CHAPTER 10 Make Leadership Accountability a Priority in Your Company
Most CEOs I work with express frustration over the lack of accountability they see in their organizations. I find this is especially true of CEOs new to their companies. They usually arrive with a mandate to drive transformational change. They know they will need leaders to step up in new ways to drive success. However, after they spend time getting to know the state of their organization, they realize there are many leadership accountability gaps. The gaps may exist with the executive team or leaders at other levels of the organization. At other times, they recognize that the human resources function isn’t doing its job. Unless they address these gaps, progress will be difficult. However, addressing leadership accountability gaps effectively requires commitment on the part of the board, the CEO, the CHRO, and other senior executives. This chapter explores how these leaders must work together to drive success.
Leadership Accountability—the Critical Business Issue
In my experience, leadership accountability is a new business issue that many companies are beginning to understand. As a result, there is high variability in whether companies are thinking about it, discussing it, and ultimately doing something about it. I’ve learned that many stakeholders must step up. If they don’t, it will be hard to achieve success. For example, in one company, the CEO made leadership accountability a priority. He single-handedly tried to push this into his organization; however, progress was slow because other leaders in the company were not on board. One person can create a spark, but you need a whole community of leaders to drive sustained impact, even if that one person is the CEO. I’ve also seen cases where the head of human resources is the champion for leadership accountability, but the senior executive team is neither interested nor engaged. In these cases, very little progress happens.
The first step, then, is to help key stakeholders understand their accountability. We will start by examining what this looks like from the perspective of the board, the CEO, the senior executives, and the HR function (see Figure 10.1).
Figure 10.1 The Critical Roles Needed to Build Strong Leadership Accountability
The Role of the Board
I was chatting recently with the director of a board of a global engineering company. She had served on the board when the company had experienced a significant financial scandal. It was a “nightmare” and “disaster” for the company—her words. It consumed the directors as they were overseeing the aftermath and engaging in damage control. She described it as a trying and stressful period, something she would never want to experience again in her life.
Boards that have had to deal with scandal, misconduct, or corruption on the part of senior executives know the costs and reputational damage that can occur. These issues fall squarely on the board to address and resolve.1 Increasingly, boards are therefore assuming greater oversight of leadership accountability and culture.
A recent report produced by the National Association of Corporate Directors (NACD) states that culture is a unifying force and, when it is healthy and robust, it will positively reinforce the strategy and business model of an organization.2 In contrast, a dysfunctional or weak leadership culture can undermine strategy execution and thereby create significant risk for a company. Boards need to think about leadership accountability in the same way—as a risk issue requiring their oversight. If leadership accountability in an organization is weak, this creates risk for the execution of the business strategy, the ability to attract and retain the best talent in the industry, and the reputation of the company.
Drawing on my conversations and work with boards, I believe they need to pay attention to the following areas:
Hire a CEO who is an accountable leader. One of the primary responsibilities of a board is succession and ensuring the selection of the right CEO for the company. They typically look for a proven track record, industry experience, key relationships with external stakeholders, and several other essential capabilities and traits. Boards also need to assess whether the individual is an accountable leader at a personal level.
Encourage the CEO to be accountable for leadership accountability. The board then needs to ensure that the CEO pays attention to leadership accountability and makes it an organizational priority. The board and CEO need to engage in conversations about the leadership accountability of the organization. The CEO must share relevant information and metrics on the state of leadership accountability for the organization. They need to also engage the board in helping to shape the thinking around the leadership expectations for the organization.
Recruit new directors to the board who are committed to being accountable leaders. Boards will increasingly be looking to recruit new directors through the lens of leadership accountability. They will need to ensure that directors are personally committed to being accountable and setting the tone for the board and the rest of the organization.
Ensure the board has a director with solid human resources experience. Many boards struggle to fully appreciate talent, leadership, and human resources issues, as they typically do not have a director with depth and expertise in these areas. Having a director they can rely on to bring knowledgeable perspectives on how to think about these crucial issues is invaluable.
Ensure the board sets the tone for the rest of the organization. I recently interviewed the chair of the board for a large higher education institution. I was working with them to create a company-specific leadership contract. In my interview with the chair, I asked whether the board saw itself as being part of the organization’s leadership. He paused and said it was a great question, and he didn’t know the answer. He speculated that some directors did, in fact, see themselves as leaders and part of the organization’s leadership. He also knew that others did not. The question and our discussion prompted him to have this conversation with the other directors. Directors are increasingly being expected to step up and set the tone of leadership accountability for the rest of the organization.
