By John Barrington
Chairman of a public company rang me to ask my views on the key elements of effective leadership. I outlined my thoughts on clarity of the Purpose of the organisation, clarity about what outcomes are to be delivered, insight into the Strategic Issues that must be addressed (as opposed to what an executive may want to address), aligning resources to deliver the agreed outcomes, designing and implementing appropriate strategies to address the issues, and holding people to account to ensure the intended results are achieved.
It was this last point, accountability, that he really picked up on. It provoked a strong response and I had clearly touched upon an issue that had been frustrating the Chairman. While he and the board had been holding the CEO to account against Key Performance Indicators, it became clear that this was not being translated through the organisation.
How many times do we see this, where a CEO may be working hard to maintain company performance but is not being supported by the next layer of management? Or where a CFO is bearing the brunt of underperformance as the CEO shelters behind a veil of excuses. There are always reasons for missing performance targets. Rational, well thought out reasons. But at the end of it all, they are merely excuses. I am not referring to short-term issues that may impact results, or exogenous factors such as the Global Financial Crisis that impacted all organisations. I am referring to medium to long-run underperformance that goes unchecked and unresolved.
Accountability is a cultural factor and, as with most issues of culture, it begins at the top. If a board does not hold its CEO accountable for delivery of agreed performance targets and in turn, does not expect the CEO to hold his or her executives accountable, a cultural softening begins to occur. This is often insidious because the excuses are accepted as ways to explain away, not just short-term aberrations, but sustained under-delivery.
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