September 9^th, 2003

No one should be above accountability

Gene Mage

Today’s column is the third in the series, Nine trends that are going to rock your world. So far we have covered how new technology and employee ownership are changing workplace attitudes. Today we take the elevator to the top floor to take a breath of the rarified air in the executive suite.

This coming week NBC is going to be airing a documentary on the demise of MCI Worldcom. While we relish the opportunity to watch a verbal sword-fight between former MCI CEO Bernard Ebbers trying to rebuild his public image, and a team of reporters trying to further tarnish it, we might also watch for some more practical content.

The Enron/Global-Crossing/MCI Worldcom/Arthur Anderson scandals were the natural outcome of executives violating the principle of accountability. I define that principle as follows, “Most of us would rather do the right thing than stand in front of people we respect and tell them that we let them down.”

The principle of accountability works. It creates a counterbalancing social pressure upon the individual to offset the always present temptation to compromise. We might be tempted to take a drink, but never to let down our peers at AA. We might be tempted to drop our weapon and run, but never to abandon our buddies.

But in the boardroom accountability is hard to find. Board members live within a complex web of interdependent relationships upon which they depend for reputation, income, and social status. To confront a colleague, whom you probably hired to do the job of CEO or CFO, with a charge of wrongdoing carries with it no small personal risk.

Layered on top of this social pressure is a powerful financial incentive to look the other way when results are good. To be sure, if the company misses the numbers the board will suddenly muster tremendous courage and clarity to address the problem. But the unwritten rule of business is that if someone is hitting the numbers you do not give them a hard time.

So who holds Senior Executives accountable besides God and conscience? Ultimately the board, the employees, the stockholders and the community will demand accountability if things fall apart. But in the midst of a tough ethical dilemma most of us do not entertain thoughts about what might happen if we get caught. Rather, we rationalize. We create plausible, logical, but fallacious reasons to excuse doing what we really want to do anyway.

Accountability “short-circuits” the process of rationalization by bringing in the eyes of an objective third party. Impartial oversight of corporate boards has already been legislated in the wake of accounting scandals. But even that formal structure will not be foolproof.

Leaders must ask for accountability and build it into their day to day work. Here are some elements of effective accountability to consider:

1. Live transparently. One CEO I work with defines integrity as, “Never being afraid of other people knowing what you are doing.” He also notes that if you do something and hope nobody finds out, you can bet somebody will eventually find out.
   
   
2. Cultivate relationships. Find a small number of people you can really trust and empower them to ask you tough questions. Meet with those people regularly. Insist on total honesty. Many top level executives have scores of acquaintances and sycophants but few real friends who will tell it to them straight when they screw up.
   
   
3. Be open to criticism. Subordinates are experts at filtering information before it flows upwards to leadership. While we can hope in our heart of hearts that people will be open and honest with us even though we punish those who dare speak bad news, we are asking too much. I find it fascinating how managers must exercise extraordinary emotional maturity in order to rise to the top, yet upon arriving there immediately revert to the behavior of a tantrum-throwing six-year-old if they don’t get their way.

Syndicated columnist Gene C. Mage is author of the book Managing for High Performance. For more information on Nine trends that will rock your world visit www.makingitwork.com.