Developing an Accountability Culture

All Searcher CEO’s strive to lead a profitable, growing business with shared values across the organization, a common mission, and a culture of accountability. This is a lot harder to reduce to practice than it sounds.

SME organizations struggle every day to just “get things done”, working with limited resources, no shortage of projects to work on, and demanding customers looking to receive their product and/or service.

Getting the entire organization focused and aligned is much easier said than done. McKinsey, Bain and BCG consulting practices are all based on high-level strategy, customer value propositions and business models. The searcher CEO’s recent MBA-level expertise doesn’t always “translate” to small-to-medium-sized firms (SME’s), where the leadership team too-often operates in the “weeds”, just trying to avoid having the “wheels fall off” the organization on a day-to-day basis.

When you purchase a company, your task will be to build a team and get them pulling in the same direction as quickly as possible, and avoid getting dragged down into the weeds yourself. In the first year, you will be following the guideline of “no changes for now” (See blog post on Taking over the Business), and focused on just learning the business, but once this “honeymoon” period is over it is time to focus on culture.

Start with the team you have

During the due diligence process, you may have prepared many ideas of how to improve the company you purchased. By their nature, search acquisitions are not turnarounds and don’t need an immediate upgrade in their leadership team or the company’s strategy for that matter.

It takes some time and thought to separate the “keepers” from the rest, and to figure out what “seats” each of them should really be sitting in. Being humble, and learning about the business as the leadership team works together on a few critical initiatives is important. Working side-by-side with the team allows the you to evaluate the leaders both individually, and how well they work together. It is likely that your company will have many of the wrong people in the wrong seats, but it can be a mistake to re-architect the organizational chart too quickly.

Once beyond the first year, it makes sense to get the leadership team together over a couple days and draft a business plan that the team can get behind. In 2002, Vern Harnish published “Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm” which details the building of a simple One-Page Strategic Plan that gets the team crystal clear about who they are (core values), what journey they are on together (purpose and targets), and what each leader needs to be doing this week to get there (initiatives and actions).

Using the approach Harnish outlines, the leadership team develops the most critical priorities to work on in the upcoming quarter, with 13 weekly actions or milestones for each leader. His books, including his recent “Scaling Up”, are filled with straightforward concepts, processes and practical instruction. Harnish’s planning approach incorporates high level elements such as vision, mission, values, SWOT and the like – but in a less abstract, more action-oriented form. Simplicity and focus are emphasized.

Structured team communications are the key to success

According to Harnish’s framework, the plan your team develops is less critical than the peer accountability rhythm it spawns. Regular and consistent communications is the cornerstone. Counter-intuitively, meetings are increased, with daily, weekly and monthly “huddles”. Each type of meeting is scripted and designed to build teamwork, peer accountability and focus. Status updates are limited to color-coded progress meters – red, yellow and green, narrowing the team’s focus to the obstacles, or “Rocks”, that get in the way of achieving the team’s priorities. Weekly and monthly metrics are chosen for tracking goals and results – as management guru Peter Drucker said “you can’t manage what you can’t measure.”

After 13-weeks the team is encouraged to celebrate their achievements, and refresh the One-page plan based upon the new realities of the business. And after a quarter or two, the CEO is ready to re-evaluate the organizational structure for the company, and to begin putting the “right people in the right seats” as Jim Collins so aptly preaches.

Software can help visually present progress and make meeting preparation for each attendee more relevant. This is particularly useful for work teams that are not all collocated. Even email can be used to post updates on a regular basis and in some cases directly from the CEO to the entire organization; just another method to ensure that everyone is on the same page. Through this process, your CEO role shifts from dissemination/delegation to coaching the leadership team to achieve their goals.

Supporting systems have been introduced to provide for more visible tracking of initiatives and help provide for accountability throughout the organization including Align, Gravity, Rhythm, Unito or Metronome.

Self-Implement, or get a coach?

There are an estimated 60,000 SME’s who are utilizing these Rockefeller habits, or one of the many “spinoffs”, led by Gino Wickman (EOS), Shannon Byrne Susko (Metronome) and Patrick Thean (Rhythm) among others. Many CEO’s have selected one or a combination of the various systems and implemented it themselves just by reading the books. It has strong adoption within the EO (Entrepreneurs Organization) and YPO (Young Presidents Organization).

Other CEOs have used coaches that have been trained in the process. Harnish recognized that a busy CEO may struggle to implement these ideas without some hand-holding and accountability. His team at Gazelles certifies “business coaches” to work with companies to set up simple systems to help the organization flourish on their own. A cottage industry of these types of coaches has arisen in the last 10-years that can accelerate progress, and mitigate costly errors around implementation, team dynamics, and talent.

The coaches basically do the same thing – facilitating the planning meetings or supporting the CEO through the process more intensively. The best coaches focus on practical tools supported by regular check-ins and a clear exit path that satisfies a CEO’s desire to “teach me to fish!” There are over 500 similarly equipped facilitators throughout the world at this point and their costs vary widely, roughly from $20K to $120K per year. Engagements can vary from one planning session to a few years.

In many instances, searcher CEO’s are reluctant to make this commitment of time and expense; at their peril! They struggle to take on something that they feel they should “know how to do on their own”. Searcher Max Sadler says “these tools and systems were not ‘beneath me’, but instead very valuable for affecting change in the organization”.

Additionally, searcher CEO Steve Divitkos reports “You can do it with just the material online and in the books, but I’d strongly recommend a facilitator. Success rates are highly correlated with getting external help. It’s nice to have somebody to keep everybody accountable (including myself), and it’s certainly helpful to have somebody to bounce questions off as they inevitably come up. Coaches also facilitate quarterly and annual off-sites, which is very helpful. IMO, 100% worth the investment. My board was fully supportive.”

Summary

It turns out that most of the practical growth tactics fall outside of the context of the traditional business education courses. Traditionally, there has been a great deal of advice out there for big firms, and startups, lots of help for big firms and help for startups, but not much in between. That’s changed dramatically in the last decade.

Being a searcher CEO does not require that you know how to run a business, but that you are willing to learn new skills to develop the capability. I only wish that many of these “best practices” were available while running my own search business. If you don’t embrace these kinds of systems, you miss a great opportunity to bring added value to your business that will yield significant results. If you are not using these tactical tools, you can bet that some of your competitors are!

Search on!

Feel free to share some of your own best practices or experiences in dealing with these issues in the blog comments. I encourage comments and dialog, allowing all to learn from both my views and the views of others – a virtuous learning cycle. Jump right in! I frequently update individual blog posts, add to the Reference section and Search tips, so visit the www.jimsteinsharpe.com website regularly.