Accountability: The Hard Part (gulp)

The last LOL entry left our hero (that would be YOU) facing the toughest part of accountability:  dealing with broken agreements.  You’ve made a clear agreement with the other person but they don’t live up to their agreement.  You feel disappointed, maybe a little angry too.  Lawyers call these incidents breeches of contract.  At work we may call them gaps or missed commitments.  Now you face a crucial confrontation.[1]  Most of us would rather have a root canal with no anesthesia than to have this conversation.  Why?  Because we’ve never really learned HOW to have these conversations.  We know we’re going into dangerous territory without equipment, training or backup.  Gulp.  So, we try to finesse it.  In the history of business, this has worked three times.

Don’t despair.  There is a way to handle these conversations skillfully.  You don’t need to pray for divine intervention.  The set of steps below will help you address and resolve the toughest part of accountability:  the big, nasty, undeniable broken agreement.

Step 1:  Determine WHAT the problem is.  Your co-PM on the portfolio shows up 15 minutes late for the 9:00 a.m. meeting with analysts.  If this is the first and only time that your co-PM has shown up late, then you can nip-it-in-the-bud by addressing it as a one-off.  You might appreciate him for his normal punctuality and ask if everything is all right, given this one instance of being late.  Fine.  But, what if it happens a second and third time?  Now a pattern is developing.  So, it’s useful to think of:

  • Consequences: what are the business consequences of the behavior?
  • Intentions: what is your story about WHY the co-PM comes late to meetings?

By considering both consequences and intentions from repeated violations, you can get a clearer statement of what you believe is the real problem.  It’s important to be able to state concisely what your concern is:

“When you come late to our weekly meetings, it sends a message that you don’t value the analysts’ input.  My story is that this hurts team morale.”

Step 2:  Determine IF you should raise the issue.  Not every broken agreement is worth a crucial conversation.  After you’ve done step 1—concisely identified the real issue—then you still have to decide if you want to bring it up.  In this regard, there are three useful questions to ask yourself:

  1. Is your conscience nagging you? You tell yourself it’s no big deal, but your gut tells you that you should say something.  Pay attention to that voice.  Use FCG’s “rule of three.”  If your conscience nags you three times, you should probably say something.
  2. Are you rationalizing? Are you downplaying the significance of the issue because it will be hard to deal with?  Get past the question of “will it be difficult” and ask yourself, “Should it be done?”
  3. Are you playing victim (helpless)? You tell yourself that there’s nothing you can do to improve the situation.  You don’t have the skills to approach the other person.  But even a small degree of skill in the steps described in this blog can help considerably.

Finally, if you are operating in a culture that hasn’t taken accountability too seriously in the past, then it behooves you to “call your shot.”  Don’t just spring this higher, more demanding level of accountability on the team, give them fair warning.  Re-set their expectations.  And do it in a way that doesn’t look smug.  Be respectful.  You may want to say, “I know there are parts of this organization that are informal about accountability, but I think it will serve us well to get better at it.  I believe we can raise our game by being more precise around accountability.”  (This approach works much better than labeling the rest of the firm’s leaders lily-livered losers.)

Step 3:  Come from a positive intention.  Check in with yourself around why you are giving the feedback. Make sure you’re not viewing this conversation as a chance to get revenge.  That never goes well.  A useful way to review what you are going to say, is to “cube it.”  The model below is core to FCG’s approach to feedback:

  • Start by assembling your facts. What is unarguable about the situation?  (For example, that your co-PM was late for three meetings.  It’s helpful to be able to state specifically what time s/he arrived.)
  • Then ask yourself, “What do story do I make up about the facts?” (For example, that the co-PM does not respect me or the team.)  Remember to “hold your story lightly” because it may be wrong!  Be careful of assigning a label to the person:  “slacker” or “arrogant.”  It’s highly unlikely that the other person sees himself this way!  And, what is the business impact of your story?
  • Consider your reaction. Are you worried?  Concerned?  Angry?  Keep in mind that your story is creating your reaction!  (What if the co-PM was told by the CEO to show up late so that you could get experience setting the tone for the meetings?  That fact might well create a completely different story and reaction.)
  • Finally, decide what you want. What is your request?  What change do you want to see in the future and why?

After you’ve played with this “cubing it” exercise, ask yourself if you are giving the other person the benefit of the doubt.  That is, assuming good intention.  A good question to ask yourself is:  why would an intelligent and decent person act this way?  (If you find yourself re-wording this question to:  Why does this bastard have to be such a jerk?  Then you have a bit more preparation work to do…)

Step 4: Safely describe the gap.  So far, you haven’t said anything to the other person.  You’ve thought through the situation and defined the issue, asked yourself IF you should bring it up, and then checked out your intention:  is it positive?  Finally, you’ve played with “cubing” the situation, so as to clearly understand where you are coming from and what you want.  Now, you’re ready to speak.  The first words out of your mouth are critically important.  Remember our old friend, the amygdala?  The lizard part of our brain is watching for anything that might be dangerous.  So, if you start the conversation with an accusation—boom!—the amygdala will hijack the rational part of his brain and prepare him for fight or flight.  He may not actually start hyper-ventilating, but I can assure you he is not hearing a word you are saying.  And if he is, it probably sounds to him like, “I know where you live and how to wire a car bomb.”

