In any organization, who is the single person accountable for the results of that organization? That’s easy. It’s the CEO. The CEO is engaged by the organization’s Board to operate. The Board delegates accountability and authority to the CEO so she/he can engage the resources necessary to accomplish the specified objectives of the Board. Unfortunately, where accountability tends to falter is in the translation from the CEO down through the rest of the organization.
So where does accountability come from? It is rooted in the legal framework of the organization. In the private sector, shareholders come together and elect a Board of Directors. In the not for profit sector, a membership as defined in the organization’s charter elects a Board. In any case, the Board is charged with creating and implementing a strategy for getting a return on investment. The Board can set the strategy, but it can’t implement the strategy. It hires a Chief Executive Officer (CEO) who they hold accountable for ensuring that the strategy is carried out. In that role, a CEO has a complex array of deliverables for which he is held accountable.
Ensuring a Framework of Accountability and Authority
One of the CEO’s primary objectives is to ensure that the right framework of accountability and authority is in place throughout the organization. In the same way that the Board cannot implement the strategy, the CEO needs to put in place a staff organization. The staff organization needs to operate within a framework. In organizational design, this starts with the vertical alignment of positions throughout the organization. This framework creates the mechanism for doing work:
- Who Reports to Whom?
- Delegation of accountability and authority
- What are People Accountable for Producing?
- Appropriate delegation of right-sized objectives cascaded throughout the organization
- How are Decisions to be Made?
- Articulation of the explicit context and boundaries for decision-making
- Are the Right Supports in Place?
- Provision of support and delegation of resources for doing the work
The Importance of Cross-Functional Accountability
A successful CEO crafts a complex web with a chain of accountability and authority that goes down through the organization, but also spreads across the organization. Cross-functional accountability means employees know how to work with people who aren’t their managers or their direct reports, but who are colleagues from different parts of the organization. This clarity is critical for managers to know not only how work takes place, but also who is accountable for doing it.
Using Managers Effectively
While it’s important that CEOs work to set up this framework, it’s even more important that managers know how all the pieces fit together, that they are effectively delegating the right work to the right people, and that they clearly communicate these lines of accountability to all subordinates. In times when the economy is strong, growth is high, and people are available to hire, it’s easy for organizations to assume that a decent return on investment means everything is okay. The truth is, in the absence of an accountability framework and with a lack of appropriate delegation, organizations aren’t using managers as effectively as they could be, wasting resources and essentially, leaving money on the table.
From a human resources perspective, the good news is, performance management systems are helpful, and without them, we’d most likely be in worse shape. But until we learn to tie these management systems to accountability and authority, where everyone understands their work and how it contributes to the organization going forward, we still have work to do.