CHAPTER 14

WHO’S WATCHING YOUR BACK?

“As iron sharpens iron, so a friend sharpens a friend.”¹

—ANCIENT PROVERB

One spring break vacation our family visited the Grand Canyon and rode mules down to the base of the canyon and back up the next day. Our guide cautioned us in advance that the mules preferred to walk right on the outer edge of the trail. Most of the time this was not a big deal, but occasionally the trail dropped off precipitously. Despite every effort to guide my mule to the center of the trail, “Jack” stubbornly insisted on staying near the edge. During one terrifying moment, Jack defied his sure-footed reputation. As he meandered too close to the edge, loose dirt gave way under his back feet. He slipped off the edge and barely avoided tumbling into the abyss with me aboard. Once righted, Jack continued to walk on the edge. (For the record, he now lives in a retirement community pasture for mules, and other than an occasional twitch, I have recovered from our near-death experience.)

Mules are not the only ones who walk too close to the edge. Some leaders suffer the same plight, but they are not as nimble as Jack in recovering their balance. When they slip, they often go down, sometimes taking others with them. The leader’s reputation is destroyed, and the organization’s brand is tarnished. Employees, stockholders, and vendors suffer. Despite the plethora of failing leaders around us, others stubbornly continue their walk on the edge, mistakenly believing their sure-footedness will keep them out of trouble.

Throughout my career as an organizational psychologist, I have seen a dramatic increase in the call for metrics and performance accountability. Organizations and their leaders face ever-growing calls to be accountable for their activities and results. Leaders are expected to be fully transparent about their financial results, and the U.S. government has passed a vast array of new laws aimed at policing corporate behavior. Boards of directors are expected to hold senior management accountable, and shareholders sometimes sue boards for their failure to fulfill this duty.

The topic of accountability usually focuses on the work of the organization. Are leaders and various units of their respective organizations accomplishing goals and achieving results determined to be important? This is accountability for the task, and most organizations have become fairly adept at designing goals and metrics to monitor and measure these types of results. Accountability for tasks, like our sales numbers, usually happens routinely and visibly throughout the year. Only in rare cases like Enron are there actual attempts to obfuscate results in order to intentionally mislead shareholders, boards, employees, stock analysts, and various legal authorities.

A huge dilemma is that both leaders and boards of directors struggle to hold leaders accountable for personal behavior. This is particularly true in the case of leaders who manage the tasks and achieve results effectively. Although accomplishing goals and achieving financial results are essential, the evidence clearly points to the failed personal behavior of leaders as being far more likely to cause a crisis in organizational confidence. This is why personal accountability is an essential discipline for guarding our core.

Recently I met with Steve Reinemund, former chairman and CEO of PepsiCo, to discuss the topic of personal accountability. Currently Dean of the Business School and Professor of Leadership and Strategy at Wake Forest University, Steve is one of the most highly regarded corporate leaders in the world.*

In our wide-ranging conversation, Steve and I discussed both the task and personal behavior dimensions of accountability, but focused more on the latter because of the subject of this book.

WHAT IS ACCOUNTABILITY?

Steve defined accountability as “Being responsible to some other person or organization for the activities and actions that we take. It is critical to an individual’s performance and an organizations integrity and credibility.”

Steve added that, “A good organization where high-performing people want to work is a place where people have responsibilities and accountabilities for their actions and how they perform in their jobs. High-performing organizations do a great job of defining accountability and then measuring it and holding people accountable for results on a real-time basis.” He continued, “Some of the best organizations that I have seen are very clear and very specific about those accountabilities. If people join an organization and don’t recognize its culture of accountability, they join at their own peril.”

HOW DO WE MAKE ACCOUNTABILITY WORK?

In my consulting experience I have observed that accountability does not seem to work all that well within a lot of organizations, and so I asked Steve why this is the case. He responded, “The biggest challenge of an organization is to be consistent in its definition of what is expected and in its actions. In most organizations, you can find in some form a document that lists responsibilities, accountabilities, and actions. The key is . . . are they consistently applied? When they are not, then they may as well not exist at all.”

In Chapter 6 we talked about how power has great potential to erode a leader’s core. As chairman and CEO of one of the largest companies in the world, Steve had immense power. I wanted to know how he kept the power, the accomplishments, and the accolades from eroding his core and how accountability played a role in that.

“I would be the first one to say that I don’t think I did it perfectly,” he said. “I worked at it. It was something that was important to me, and it was something that I was conscious of throughout my career. . . so many leaders have failed in this area. On one hand I was very clear in my own mind about the importance, but on the other hand, like most of us, I struggled with it. The more success you have the more chance you have to fall prey to power.”