The Role of the Chief Executive Officer (CEO)
CEOs must make leadership accountability a priority and see it as part of their efforts to leave the organization in a stronger and better place than they found it. Here are some strategies to consider:
Demonstrate strong leadership accountability at a personal level. The CEO must be an example to all the leaders and employees of the organization they lead. I have found that when the CEO isn’t accountable personally, it creates havoc at other levels in the organization. At the same time, when the CEO is accountable and holds others accountable, a positive ripple effect takes hold across the organization.
Hire a strong head of human resources. I believe hiring the right person to lead human resources may be the most crucial decision a CEO ever makes. Unfortunately, this isn’t always a strength for some CEOs. Of course, it’s essential to look for candidates with a depth of human resources expertise—that’s a given. However, it is also vital that they demonstrate strong leadership accountability at a personal level, and that they can partner with the CEO, the board, and the executive team to put practices in place that help build strong leadership accountability. I’ve seen too many companies limited or even crippled by weak and mediocre human resources leaders and teams.
Build a truly accountable executive team. I’ve talked to many CEOs who admit that building a truly accountable executive team is one of the toughest challenges they face. When a CEO can build an accountable executive team, amazing things happen across the organization. The clarity, the commitment, and the alignment they demonstrate set a powerful tone that inspires employees and creates confidence in everyone’s ability to drive success. When the team is mediocre, terrible, or even toxic, then a CEO doesn’t have a chance.
Set clear leadership expectations and pay attention to your leadership culture. We have already explored the importance of having a strong leadership culture, and the CEO must be vigilant in ensuring it is robust and healthy. It’s about creating clear leadership expectations for all leaders. You can do this by creating a company-specific leadership contract. It’s also about building a community of leaders across the organization. Finally, it is about having the courage to have zero tolerance for bad behavior and misconduct.
The Role of the Senior Executives
As we just discussed, the CEO plays a critical role in making leadership accountability a priority in the organization. These efforts get amplified when senior executives and the extended leadership team (usually the direct reports of the executive team) also rally around to support the CEO. Let’s look at the strategies to consider:
Demonstrate strong leadership accountability at a personal level. Just like the CEO, all senior executives and leaders must step up as accountable leaders. I find that many senior executives do not fully appreciate how much they set the tone for the behavior of other leaders and employees.
Build truly accountable teams. The senior leaders need to be seen to work well with each other. They must also build accountable teams within their divisions, functions, or departments. As we discussed earlier, when employees observe the top leaders setting the right tone and working effectively together, this significantly increases their level of engagement.
Address leadership accountability gaps. Senior leaders must be vigilant in addressing leadership accountability gaps within their departments, functions, or divisions. They need to ensure their leaders do their job in stepping up and holding others accountable for being leaders.
Ensure the extended leadership team sets the right tone for others. As we learned earlier in this book, when employees see their senior leaders working well together, it has an immediate impact on their engagement. The extended leadership team has a critical role to play to set a positive tone for the rest of the organization. Everyone looks at them to see the extent to which they are accountable, and that they are leading effectively and working together to deliver results. When this isn’t happening, it undermines everyone’s sense of engagement and commitment, as well as their willingness to step up and be accountable.
The Role of the Chief Human Resources Officer (CHRO)
The head of human resources has a pivotal role in helping an organization build strong leadership accountability. As I described above, when a company has a strong HR leader in place, amazing things happen for the organization. When the HR leaders are weak or mediocre, little progress is made. Here are some suggestions to pay attention to:
Set the tone at a personal level. Much like the CEO, the CHRO must demonstrate accountability. I find that the expectations for HR leaders are often even higher than for the CEO in many respects. As the leader of the people function of an organization, employees expect the top HR leader to be above reproach, to be the guiding light, and even be the conscience for everyone else. It’s a significant obligation, but this is what it means to be a HR leader in today’s world.
Build a truly accountable HR team. Too many times, I find that some CHROs are not viewed as effective leaders by others in the organization. It is unfortunate, and it serves to undermine any attempt to do good work. Just as the CEO must build a truly accountable executive team, so too must the head of HR. The expectations are high for all HR leaders.
