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The Mistakes, Myths and Truths About Accountability
This book review originally appeared in Baltimore and Washington SmartCEO Magazine November 2010 issue.
Stop for a moment and ask yourself, “What is the most important driver of success in great companies?” Go ahead, jot down a few ideas. If you’re like most people, you’ve probably written things down like great products, great marketing, word-of-mouth or luck.
One of the most overlooked success drivers is developing a culture of accountability. In my experience, accountability, or more appropriately the lack of it, is the biggest reason businesses fail to reach their potential. Millions of dollars of income and billions of dollars of valuation are lost within small and mid-market growth companies because of a lack of accountability.
Accountability is more than simply doing what you say you’re going to do (though that is a key component). Accountability is a comprehensive approach that ensures all aspects of communication – both internally and externally – are completely aligned with intent and, further, that all action aligns with desired intent as well. There is probably nothing more complicated – or more valuable – than creating a culture of accountability.
It is for this reason that any time a book comes along promising meaningful insight into creating and maintaining accountability, I jump on it. While on vacation this summer, I came across just that. Roger Connors and Tom Smith have been writing about accountability for years, most notably in the their previous bestseller The Oz Principle.
In their newest book, How Did That Happen: Holding People Accountable for Results the Positive, Principled Way, Connors and Smith take concepts that have previously focused on creating individual accountability and apply them to creating organizational accountability. The authors have been consulting with corporate America for many years and promise to provide readers with a comprehensive how-to manual for creating accountability in any organization. They achieve about half of the promise.
Connors and Smith share a simple four-step process for effectively establishing expectations. Establishing clear expectations, as the authors point out, is the critical first step in establishing accountability. Without clear expectations, you have no chance to create real alignment.
The first step in the process is forming the expectation. Mark Twain once said, “Great communications isn’t about communicating so that you can be understood; it’s about communicating so that you can not be misunderstood.” The same is true when it comes to establishing expectations.
The difficulty associated with creating this type of clarity is probably the main reason that that vast majority of people tend to overlook this step and jump right into action. While forming expectations can be difficult, the time spent creating clarity will return at least a five-fold factor.
Connors and Smith point out that this type of clarity is required up and down the “expectations chain.” That means anybody involved in creating the desire result needs to be considered – whether their position is above yours, several levels below yours, or even outside your organization through the vendors you use.
To make the effort easier, the authors provide the acronym “FORM” – Frame-able, Obtainable, Repeatable and Measurable.
The second step in the process is to clearly communicate the expectations. Communicating why the expectations are important is every bit as important as communicating the desired results. While you can certainly “command” certain actions, in today’s hectic, change-constant world, it is important that you enroll people’s hearts as well as their heads. When people clearly understand why something is important, they are far more capable of adjusting on their own as circumstances dictate.
The third step in the process is to ensure they are aligned. “When it comes to achieving key expectations, it is important to recognize that there are different levels of alignment. The high level that brings full ownership and personal investment is what we call ‘Complete Alignment.’ All other levels of alignment, with their lower level of buy-in, fall into the category that we call ‘Complyment.’”
It is my experience that the vast majority of small and mid-size business executives confuse “complyment” with “complete alignment.” This mistake is the primary reason that managers often complain about employees’ commitment.
The final step in setting clear expectations is to inspect. As the saying goes, “inspect what you expect.” Probably the biggest surprise I’ve had working with small and mid-market growth companies is just how little they inspect their expectations. Some of this is on account of simple laziness, but a bigger cause is the apparent fear that executives have that they may turn off their top performers by “micro-managing” them. As the authors point out, the reality is quite the opposite.
With the challenges coming your way, creating a culture of accountability will no longer be an optional advantage for businesses, but a critical “ticket to the ball game.”
Warren Buffet Provides Another Teachable Moment
One of the biggest challenges facing small and mid-size business is developing leadership teams and creating an effective succession plan. Warren Buffet recently announced a portion of his succession plan, and it provides a meaningful lesson for every CEO.
