees know their actions are questionable, they do not report the behavior. No one wants to be part of the reason for not
hitting the goal.
If values are clearly placed above monetary goals, everyone has a guidepost for behavior. This doesn't mean the organization
can't have aggressive goals, it just means those goals must be reached within certain parameters.
In some industries/businesses, it may be necessary to identify both a set of core values and a very straight forward "Don't
Do" or "Won't Tolerate" list. This may include things like, "We will never sell customer information" or "When working internationally, we will
not pay bribes, even though it may be customary in that country." These kind of statements would be separate from the core values, contained
in an Ethical Code of Conduct for the organization.
Formal compliance programs designed to "catch" bad behavior in the act tend to be difficult to maintain, and are often not
effective. Building consistent ethical behavior into your business culture will be more time consuming, but in the end will be much more
efficient in averting ethical breaches.
For more information on building ethical corporate cultures please refer to the following resources:
Websites:
www.cebcglobal.org
www.corporatecompliance.org
Books:
Harvard Business Review - On Corporate Ethics - Various Authors
Liberating the Corporate Soul - Richard Barrett
Conscience and Corporate Culture - Kenneth E. Goodpaster
True North - Bill George
Contact KeyStone with questions / comments regarding ethics / compliance
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