Encourage senior executives to address weak and unaccountable leadership on their teams. Heads of HR can play a crucial role in helping senior executives address weak leadership in their teams, functions, or divisions. Many executives may shy away from this work. Some expect they can delegate it to the HR function. HR leaders need to resist this and support senior leaders in doing their jobs. When the CHRO sets the right tone and is a trusted adviser, executives do a better job of coming to terms with the accountability gaps that exist on their teams.
Ensure the organization commits to creating clear leadership expectations. If the CEO isn’t addressing this at a personal level, then HR must take the lead. The next chapter will explain how to do this, but HR leaders can create tremendous value for their organizations when they support a process to set clear leadership expectations. The next chapter will explain how to do this by creating a company-specific leadership contract.
Establish a balanced compensation strategy. The CHRO must work with the CEO and the board’s compensation committee to ensure that the strategy is balanced. By balanced, I mean that leaders are compensated both on the what and the how of leadership. The what is about measuring and compensating leaders for their ability to deliver desired business results. The how is about measuring and compensating leaders on how they step up as leaders, building strong leadership accountability and a strong culture across their teams and organization.
Provide metrics to the board. The CHRO needs to regularly provide metrics to the board on the state of leadership accountability and culture within the organization. Also, HR needs to provide metrics on the state of the organization’s leadership culture. These are vital to help the board and CEO not only understand these critical business issues but also be ready to discuss the risk implications should there be weakness evident in the data.
Make sure your team does not enable mediocre leadership. I’ve seen too many examples where well-meaning and well-intended HR practitioners enable leaders to be mediocre. How? They jump in and do the hard work of leadership on their behalf. These mediocre leaders get used to it and in turn wimp out and avoid doing the hard work themselves. They rely on their HR business partners to have the tough conversations with poor performers, to give candid feedback, or to intervene to manage conflicts between colleagues. If your HR team is doing this, have them stop. Even though they think they may be adding value and serving their internal customers, the reality is that they are not. HR needs to be a sounding board for leaders to help them do their jobs and tackle their own hard work.
Implement practices to help drive strong leadership accountability. The HR team must work to create and implement several practices that help ensure the organization has strong leadership accountability. Throughout the remaining chapters in this section, we will explore the practices that the HR team can implement.
It is vitally important to be explicit in how the board, the CEO, senior executives, and the CHRO need to think about their roles in building strong leadership accountability. Figure 10.2 presents a set of Gut Check questions that can be used to help bring this level of clarity within your organization.
Figure 10.2 Gut Check Questions to Help Make Leadership Accountability a Priority
Once the decision is made to see leadership accountability as a critical business priority, then it’s essential to understand where you stand as an organization. That’s what we will explore next.
Conduct a Leadership Accountability Audit
Once an organization is committed and has made leadership accountability a priority, it is crucial to understand the current state of leadership. An ideal way to do this is by conducting a Leadership Accountability Audit.3Figure 10.3 presents the questions for the audit. As you review them, reflect on the current state of your organization. If you prefer, you can visit www.drvincemolinaro.com to download this Leadership Accountability Audit and other resources.
What insights did you gain based on your responses to the Leadership Accountability Audit questions? Where is your organization demonstrating strength? Where are the weaknesses and gaps that need attention and action? How can you go about engaging others in conducting this audit? Below are some suggestions for you to consider:
Engage the executive team. Involving the senior executive team in conducting the Leadership Accountability Audit is an excellent first step. Their results will give you a good sense of how they are thinking about this issue and areas you may need to address.
Engage the extended leadership team. Some organizations engage a broader group of leaders in completing the audit. Your organization’s extended leadership team is an ideal group. Typically, they represent the direct reports of the executive team and should have a good read on the functions they lead. This will give you a complete picture of where your organization stands.
Tap into middle and front-line leaders. I have also had clients engage with a smaller group of middle and front-line leaders to get their perspectives. The Leadership Accountability Audit can be sent out as a survey or conducted through a set of focus groups. Engaging leaders at this level usually provides excellent insights and a more granular perspective on the issues and opportunities to address.
Aggregate the data. Summarize the results of your audit. Identify the areas of strength that can be better leveraged to build strong leadership accountability. Then identify the gap areas that need immediate attention. Now you are ready for the next critical step—to share the findings with key stakeholders.