Here are three points I find highly instructive:
- Buffet realizes that he is a unique figure and that as a result he must break his job in two to make it work. Too often entrepreneurs try to replace themselves, rather than focusing on replacing their capabilities.
- Buffet realizes that an effective succession process takes time.
- The biggest point is that Buffet understands that if you’re in charge, you need to be in charge. In appointing Todd Combs the heir apparent to running the investment operation, Buffet is giving Combs a portfolio to control. Buffet will still run the major portfolio, but Combs will have complete control over a smaller portfolio.
The biggest mistake I see entrepreneurs make when building a senior team or a succession plan is to give people pseudo-control. In essence the entrepreneur gives the instruction, “you’re in charge as long as what you do is in accordance with what I would do.”
Buffet isn’t ready to let Combs run the entire Berkshire portfolio (and neither is Combs). Instead of limiting Combs ability by “working together”, he is letting Combs run a smaller portfolio and build up to taking it all over.
Once again, we can all probably learn something from Buffet’s actions.
Revisiting: What Do You Sell?
In April, I discussed the need to shift from selling “stuff” to selling results. Making that shift requires a change in mindset far more than merely talking about what you do differently. In your mind and actions, you must change the focus of what you sell.
For example, at Imagine, our promise is:
- More sales
- Faster sales
- More profit per sale
One of the things we do to help companies achieve this is 1:1 sales coaching of their salespeople.
If we start our conversations about their salespeople or their coaching/training programs, then we are selling on the left side and will be commoditized. Even if we’re asking questions and learning what they like or don’t like, we are in the “we-do” trap and our sales process will get bogged down.
This is true even if the customer/prospect calls up in search of sales training/coaching (or whatever it is that relates to what you sell). As a matter of fact, this is one of the most common – and costly – sales traps out there. The customer sounds like they’re looking for exactly what you provide, using the exact words you use to describe it. Figuring you’ve got a “lay-up”, you explain your stuff and before you know it the customer is lost or pressuring you on price.
From the very first moment you engage with a customer, you’ve got to make a critical decision: are you going to focus on the stuff or on the result? If you’re going to focus on the result, which is critical if you want to be selling on the right side, then you must not engage at the tactical level until the result has been clearly defined, as well as (at least) the initial barriers to achieving that result are identified.
When I get a call from someone who wants to talk with me about doing sales training, my response is always – “What do you want to do sales training for?” When they respond, “To increase sales,” I follow up by asking them to explain what is preventing them from making the sales they desire.
That opens up a line of questioning and conversation that allows me to radically differentiate our programs and create the value necessary to make profitable sales.
Breathe
When I’m working out, my trainer always tells me to breathe. My response is that breathing comes pretty naturally, so why would I stop.
I learned that whenever somebody comes under stress, physically or emotionally, the natural tendency is to take a breath in and hold it; almost as if the mind thinks that it can hold the oxygen for later use. When we hold our breath, our body tenses up and we actually become more vulnerable.
I’m see this happen in sales situations all the time. With more pressure and tighter markets, it is increasingly likely that whenever we encounter an opportunity, we tense up – we hold our “sales breath.”
We have thought like, “Don’t lose this one,” or “What do I need to do to make the customer happy?” When this happens we press, and the likelihood of success decreases markedly.
So, as we continue to gain traction in the emerging recovery, remember to breathe – and let the sales happen.
Growing in a Recovery
After three of the toughest years in the lives of growth-oriented CEOs, the signs are finally pointing towards sustained growth opportunities. While most of the headlines are still very negative, the underlying fundamentals show new opportunities for companies ready to make the transition.
While our research clearly indicates that we are out of “The Great Recession” that has provided the narrative for the last three years, this recovery will not be anything like the “recoveries” of the last 20 years.