Steve explained that, “When you grow in responsibility, it is also less likely that people are going to push back on you and challenge you. You are less likely to listen. I have seen so many great leaders fall from power because they did not have others around them who would speak to them candidly.

“My attempts to be accountable included getting commitments from other people to be responsible to push back and to challenge me on a regular basis. Their willingness to challenge me helped create the environment that prevented the abuse of power. It does not always work, but it helps. I also created a ‘personal board of directors,’ who, like any good board of directors, provided a balance to my power.”

Steve added, “I also learned from my sister and my mother early in life to think ahead and to prepare yourself for the kind of situations in which you may find yourself. When you are in those situations, you want to be able to quickly determine true north. It has been my observation that the biggest failures—moral failures, character failures, integrity failures, power failures—are not the ones that people contemplate and think through deliberately.

“The biggest challenges to our integrity are the ones that happen spontaneously and we must react quickly. A bad decision is one that can be fatal. Those are the actions that I have seen that bring most leaders down.”

Steve stressed that it is critical that we prepare for the unexpected. “Early in my career, I worked for Marriott Corporation. There was a rule that only one person spoke for the company, and that was Bill Marriott. One day I spoke on behalf of the company and was quoted in the newspaper. Bill Marriott called me and let me know that was not acceptable. I was asked to go to ‘media school.’ As I turned the corner to go into the building where the training was to be held, there were three obnoxious reporters who put their microphones in my face and started asking me all kinds of crazy questions. They were obviously not real reporters but were part of the media training. After they exposed themselves for who they really were, we went inside and I had to watch the painful film of how poorly I reacted.

“I try to keep that visual image of being prepared in mind, not for reporters per se, but being prepared in life. When we turn that corner and something happens we are not expecting, how are we going to react? On what basis would I make decisions—moral decisions, power decisions—when confronted with the unexpected? What is true north in those situations?”

TASK VERSUS PERSONAL ACCOUNTABILITY

Many organizations have become fairly sophisticated in how they measure and monitor performance. Smart goals, balanced score cards, and various types of tracking systems abound. I asked Steve why he thought executives struggle with holding each other accountable regarding personal behavior versus simply the tasks of the organization.

Steve told me, “It is trust. Trust in the other individuals, trust in yourself, and the willingness to get to the point where you are willing to give somebody else that power. Accountability on collaborative decisions is much easier because it depends upon agreement with others about particular outcomes. The decisions that get most people in trouble (the ones you read about in the paper) are made in the privacy of their own counsel. We have to invite other people in to be truly accountable.

“In my own case, I’ve found that when I tell others about something I am struggling with, the very nature of articulating it helps me recognize what the right decision is. You almost don’t even need their verbal answer. By bringing the issue into the light of day, you often realize what the right decision is.”

By bringing the issue into the light of day, you often realize what the right decision is.

ACCOUNTABILITY IS PERSONAL

Steve and I talked about how certain key people at PepsiCo played a crucial role in holding him accountable. I asked him to elaborate on how this worked.

“There were two groups of people who assisted me with this challenge. One was a personal group of people to whom I had been accountable before I took the CEO position. I asked them to renew their commitment to hold me accountable in this new role. The chairman of the board of that small group of people was my wife, and we had many conversations leading up to that day. Several other lifetime friends served on my personal board of advisors.

“The second group was composed of colleagues at work. One ran the Public Relations and Public Affairs group. We had worked together for many years. He was one who I challenged to not only do his professional job well, but also to challenge me when he felt that I was heading in a direction that was inappropriate either professionally or personally or both. The other colleague was PepsiCo’s General Counsel. My challenge to him was that he had veto right on any action I took. I retained the right to push back, but I promised that he had the last vote on any matters that related to my actions.”

It struck me as quite significant that the leader of a major company would voluntarily place himself under the accountability of individuals lower than himself on the organization chart. I wanted to know if there were instances where they actually overruled his decisions. Did anyone actually exercise the right to veto?

It struck me as quite significant that the leader of a major company would voluntarily place himself under the accountability of individuals lower than himself on the organization chart.

“In both cases, the answer is yes. The Public Relations and Public Affairs head and I worked together almost every day. In an average week, he probably pushed back half a dozen times. We had an ongoing dialogue and he was a good sounding board.

“The general counsel’s issues contained much more gravity, and he took them very seriously. When I hired the GC [General Counsel], I don’t think he would have taken the job if I had not made myself accountable to him. He was that type of an individual, and that is why I chose him.

