Business Accountability Series Part 1: The Importance of Accountability

It is my experience and learning that clarity of accountability is one of the most important and key success criteria for a business. This may seem obvious and that is why it is surprising that many (if not most) businesses do not have a clear assignment of accountability for their employees. This is observed more in large businesses than small and more pronounced when businesses go through M&A activity.

So why is accountability so important in a business? Here are some reasons why:

To make the business easy to work with for external parties, especially for customers.

Customers should know exactly who to go to when they need something from the business. That does not mean they should have only 1 point of contact. It does mean 1 contact per function such as sales, support, etc.

To ensure internal business activities are efficiently and effectively performed.

A functional process should only have as many steps as needed not as many steps as there are people. Otherwise, efficiency for sure and perhaps effectiveness are both poor.

To be able to set clear goals, objectives, performance, and measurement criteria for employees.

An efficient and effective organization is created when every employee knows exactly what their role and responsibility is. And they are measured against those.

To ensure no “ball is dropped” or nothing of importance “falls through the crack”.

The business should have a planned assignment for every business scenario. When new scenarios are encountered, they should be first handled and then assigned for future situational handling.

To instill a sense of “ownership” and empowerment among employees.

Every business needs motivated employees who come in every morning to work knowing exactly what they are responsible for and expected to do.

To avoid internal squabbles and finger-pointing.

This happens when there is confusion on who is “accountable” and who is “responsible”. A particular function may need several employees to participate and be responsible for certain tasks but there can only be 1 employee accountable for the overall function.

To avoid redundant costs.

This goes back to organization design. If the design is based on the available people who can do a certain job, then there could easily be duplication. A better way is to design the organization first based on business needs and then assign the best qualified people to the positions.

To manage business risks better.

Every business risk needs an owner to ensure it does not get neglected. Sometimes, risks remain risks for several years and then suddenly become an issue because there was no owner for this whole time.

In the next part I will go over what I have learned are the challenges in business accountability.