It may sound like heresy in corporate America to say that results don’t matter, but they don’t … if you don’t understand what drives results. Too many executives focus on results without taking the time to understand what drives those results and to reinforce those drivers in their managers and employees. And, contrary to popular belief, results are not about hard work and effort (although those are critical factors in any success equation); results are about working smarter and understanding how your team’s behaviors, actions, and measurables contribute to their success or failure.
This is a mentoring and coaching issue more than an accountability issue. Too many executives take the easy route and just complain that their managers and teams are not meeting their goals and objectives and blame it on lack of accountability. But they have not taken the time to identify the key behaviors, actions, and sub-goals that will result in success at the larger level. This is the responsibility of executives. Most managers and teams cannot appreciate the complexity that comes with trying to “be profitable” on a corporate scale. There are just too many factors to consider: sales variations from month to month, monthly cost variables, macro-economic trends, inventory swings, overhead cost allocations, business unit allocations, healthy and unhealthy cannibalization between business units, cyclicality, known and unknown competitor actions, etc. And these are all excuses waiting to happen… and excuses are the death of a company.
Successful executives take the time to work with their managers and teams to identify the controllable actions, behaviors, and measures that they want their managers and teams to be responsible and accountable for. These controllable actions, behaviors, and measures, if executed across every facet of the business, should lead to the higher-level corporate goal (typically profitability or cash-flow). And they mitigate most opportunities for general, ambiguous excuses from managers.
If the company does not achieve its higher-level goals then one of three things has happened: (1) the managers and teams did not deliver on their controllable actions, behaviors, and measures; (2) the controllable actions, behaviors, and measures were not, in fact, the correct ones to affect the higher-level goals; or (3) other factors intervened. We can learn something different, and critically important, from each of these three different potential outcomes.
First, if the managers and teams did not deliver on their controllable actions, behaviors, and measures then it should be clear to everyone, including the managers and teams themselves, that they failed. And this is a crucial point. The controllable actions, behaviors, and measures should be so clear, fundamental, and directly controllable that there is little, if any, room for excuses. Of course the goals need to be created in an intelligent manner. For example, goals need to be set so as not to be contradictory with one another (decrease headcount but increase production) and so as to recognize that other intra-period activity can influence the outcome. For example, if the goal is to decrease finished goods inventory through a concerted sales effort but the production department produces more than forecast, then the sales team might have had a stellar sales month despite the fact that inventories rose that month.
A mature executive team recognizes and works with these nuances. Additionally, a mature executive team is also adept at breaking problems or challenges down into component root causes. This is critical in setting controllable actions, behaviors, and measures because if the team sets an overly broad, arbitrary goal without understanding what the true drivers or root causes of a business problem or challenge are then they will almost surely not result in the required outcome. This is the second outcome that can occur: the controllable actions, behaviors, and measures were not, in fact, the correct ones to affect the higher-level goals. And the only people to blame in this instance are the executive team – it is truly a failure of leadership, mentoring, and coaching. This is like saying that our baseball team is losing because our pitchers are giving up too many runs and therefore we need to get better pitching. But the coaches failed to validate whether the runs were earned or unearned; whether the problem was with our starting pitching, middle-relief, or closers; or if the real problem was with our hitting if we looked at proper benchmarks for our pitchers. The last thing we want to do is go out and replace all of our starting pitchers if the real problem lies elsewhere – we might only be exacerbating the problem.
This is the most exciting part of the game (errrr…work): problem solving the root causes of what is driving failure. Too often, executives come up with superficial root causes, or focus on irrelevant or unrelated root causes, and play the blame game. In my experience, the primary reason for failure is that the managers or teams are focused on solving the wrong problems that will not result in the desired results. This is what makes business (and sports) so interesting. You get to take the learnings from last month or week, or last game, and try another approach to solve the problem… if you have the courage to recognize that it is not always about execution…but about operational strategies…which the executives or coaches have to determine.
This is often referred to as “learning to learn”. It is the foundation of all successful people and organizations. This is the power that comes with a true learning organization: we might not get the results we wanted…but the more important questions are: what did we learn and what are we going to do differently this time? If you can reach this level of self-awareness and leadership and eliminate the politics that comes with an organization that blames rather than learns and teaches and an organization that obfuscates rather than delivers meaningful, timely, actionable financials and metrics then your organization has a foundation for success.
Organizations with these attributes celebrate failure rather find fault and blame and are positioned for growth and continuous improvement. Failure is recognized as an integral part of learning, experimentation, and risk-taking. When people and teams are blamed for failing, rather than praised for learning and improving, it has a severe chilling effect on all future risk taking and innovation. And worse, it destroys morale, commitment, and the confidence required to lead through difficult times.
This is not about celebrating mediocrity nor about tolerating sustained failure. Quite the contrary…when executive teams fail to create an atmosphere that encourages understanding, introspection, and learning they create and foster mediocrity and failure. There is no other outcome, unless you believe in luck. Aiming for good business results without understanding root causes, is like raising children without understanding what good parenting is. If your children turn out well, you can only attribute that to good fortune. If your business succeeds without good root cause analyses you are only lucky, and in the long run that is not sustainable.
I mentioned earlier that there is a third possible driver in why a manager, or team, did not achieve the results they intended to achieve: other forces could intervene. It is the great fallacy of our sophomoric, unenlightened minds to believe that we control our destiny – for we do not. We can only control our actions and behaviors; and sometimes despite our best efforts and despite the fact that we chose the correct actions and behaviors, life intervenes and everything does not go as planned. That is the beauty of life: we cannot control what life brings to us; we can only control how we respond, or how we choose to act and behave in response to life’s surprises.
Mature businesses recognize that this is a distinct possibility and, thus, they are most interested in assessing the competencies and capabilities of their managers and teams in the context of the possible depth of the learning and understanding that comes from failure and that could lead to better actions and behaviors in the future.
Excellent executives and corporate boards (and sports team owners) recognize that getting results is a learning process. And ironically, when you have the right people who are self-aware, apolitical, and realize that failure is good; who are managing to the right processes which imply learning from experience and continuously improving; and who are measuring the right controllable actions, behaviors, and goals… the results will take care of themselves.
These executives and boards hold themselves accountable first and ask honestly: (1) have they set the correct controllable actions, behaviors, and measures with their managers and teams? And (2) are they working with their managers and teams to learn from failure and to continuously improve? (3) Have they created an apolitical environment in which their people can learn, grow, and succeed?
This is the true nature of leadership and coaching. You are as much responsible for the success of your company or team as your employees or players are. Are you creating an environment for them to succeed?