“There were at least two occasions I can remember where the GC exercised his veto. In one instance, I tried very hard to persuade him to change his mind, but he did not. He ultimately prevailed, and I valued that.”

I noted to Steve that being accountable to a trusted advisor is extremely helpful, provided you are willing to be transparent. I can think of a number of examples of leaders who would not have proceeded if they had been willing to talk openly about some of their decisions. Instead they chose not to bring the issue into the light of day, and disaster ensued.

Steve commented, “There is a little adage—‘You can always do something you haven’t done. You can’t undo something you have already done.’ I have found that sometimes a pause before you say something or do something is very helpful.

“I do my best thinking in the mornings. I have learned over many, many years to sleep on it when I am wrestling with something that is of some gravity. I am not likely to make as good a decision at night as I am in the morning. Part of that is also the time to let some of those decisions percolate until true north is determined. It also gives me the time to get the counsel of a trusted advisor.”

He added, “The pointer on the compasses we used when I was doing navigation in the military didn’t settle quickly. Sometimes it would go back and forth; you would have to wait before you could really see the direction. In the decisions we make, it’s also important to let the pointer become steady.”

WHEN THERE’S NOTHING THERE

Emerging leaders who experience a dearth of accountability often want a sounding board for issues with which they are wrestling. I asked Steve what he would recommend.

“We can create our own board of advisors. I found that people like to be asked to serve in that role. Some people don’t, but most do, particularly when mutual respect exists. If the accountability is not inherent in the organization, creating it is terribly important. If there are not leaders who have wisdom, experience, and age, I would look to peers that have been through the same thing for advice.”

Effective leaders want feedback, but they also need to provide feedback to their followers with respect to the task and to personal behavior. I asked Steve how he handled giving feedback to those who needed to address their personal behavior.

“One of the benefits of getting older is sometimes I get a little wiser. I wish I had done this earlier in my career, but I am much more willing to take the risk of giving people feedback on sensitive areas of personal performance and personal behavior than I would have been twenty years ago. It is uncomfortable for most of us, but I know that when I am confronted by somebody, seldom am I surprised by it. You know it, and you just need somebody to push you that last piece. It also helps for you to be aware that others know about the issue, too.”

OUR BIGGEST TESTS

We tend to gain wisdom when we are tested. I asked Steve about the biggest tests of integrity that he faced during his corporate career.

“The biggest tests for me were in the area of personal balance. We all want to live a balanced life. We have more responsibility to our family and to our faith than to our work. All those things are part of the character of who we are. Over my career were tests where I had to step out and deal with what was becoming an imbalance in my life. I feel very fortunate that a couple of those very difficult decisions made all the difference for our family. Retiring from PepsiCo was the biggest one. I was traveling internationally and around the country and gone constantly. I was commuting from Dallas to my office in New York.

“I had two children who were in middle school and about to enter high school. I knew that the balance wasn’t right. Now that I look back at six years ago, I was dangerously close to a personal redline, probably much closer than I even knew at the time.”

Steve’s wife played a critical role, but I wondered if he sought the counsel of others. How did he ensure that he did not redline?

“You know it is interesting, Tim, because I did get others’ counsel. It is one of the times that I ended up not taking the majority advice. The majority advice was, ‘You can work through this. Don’t retire.’ My wife did not say that. But the other people I took counsel from all felt that it could be worked through. In that case, I am glad I did not go with majority rule.”

SAFEGUARDING MARRIAGE COMMITMENTS

Many leadership failures occur because of extramarital affairs. This gets particularly messy when it involves another person at work, especially a subordinate. I asked Steve to comment on this.

“It is an age-old problem. I don’t think it is happening more now than it has happened for hundreds and hundreds of years; however, because of the media, the ability to get away with it is not as high as it used to be. The real issue is very basic. What do I really believe? What is really important to me? We have to remind ourselves every day, several times a day—what is really important? What do I really value?

“Second, do I have balance in my life? Some of these very talented people who derail push themselves to a point where they live on a razor’s edge. That is when we are more likely to make really bad decisions. We all are human, and there is a point where you cannot sustain the level of activity that is going to be optimal. Even if we have great values and commitment, when we let ourselves get so far out of balance, we are much more likely to get into trouble. This is even truer when there is no one around to pull us back.”

Steve continued, “I particularly like to ask myself, ‘If whatever I am considering doing was visible to everyone around me, would I still do that?’ If I am at risk for not adhering to the values I know are right, that question usually catches me. I conclude, ‘No, I would not do that.’