Lead a Strategic Leadership Conversation
I’m often asked to come in and speak with boards and senior executive teams on the topic of leadership accountability. It’s a great way to start what I would call a strategic leadership conversation. Having a meaningful dialogue with a board or senior executive team (or both) is critical.
For example, my team and I recently met with a longstanding client. The meeting included the head of HR and the leader of enterprise learning. They told us about a big meeting they had coming up with the senior management team. The CEO had asked them to spend 90 minutes providing an update on how the company was tracking on their learning and leadership development strategy. The CEO also wanted to learn what was new and hear about some hot topics in the field. We worked with them to design an agenda for their meeting.
Since they were looking to foster meaningful dialogue, they conducted the Leadership Accountability Audit with the senior management team and aggregated the results. Before the meeting, they sent a briefing document to provide a common foundation for the discussion. It included ideas from The Leadership Contract and presented some of the high-level findings from their Leadership Accountability Audit. The agenda for the 90-minute discussion was as follows:
Introductions and Setting Context (5 minutes). They began by reinforcing the context for a discussion about leadership and explaining how it connects to the existing set of strategic priorities. In the case of this client, the company had just made a significant acquisition, and cultural alignment was top of mind for the executives. As a result, the CHRO and head of enterprise learning anchored the discussion of leadership accountability to drive cultural alignment.
Review the Data from the Leadership Accountability Audit (20 minutes). They provided an update on their priorities and began to position the leadership accountability gaps they saw in their organization.
Facilitated Discussion (50 minutes). They began to ask a series of questions designed to engage senior management with the topic. Here are the questions they used:
Based on the data, are we confident that we have the leadership culture in place that will ensure our future success?
To what extent do we believe our leaders are fully committed to their roles as leaders?
Where is leadership accountability strong in the organization (explore strengths by level: front-line, mid-level, executive ranks)?
Where is leadership accountability weak in the organization (explore strengths by level: front-line, mid-level, executive ranks)? How might this create risk in delivering our strategic objectives?
Are we addressing mediocre and unaccountable leaders quickly enough? Do we tolerate (and therefore condone) leaders who misbehave and are misaligned?
What recommendations do you have to strengthen leadership accountability across the organization?
How can we strengthen the cultural alignment among the new leaders who have joined our company after the acquisition?
What will be our outcome measures of success? In other words, how will we know when we have strong leadership accountability in place across the organization?
Discuss Implications and Next Steps (15 minutes). They spent the remaining time considering any next steps stemming from the dialogue.
This session was a huge success. The senior management team confronted some of the gaps they found by completing the audit. They also realized they needed to do a better job at setting clear leadership expectations, especially to help drive cultural alignment. The outcomes of this discussion were positive, and it opened an opportunity for a similar dialogue with the board.
Based on the example above, think about whether you could use the same approach within your organization. You will most likely find it will spark a robust and meaningful dialogue, possibly even a much-needed healthy debate. In my experience, most senior management teams and boards rarely get the opportunity to engage in strategic leadership conversations. When they do, you will find they have plenty of valuable insights and perspectives to share. You may also find it worthwhile to repeat the leadership accountability audit every 12 to 18 months to gauge your progress in improving leadership accountability.
When you are ready to address the issues and act, review the ideas in the next three chapters of this book. They will provide a valuable road map for strengthening leadership accountability across your entire organization.
Final Thoughts
Working through the ideas and exercises in this chapter will give you much food for thought. You may feel daunted—you have a lot of tough conversations ahead of you. The questions may have opened up important discussions that you have never had or have been avoiding. Some of you may also feel daunted as you realize you may have a lot of hard work ahead to build stronger leadership accountability in your organization. In many ways, that is good news! You can’t improve your organization until you understand where it currently stands and where you may be falling short. The more you can get into a practice of engaging in these important and strategic conversations, the easier it will get. Remember it’s your obligation to your organization, leaders, and employees to tackle these issues head-on.
Gut Check for Leaders: Make Leadership Accountability a Priority in Your Company
As you think about the ideas in this chapter, reflect on your answers to the following Gut Check for Leaders questions:
To what extent has your company made leadership accountability a priority?
Is there clarity among the board, CEO, extended leadership team, and the CHRO on the role each plays to drive strong leadership accountability in your organization?
Does your organization conduct a Leadership Accountability Audit and generate metrics to gauge the strength of leadership accountability?
Do the board and the senior executive team have strategic conversations about leadership accountability?
