Owning Failure — Accountability at Every Level

With the rise of large corporations has come a new-found ease in sharing, diverting, and burying blame. The more people that are involved with a given project, and the more resources need to be pulled from disparate areas, the easier it becomes to shift blame away from oneself. Sometimes the blame moves to other departments. Sometimes it moves to outside factors completely.

Although shifting blame can appear attractive for an individual (after all, less chance for blame generally equates to a greater feeling of security), the practice ultimately leads to weak group cohesion and unmotivated teams. People who are reasonably certain that fault will never find its way to them will not work as hard, since they have minimal stake in the success or failure of the entire team.

Building a culture of accountability at every level of your business is essential to success, and setting up a company for true victory requires all workers to feel as though what they do (or don’t do) has consequence. This actually applies to customers as well—while they’re not a part of the internal ecosystem, a company that is accountable for its actions in the world at large will have an easier time holding its constituents accountable when something is not working.

Accountability With Customers: Meeting Expectations

One of the easiest ways to start making your company feel more accountable is with customers, specifically regarding customer complaints. A complaint from a product user represents a node of failure in a business’s design, and the best thing a company can do to take ownership is improve an unhappy customer’s experience and make amends. But what is even more important is that the business makes sure that the complaint does not replicate itself among other customers. A complaint that is mitigated at the individual level is only addressing a symptom rather than a cause, which could be further up the pipeline.

Reassessing After Complaints—Always Improving

According to Customer Complaints and Types of Customers, an article produced from the University of Florida’s Department of Food and Resource Economics, for every customer who takes the initiative to bring up a complaint expecting a redress of grievances, more than 25 customers sit in silence. These unhappy customers represent a strong possibility of lost business, especially in a market where competition is fierce. It’s reasonable to assume that if even a single person brings up a complaint that there are dozens more waiting who are silently unhappy and ready to move on from your brand.

In the 1990s the Federal Benchmarking Consortium called for several agencies to create a comprehensive list of best practices for complaint management used by government agencies as well as major corporations like Delta Airlines and Texas Instruments. Some of the practices for dealing with complaints found during this assessment included:

  • Training employees to deal with complaints as they arise, during first contact, and giving them the power to deal with them effectively.
  • Using technologies such as customer relationship management systems to identify consistent causes of dissatisfaction, and feed that information into future planning.
  • Providing clear avenues of communication for customers facing difficulties, such as customer help lines and comment cards.
  • Looking at complaints as a feedback, and as a sign that structural improvement is needed, rather than as an individual problem to be resolved.
  • Structuring an organization to make the above activities as seamless as possible.

How these lessons can be applied in any given organization can differ even between departments, but these core conceits remain true in both today’s large businesses and efficient government organizations. If complaints have begun to mount, look at this (and others like it), consider what you’re neglecting, and plan to make changes. These changes will come with up-front costs, but the long term benefits will outweigh them.

Measuring Change: Are Accountability Improvements Actually Helping?

It’s important to focus and understand how you will measure the impact of your accountability improvements. Integrating technological solutions provides a solid platform for analysis, but data without context is useless, and it’s possible you might be collecting data that you don’t know you need. Start with an honest assessment of the total number of complaints from all avenues, whether phone calls, emails, or social media messages. It’s okay if this is a high number.

Use this baseline to compare month over month changes. Don’t just look at the ratio of compliments to complaints—look at the total numbers of each, and define your success accordingly. It can be misleading to assume that your business isn’t doing well if the number of complaints it sees somehow rises dramatically. What if you’ve just created a new Twitter or Facebook account? By opening up channels for consumers to communicate, you might find that more have decided to voice their opinion. The perceived effect is failure, when in reality you are improving your customer service experience significantly by talking to your customers more, and this spike in complaints will eventually smooth out.

The Federal Benchmarking Consortium study mentioned one unnamed company that saw the amount of letters they received go from 10,000 a year (mostly complaints) down to 4,000 a year (mostly compliments) by focusing on a) making it easy for employees to fix complaints, and b) making it easy for customers to get their complaints in front of someone who can make a change.

Accountable Teams and Employees

Building better customer service means empowering customer-facing personnel, like sales teams and customer service reps, to take actions on their own. This too requires a foundation of accountability to be constructed before it can implemented successfully. Just as a company must broadcast accountability to its customers, so too must it hold employees accountable for their actions on behalf of the organization—including both successes and failures.