“We also have to be extremely careful about rationalization. We need clear boundaries to ensure that we do not talk ourselves into violating the values we know to be true. When leaders fail, there has to be a series of rationalizations to get to the point they do. Assuming that what we see and read in the media is true, this was certainly the case recently with General David Petraeus. He is too principled. He talked about leadership too much not to know that the path he was on was progressively leading to a bad place. Without knowing all the sordid details, you have a sense that when he started down the track well over a year ago, a slow-motion train wreck was inevitable.

“In a New York Times article I read, there were some significant rationalizations along the way that should have been warning signs to him. When he learned the biography was going to be written, he apparently concluded, ‘If it is going to be written, I should at least try to influence it.’ The amount of contact that would be needed with the author to shape the outcome should have been a warning sign. When he realized that to influence the direction of the book he would have to divulge confidential information, he should have seen a lot bigger warning flag. He also appears to have ignored the counsel of people around him. There were a whole series of what appears to be early-warning signs that went unheeded.”

WHAT ROLE CAN A SPOUSE PLAY IN ACCOUNTABILITY?

Whenever I have spoken with Steve over the years, he frequently mentions his wife, Gail, and what an important role she plays in his personal and professional life. I asked him to comment further about how she holds him accountable.

“It starts with a relationship. We met and fell in love well before the corporate world came along. I was in the U.S. Marine Corps at the time. She didn’t marry into a corporation. Her acceptance of me had nothing to do with the role I had. Because she does not get her satisfaction out of my role or level in a company and does not have a vested interest in the company, it is easier for her to be objective about what she sees and how I should act.

“She is more interested in my welfare, our welfare, and our children and family’s welfare than in what I do or where I go. That takes an enormous amount of pressure off. To be able to say ‘no’ to a promotion was easy. If she had to choose between my being at home or having a promotion, clearly, she would rather have me home. That is foundational. We started a marriage with a set of commitments that were clear to us, and they did not have anything to do with vocational success. So if I made a decision that was not consistent with what we had agreed to, it was much easier for her to talk about that.

“Gail has a lot of wisdom and a lot of ability to envision our lives in the future. We had many conversations about balance that ultimately led to my retirement from PepsiCo. There was always a sense that, ‘We are in this for the long haul so we are going to work this out. But is this right for our kids?’ Our commitments provide great clarity. We knew that we didn’t get a second chance in raising our kids.”

STEVE’S ADVICE FOR YOUNGER, ASPIRING LEADERS

Steve has always had an interest in the development of younger leaders. He is devoted to this end in his current role as dean of an outstanding business school. I asked him about what advice he gives to younger, aspiring leaders.

“Be clear about what you believe is important. Make sure you are fully conversant with yourself about what is success and how you are you going to measure it. How are you going to make sure that you have the highest likelihood of doing those things that lead to success? How will you have people around you to keep you accountable for the things that you say are important and to challenge you if you are not acting consistently with your beliefs? Be sure to have people around who care about you and who will challenge you,” Steve says.

Every now and then I hear a politician make a comment about another elected official, saying that what a person does in his or her private life is none of our business. Any behavior on a leader’s part that could tarnish the brand or credibility of an organization (or a country) is not private. Young leaders need to keep this idea firmly in place as they navigate their early years at work. Social media has an extraordinary power to make private behavior very public.

Accountability is a vital discipline for developing and protecting our core. The next chapter takes the disciplines from previous chapters and provides actionable steps to implement these disciplines. We certainly do not want to be like Jack the mule constantly walking on the edge and ready to fall off the ledge at any instant.

* Steve Reinemund is currently at Wake Forest University in the role of dean of the business school and professor of leadership and strategy. A twenty-three-year PepsiCo. Inc., veteran, he led the corporation as chairman of the board and chief executive officer, beginning in 2001; he retired as CEO in October 2006 and chairman of the board in May 2007. During his time at the helm, PepsiCo’s revenues increased by more than $9 billion, net income increased by 70 percent, earnings per share increased by 80 percent, its annual dividend doubled, and the company’s market capitalization surpassed $100 billion. In addition to the growth of the company, Steve’s legacy includes a commitment to health and wellness, diversity and inclusion, and values-based leadership. He serves as a member of the board of directors of American Express, ExxonMobil, Walmart, and Marriott. From 2005 to 2007, Steve was chairman of the National Minority Supplier Development Council. He served on the National Advisory Board of the Salvation Army from 1990 to 1999, and he was chairman of this board from 1996 to 1999. Steve also served on the board of The National Council of La Raza from 1992 to 2001 and was chairman of its Corporate Board of Advisors from 1992 to 1996. He is a graduate of the U.S. Naval Academy and served in the U.S. Marines before attending the Darden School of Business at the University of Virginia.