Wednesday, August 5, 2009

Responsibility, Accountability, and Teamwork

Most employees are responsible. Employees will do their job well, (at least they think they are doing a good job.) Employees generally feel responsible. These feelings of responsibility are feelings of obligation, and are pretty much instilled in all of us since childhood.  So why aren’t these employees measuring up? Well, we need to look first to accountability and then past the individual to the team and processes.

Remember you and your employees are in business not busyness. Busy work is not the work of business. Doing the wrong things well helps no one. So responsibly doing busy work is worthless.

So what is the answer? We all need to be held to account to do the work that needs to be done. And that is what accountability is all about. Accountability occurs when managers specify what they want subordinates to produce (quantity, quality, time and resources), judge how well the subordinate worked and thereby manage the employees. A manager may be reluctant to have the hard conversation, but part of the manager’s job is to ensure that  employees are being productive. Human beings are of course social animals. So management must never tolerate or allow bad behavior to be rewarded; think of it as a moral issue for management. No retailer would ever think of using an open cash draw instead of a cash register. An open cash draw rewards bad behavior.

Beyond the individual, most work is done in teams. Again, almost all employees strive to be a part of a winning team. The main inhibitors of teams are unclear work processes, bad incentives, unclear decision making, bad communications and/or lack of knowledge of how the rest of the firm works.  Almost all of the problems and issues happen at the margin or transitions--the handoffs, decision points, approval points etc. If you really want to improve employee performance, look at what happens between the teams. Now as the financial crisis on Wall Street shows, the bad incentives can really mess up ever the most profitable business. Well done financials can, of course point the way.

Fix the process, particularly the incentives and many employee problems take care of themselves.  FedEx is a good example. Here is what Charles Munger, Warren Buffett’s partner said…”the Federal Express system requires that all packages be shifted rapidly among airplanes in one central airport each night. And the system has no integrity for the customers if the night work shift can’t accomplish its assignment fast…”  Federal Express could not get the night shift to get the packages out on time.  “They tried moral persuasion. They tried everything in the world without luck. And, finally, somebody got the happy thought that it was foolish to pay the night shift by the hour when what the employer wanted was not maximized billable hours of employee service but fault-free, rapid performance of a particular task. Maybe, this person thought, if they paid the employees per shift and let all night shift employees go home when all the planes were loaded, the system would work better. And, lo and behold, that solution worked.”  (from an article “The Psychology of Human Misjudgment”).