The Foundation of Accountability—Trust

Giving employees the tools to deal with issues as they arise requires a great deal of trust not just on the employees, but on the processes that a company has designed to deal with problems as well. Rather than having a clear, organized flow of activities that allows for minimal deviation, employees need to have the ability to make judgment calls and stand by them, which means flexible operations are essential. Any employees who can make the company feel accountable for customers must in turn be accountable for the actions they take in the pursuit of that goal.

Effective companies work to consciously dissolve trust barriers among employees as well as in between those employees and their managers. This practice tends to encourage employees to approach their management teams about uncomfortable topics, such as if they need additional training or assistance regarding a particular aspect of their job. If employees feel like they own their actions, while also being able to trust management, they will start to seek out growth opportunities on their own volition: the fear of failure is mitigated in favor of smart, balanced learning that creates a winning situation for the company and the learner.

Trust goes both ways, and managers and employees alike must be willing to place themselves at the mercy of each other for guidance. Owning failure in this kind of relationship is a cornerstone of a strong organization.

Intervention: Consistency is Key

Often when business dialogue turns to holding an employee accountable, the topic quickly turns towards termination. While this certainly holds employees accountable, it can be expensive and difficult to maintain in the long run, as even an entry-level employee can cost more than $3,500 on average to replace. Employees definitely need to understand the consequences of their actions, but this understanding should be framed and used as a stepping stone towards improved performance rather than as punishment. The most commonly-used technique for this is progressive discipline, which involves regular critical, constructive feedback and opportunities to learn from mistakes before it turns to punitive measures or alterations in workflow.

Getting the most out of progressive discipline, however, requires consistency. In a 2005 dissertation survey of hospital professionals, nearly half of the respondents who added written comments noted that more defined policies and more consistent application of disciplinary standards would lead to an improvement in overall performance. These individuals also noted that improvements in consistency would lead to a much easier time rehabilitating employees who do not comply with company standards or who fail to meet expectations.

Technology can help maintain consistency in employee discipline. Using tools like CRM software can help you track an employee’s interactions with customers, leading to more clear-cut indications of when intervention is necessary. Technology can also assist in record-keeping regarding these interventions, making it easier to remember when an employee has needed a discussion in the past. By keeping solid records of both disciplinary conversations and overall performance, companies can reduce the burden of bookkeeping that’s inherent in accountability. Also, this data can be used to help guide employees towards personal success rather than into confusion and fear about whether or not they will keep their job.

Accountability In Practice

Being firm with employees can be tricky, and when someone consistently underperforms it can be difficult to intervene without feeling like a micromanager. When having a disciplinary conversation, stay clear, concise, and honest, as employees will typically respond better to this—especially if you provide clear instructions on how to improve their performance. There are times when this won’t be enough, and in these cases you may need to use other methods of potentially stricter discipline. This is as much an art as it is a science, since you must balance the benefits of the amount of time spent with intervention against the potential costs of finding someone better for the job.

If you have a hand in compensation, it is worth analyzing how people are compensated to search for causes of lack of accountability. One study conducted by Towers Watson showed that about a quarter of companies rewarded people who didn’t meet basic standards at all with bonuses. Incentives should always be reserved for people who meet the basic standards established by your organization—otherwise what is the point of having those standards at all? Rewarding employees for non-performance discourages high performers from trying, and it also perpetuates sub-par performance among people who aren’t putting their best foot forward.

Performance reviews provide a great opportunity to make sure employees know where they stand, including both their successes and failures. But these reviews shouldn’t be the only time that employees get this information. Remember that consistent and candid feedback is the only way to actively address a problem. As a manager, provide guidance and be weary to future obstacles that might block your employees from achieving business and personal success.

For Company-Level Failures

The final axis of accountability has more to do with management dealing with the world at large, rather than in small, daily interactions, but it’s no less important to a healthy company culture. When employees see the company at large not taking responsibility for major crises, or have the responsibility put on them, it can seriously sabotage morale and make a crisis even worse. Companies that try to avoid accountability for failures can lose the confidence of customers, potentially causing public outcry.

Crisis Management: Owning Trouble

When a company faces a crisis, employees and outside stakeholders alike expect someone to take responsibility for it. Taking this responsibility, however, involves opening a company up to liability and when a convenient scapegoat appears, it can be tempting to pass along blame. Outside observers who witness this sort of behavior will often meet any such attempt with scorn.

