{"id":7535,"date":"2019-08-15T19:55:59","date_gmt":"2019-08-15T19:55:59","guid":{"rendered":"http:\/\/somametrics.com\/clone\/?p=7535"},"modified":"2020-03-06T21:01:26","modified_gmt":"2020-03-06T21:01:26","slug":"accountable-leadership-in-a-high-performance-culture","status":"publish","type":"post","link":"http:\/\/somametrics.com\/clone\/accountable-leadership-in-a-high-performance-culture\/","title":{"rendered":"Accountable Leadership in a High-Performance Culture"},"content":{"rendered":"\n

Management often makes the mistake of measuring the performance of individuals based on the belief that strong personal performance leads to strong corporate performance, rather than focusing on accountable leadership. This is true only when management understands all the dynamics in the organization that lead to successful business outcomes, and when the business environment is stable. However, even the most casual observer immediately recognizes that usually neither of these assumptions is true.<\/p>\n\n\n\n

Companies that want to build high performance cultures must focus on organizational performance and accountable leadership, not personal performance. By setting clear organizational metrics, the individual performance metrics will fall into place quite easily.<\/p>\n\n\n\n

This is\nillustrated best by case studies, not an abstract line of reasoning.<\/p>\n\n\n\n

BioPlus Specialty Pharmacy<\/em><\/strong><\/p>\n\n\n\n

Let\u2019s look\nat BioPlus Specialty Pharmacy. Its medicines are expensive; they treat rare,\ncomplex diseases. Although the company enjoyed stellar growth, it was not fast\nenough for the president. He knew the company could grow even faster, but he\ndidn\u2019t know how to do it.<\/p>\n\n\n\n

Rather than\ntrying to figure out a solution himself, the president pulled together a team\nof trusted advisors who wrestled with the issue for a few months. They\neventually realized that the roadblock to faster growth was quite simple: the company\nneeded to be able to process new orders in a couple hours rather than a few\ndays. This one change \u2013 which measured the quality of its service, rather than\nits products \u2013 proved pivotal in leading to an even greater growth rate. <\/p>\n\n\n\n

The\nchallenge in finding a solution was in deciding what to do and how to do it.\nThis solution was easy to measure at the corporate level. It also led to\nspinoff metrics for staff along the way \u2013 and those staff always understood how\ntheir efforts contributed to the organizational objective.<\/p>\n\n\n\n

Through\nimplementing this solution, the company grew over 400% in three years.<\/p>\n\n\n\n

Abbott Laboratories and Amgen<\/em><\/strong><\/p>\n\n\n\n

Abbott\nLaboratories is another excellent example of how accountable leadership\nfostered a high-performance culture.[1]<\/a>\nAbbott hired a financial officer, Bernard Semler, who specifically used\naccounting mechanisms to drive cultural change. He called his approach Responsibility\n<\/em><\/p>\n\n\n\n

Accounting<\/em>. This approach tied every\nexpenditure back to a specific manager. Each manager was held tightly\nresponsible for his or her return on investment. Each manager agreed to be held\nresponsible for a clear set of objectives during the coming year as well as the\nbudgets to achieve those objectives. These managers were encouraged to be\nentrepreneurial in how they used their budgets. But deviations from the\nagreed-upon objectives were not tolerated. This created a culture that required\nstrict adherence to financial responsibility, while at the same time it\nencouraged highly divergent thinking and truly creative work.<\/p>\n\n\n\n

When George\nRathman left Abbott to found Amgen, he applied Responsibility Accounting<\/em>\nto his new company with the same rigor to create the same culture. What\nhappened next is staggering: within 20 years he built Amgen into a $3.2 billion\ncompany with a staff of 6,400. Its stock grew by a factor of 150 times from its\nIPO price and its stock appreciation was 13 times better than an investment in\nthe general stock market. Rathman clearly built a high-performance culture by\nimplementing strict adherence to accountability. <\/p>\n\n\n\n

Hewlett-Packard<\/em><\/strong><\/p>\n\n\n\n

Hewlett Packard is recognized as one of the pioneers in what eventually became the Silicon Valley phenomenon. Long before the notion of culture was popularized in the management literature, HP was organized in a highly decentralized structure. The company gave each division manager full responsibility for running their operation as a small business \u2013 including full P&L responsibility.[2]<\/a> This may have been one of the first times a high technology company applied the notion of accountable leadership to senior managers.<\/p>\n\n\n\n

But was HP\na high-performance organization? To answer that, let\u2019s look at its track\nrecord: After incorporating the company in 1947, its sales jumped from $679,000\nthat year to $5.5 million in 1951, only four years later. Eight years later, in\n1959, the company established an overseas presence with a marketing\norganization based in Geneva and a manufacturing facility in Germany. By 1970\nits sales reached $365 million. 15 years later \u2013 1985 \u2013 its sales were at $6.5\nbillion with 85,000 employees. The company had developed a very\nhigh-performance culture \u2013 and its founders credit their corporate success to a\nlarge extent to holding their leaders accountable for their results, not their\nactivities.<\/p>\n\n\n\n

The Take Away: Accountability is Non-Negotiable<\/em><\/strong><\/p>\n\n\n\n

At the risk\nof overstating the obvious, accountability at every level is essential to building\na high-performance organization. It is not optional. At the same time, our case\nstudies highlight that accountability for results is not incompatible with\nmanagement freedom or restrictions on creativity. Top performing companies usually\nurge their managers to be highly creative and take risks \u2013 but to do so within\na framework that holds them fully responsible for the outcomes the managers\ncommitted to originally.<\/p>\n\n\n\n

Top\nperformers like to be measured \u2013 if the measurements make sense to them and\nrelate to outcomes that truly impact the well-being of the company. But if the\nmetrics are activity oriented rather than results oriented, they are quite\nlikely to \u201cgame the system\u201d to \u201chit their numbers\u201d without regard to the things\nthat are truly important to customers, investors, employees, and other stake\nholders.
<\/p>\n\n\n\n

\n\n\n\n

[1]<\/a> Good to Great: Why Some Companies Make the Leap\nand Others Don\u2019t<\/strong>,\nJim Collins, 2001<\/p>\n\n\n\n

[2]<\/a> The HP Way<\/strong>, David Packard, January 3, 2006<\/p>\n","protected":false},"excerpt":{"rendered":"

Management often makes the mistake of measuring the performance of individuals based on the belief that strong personal performance leads to strong corporate performance, rather than focusing on accountable leadership. This is true only when management understands all the dynamics in the organization that lead to successful business outcomes, and when the business environment is … Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":6263,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"generate_page_header":""},"categories":[1],"tags":[],"yoast_head":"\nAccountable Leadership in a High-Performance Culture - SOMAmetrics<\/title>\n<meta name=\"description\" content=\"Companies that want to build high performance cultures must focus on organizational performance and accountable leadership, not personal performance.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/somametrics.com\/clone\/accountable-leadership-in-a-high-performance-culture\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Accountable Leadership in a High-Performance Culture - 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