Infusing Corporate Culture with Accountability

If you are a fan of Simon Sinek, you will understand and probably agree with the thrust of this posting. Sinek is a great motivational and business speaker. Many of his observations are spot-on and I would urge you to review some – here are some samples (here, here, here, and here).

Getting back to the importance of accountability in a corporation, let’s start with some important principles for ethical culture as explained by Sinek and others. A company is successful in the marketplace, not because they sell a terrific product and/or service, but in a much broader sense, because of its actions, beliefs and communication of its set of principles, values and beliefs.

Sinek, for example, points out this basic point in this lecture (here). Apple, for example, does not market itself as a great provider of computers, but has a much broader message — “We challenge the status quo.” Consumers who are attracted to that message, purchase the Apple computer, and are proud of their association with the Apple Company because they believe in the same message about themselves – they challenge the status quo.

A company’s culture reflects its values, principles and beliefs – I now that sounds a little amorphous and touchy-feely, but there is a point here. Employees want to believe in their respective organizations and leaders. They want to believe that their leaders are ethical and worthy of admiration.

When it comes to the relationship between employees and leaders, company leaders, like employees, have to be held accountable for their performance and conduct.

What do we mean by accountability? It is not as simple a concept as being disciplined for misconduct. That is a very limiting approach to the importance of accountability. It is a much broader approach, which encompasses positive and negative consequences.

Accountability is based on a bargain or understanding in an organization. In order to reap the benefits and awards of superior performance, corporate leaders and employees have to agree to accept the responsibility for poor performance or mistakes made in the course of carrying out their duties. When there is a breakdown in this fundamental bargain between an organization and its leaders and employees, a corporate culture is undermined by cynicism.

A corporate leader who reaps the benefit of positive corporate performance, has to acknowledge and be held accountable for poor corporate performance. There cannot be a disconnect between these two important principles.

In the corporate culture world, however, CEOs are treated like superstars – pay has increased dramatically over the last 20 years, and few, if any senior executives have been held accountable in any meaningful way for poor corporate performance. This perception has been exacerbated by the fact that corporate leaders escaped criminal prosecution for their respective roles in the financial crisis of 2008. All of these trends have undermined any consistent application of accountability.

In its place, companies have had to struggle against the perception that senior leaders are never held accountable, while mid-level managers and employees are often disciplined for corporate misconduct. The old adage applies in the compliance world – when senior leaders mess up, mid-level managers and employees receive additional training.

Cynicism can quickly undermine corporate values, principles, and performance. It is a cultural influence that corrodes and ultimately creates an environment in which misconduct risks increase and corporate performance declines. A company can fight this threat by adhering to a simple, but powerful message – we are all accountable for our accomplishments as well as our failures.

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