The most important thing a company can do is to have a plan in place that always makes clear its stance on ownership of a problem. Whether the organization makes an internal mistake or has troublesome parts from a supplier, it should communicate responsibility appropriately. Does the company care enough about its image and trust among its customers to assume responsibility for a broken product, even if that defect came about as a result of a third-party supplier or partner?

Companies that exhibit this sort of accountability are typically seen as endearing by the public, and they tend to make good business partners. Showing a willingness to shoulder the majority of a burden in a crisis makes it easier for other companies to commit to future deals and extend trust. This does require a business to assume somewhat greater risk in the event of a failure that stems primarily from a partner’s negligence—but this simply means that businesses should be prudent about who they choose to build lasting relationships with.

More Than the Minimum: Conduct Management

When companies do business globally standards change wildly from place to place, but customers often expect the best behavior (even in areas where legal mandates require less). Americans met the revelation that oil rigs in the Gulf of Mexico lacked safeguards used elsewhere in the world with outrage, even though the rigs themselves passed local law requirements. Accountability often involves more than simply meeting minimum requirements. While doing so avoids making waves, a company that does only the barest minimum can lose out in the court of public opinion when the barest minimum is not enough.

Managing conduct often starts with a code of conduct, which sets expectations for how employees should act when acting on behalf of the company. Rather than setting hard and fast guidelines, the best companies use what are called “imperfect duties” to provide standards while also empowering employees to act and make judgment calls. These imperfect duties include broad ideas, such as behaving consistently with local laws and providing a safe work environment.

These form baseline expectations for everyone in the company, and provide guidelines for when to intervene and adjust behaviors. The Harvard Business Review compiled a list of guidelines which many successful companies agreed to, presenting them as its Global Business Standards Codex (GBSC) in 2005.

A more recent Harvard Business Review study following up on the concepts of the GBSC also found that upper management often doesn’t see the gap between the ideals put forth in these codes and the way it does business every day. This “altitude effect” primarily applies to the way a company treats its employees, but in general, company leaders view the way their organizations behave with opaque glasses, and applies a burden on upper management personnel to be aware of what happens within the gears of their companies, as any significant issue will place them, rather than the company’s rank and file, in the public eye.

Skin in the Game: Executive Accountability

As customers become more insistent about ethics and accountability in the corporate world, showing that a company and its leaders are willing to face the consequences of their actions gets more important. Greg Michael Zipes, in a paper from the Journal of Business and Securities Law, has put forth a potential theoretical solution. Rather than calling for more legislation or regulation, this system of accountability relies entirely on self-governance.

The system focuses on personal accountability for executives, giving them strict liability for significant malfeasance. While Zipes does not put forth the idea directly, such a code could also apply, optionally, to failures of product lines or other massive-scale corporate failures. In his concept, companies would agree to and publicize a binding code of conduct, in which executives would lose a large portion of pay if the company is found guilty of a criminal count or fined a large sum of money. Companies would in turn publicize these binding codes, and make it clear to their customers that they intend to take responsibility for potential malfeasance.

Ideally, Zipes points out, such a code of conduct never actually needs to be invoked. Its mere presence is enough to spur better leadership and avoid circumstances in which it would need to be invoked. It also inspires confidence from partners and investors, showing them that the company is committed to principles of good governance like accountability, and can in turn lead to reduced borrowing costs or surging stock prices.

Accountability: A Way of Life

Even though accountability can sound like doom and gloom, it doesn’t have to be. A company that strives toward accountability in all of its interactions, at every level, can simply be a place in which everyone knows all responsibilities and works toward them to the greatest extent possible. By staying accountable in all aspects of practice, companies can build trust with consumers as well as within the organization.

Some final questions to consider:

  • What structures are in place to deal with customer complaints? Is there any record of customer complaints?
  • If a product or service meets with repeated complaints, what is done to adjust the customer experience?
  • Do you have a system for tracking the overall number and nature of customer messages that come to the company? Can you compare between years or quarters and assess what is working or failing?
  • How much trust do you place in employees? Do they have the freedom to handle issues and complaints as they arise?
  • Are there conditions under which an employee can lose a bonus? If so, are they enforced consistently?
  • How consistently do team leads and management personnel intervene when an employee isn’t performing up to par?
  • Do employees regularly hear about how they’re doing, or are issues only discussed during performance reviews?
  • What are the first steps of the company’s crisis management plan? How readily does the company take ownership of possible failures or crises?
  • How readily can the company contact those affected by a crisis or event and make amends?
  • What happens to management in the event of a major crisis? Are there consequences for failures of leadership?

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