We’ve summarized the key ingredients for succeeding in a recovery to five points, or The 5 P’s to Ensure Success in a Recovery. Now is the time to give yourself a check-up in each area, and ensure that you are prepared to create a newer, bigger future.
The Five “P” Checklist:
- People
- Process
- Proposition
- Profit Formula
- Posture
If you want to learn more about The FIve P’s, here are three options:
- For a quick summary, check out the latest issue of The Demand Creator Newsletter.
- On November 9, 2010 at 2pm EST, we will be hosting a special webinar on The 5 P’s to Ensure Success in a Recovery. We’ll have more details about the webinar out early next week.
- If you can’t make the webinar, you can order our soon to be released report – The 5 P’s to Ensure Success in the Recovery.
Of course, you are always welcome to pick up the phone to ask one of our experts any question or send us an email.
Toffler Predicts The Next 40 Years
When Alvin Toffler talks, I listen. Whether it’s the predictions he made is his first book FutureShock, or the book that started my journey to reinvent selling, The Third Wave, Toffler has always had an uncanny ability to read the tealeaves, and translate those insights into actionable idea.
Yesterday, Toffler released his 40 For The Next 40, his predictions for the next 40 years. The paper is well worth a read (you can download the full paper here).
Here are the three most important predictions for fast growth companies:
- Companies will increasingly create value by being “connectors.”
- Knowledge will be a major source of capital.
- High costs of “obsoledge” will impact global competitiveness.
What is obsoledge? It’s knowledge that has become obsolete.
That’s right. Toffler is now equating knowledge to last year’s chip. Knowledge is becoming like lettuce – it spoils.
The key? Use it – and keep learning.
Here are my two predictions:
- The people who best learn how to learn will be the leaders of tomorrow.
- The companies that best attract those learners will be tomorrow’s winners.
Design Thinking In Sales
A few weeks ago, I shared a review for The Design of Business, an excellent perspective on design thinking and strategy. Since reading the book, I’ve been far more aware of how this type of thinking provides a critical advantage in the sales process.
Successful selling today requires that you be able to get your customers to understand the limitations of the status quo and to develop complex solutions that can be easily understood. You must have the ability to understand your customer’s current (perceived) reality and to enable them to see how your solution can effectively change that reality to create a better one.
This requires a dynamic-type of thinking that is missing in many sales organizations. Design Thinking is ideal for this effort. Combining the strengths of deductive reasoning and inductive reasoning, “Designers” can lead frustrated buyers to the future they desire, while driving high-margin sales opportunities.
By no means do I think every salesperson must become a “Designer,” but every sales organization needs to have a least one.
If you’d like to learn more about Design Thinking, you can download this article from Harvard Business Review (subscription required) or get the book The Design of Business (affiliate link).
Trust In Pricing
Everyday, I hear salespeople complain and moan about how customers are so price sensitive. They tell how customers are less loyal than ever before or how companies’ sole buying goal is to commoditize sellers.
I always caution that these are symptoms of a much deeper problem. At the root of the problem is a complete breakdown of trust that buyers have with sellers – especially in the area of pricing.
A common sellers’ practice that drives me around the bend and contributes to this distrust is how sellers pad their pricing on opportunities that they perceive to be easy or already won. When sellers price their offerings from the perspective of “how much more can I get,” instead of pricing from the perspective of creating a true win/win – they are begging to be commoditized; after all that’s what the seller is doing to the buyer.
I understand that this practice is as old as the world of selling is, and I understand the motivation to “get what you can” when profit margins have the type of pressure that they do. But – and this is a big “but” – in today’s drought, there are no easy one’s. You may trigger a shop cycle when you didn’t need to.
I remember when I was young and first entering the world of sales. My mom cautioned me about some of the darker behaviors that occurred in that world. I asked her how would I know if something would be a mistake and she told me, “Doug, just pretend that whatever you do will show up on the cover of New York Times, if it would embarrass you – don’t do it.” I think the same advice applies to your pricing.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