So, what’s the secret to success?  Start with safety.  People feel unsafe when they believe one of two things:

  1. You don’t respect them as a human being. (You lack Mutual Respect)
  2. You don’t share a mutual goal. (You lack Mutual Purpose)

Therefore, establish mutual respect and purpose.  Explain that your intentions are positive and find an outcome you can both agree on:  happy client, excellent report, strong team, top results, whatever.  You want to solve the problem and you want to make things better.  If you sense that the other person is already becoming defensive, then use a technique called “contrasting.”  Identify their fear—loss of job, reduced bonus, no promotion, etc.—and directly address it.[2]  It may sound like this:

“I suspect that you might be worried that this situation affecting your chances for a promotion, but I assure you that is NOT what this conversation is about.  You are highly valued. I just want to discuss the Smith account, understand what went wrong in our last meeting, and brainstorm how we can make things better.”

Obviously, you have to be sincere in this statement.  It never, ever pays to mislead someone.  Be sincere, but also be direct.  Don’t insult someone by playing games or hinting or challenging them to read your mind.  Establish safety then describe the gap.

To continue with our co-PM example.  You might simply say to your colleague,

“I noticed that you came late to the last few meetings we’ve had with the team.  I was wondering what happened.  Is there something I should know about or can help with?”

If your co-PM doesn’t get defensive and seems quite willing to rationally discuss the situation, then fine.  But watch for defensiveness.  At the slightest sign of it, forget about the issue (the “content”) and re-establish safety (the “process”).  You are walking a parallel path in these confrontations:  content and process.  The message and safety.  When safety seems threatened, step out of content and rebuild safety.

As in the example above, end with a question.  Show sincere curiosity.  Describe the gap and then ask an open ended question, like, “What happened?”

Step 5: Diagnose Will or Skill.  After you have safely described the gap (i.e. shortfall in performance, or broken agreement), and asked an open ended question, get curious about their will or skill.  Is the person unmotivated?  Or is the person unable to do the task?  In short, your job as manager—or as peer—is to help bring out the best in your team mates.  So, when a colleague is failing at a task your two big levers are:

  1. Make it motivating. Help them want to do it.  Help them understand the consequences of their failure and link it to something they care about.  See if you can reach a place where they are genuinely motivated.  For example, my wife is not a “money person.” She just doesn’t care about making a big income.  But she does care deeply about animal causes.  When she links making more money to making bigger donations to animal causes, she gets excited about more income!  And encourages me to do the same…
  2. Make it easy. Not by bullying or hero-ing (micro-managing), but by being an expert enabler: one who can make the job easier for them.  (Sometimes that means teaching them what the job is.) For those of us who are Puritanical by nature, this can mean letting go of the idea that something must be difficult and noxious for it to be valuable.  It’s ok to look for an easier, more efficient way to accomplish the task.  This might mean brainstorming ways to remove barriers. Play Socrates.  Ask good questions.  Let them solve the issue.  Avoid being the hero who rushes in to “save the day.”  Ask them for their ideas.  Get genuinely curious about their ability to solve it on their own.  Listen and encourage.  And avoid the two common mistakes:
    1. Leading the witness. Pretending to listen but really just guiding them to your solution.
    2. Playing Know-it-all. Having an answer to any question they pose, even when you have no clue!
      Finally, a wonderful question to ask is, “If you were CEO, what would you do to solve this problem?”  Giving the person this new framework can often unleash very creative ideas about how to eliminate barriers.  Challenge the status quo.  Many policies and procedures are outdated and should be reworked.

Step 6: Develop a plan:  So far you have safely described the gap in performance, diagnosed whether the cause is will (motivation) or skill (ability), brainstormed a new approach that seems like a workable solution.  Great.  The final step is clearly set out the plan for follow-up.  Make sure that before you exhaust yourself with self-congratulatory NFL dances, you have a “who will do what by when” statement.  And a plan for monitoring and following up.

There you have it:  a six step plan for addressing broken promises, missed deadlines, performance gaps. A fair question at this point is, “But what if you get sidetracked?”  You think you are addressing a missed deadline and suddenly it becomes evident that your employee has lied to you on several occasions.  Be clear. If a separate issue comes up, then name it: “honesty.”  And then decide, which is more important: the missed deadline or the trust issue with your subordinate?  You can use the same six step process on the new issue.  Just be clear and don’t meander.  Consciously choose an issue and then stick with it.

As with any skill, practice makes perfect.  Or at least helps.  Don’t expect to get this process exactly right the first time you use it.  But trust me on this, it does get easier.  And you will get better at it.

So, as you take aim at improved accountability for your team and your firm, remember the Triple A formula:

  1. Clear Agreements. What are you holding them accountable for?  And do they buy in?
  2. Acceptance of responsibility. All staff members take responsibility for their contribution to the results; they don’t hide or blame others.  And they are open to feedback which allows for good monitoring and course correction when necessary.
  3. When goals are achieved, managers appreciate the team members and set new goals. When goals are missed—the subject of this LOL entry—managers follow this six step process to discover what went wrong and how to fix it.

Let’s end on a positive note.  If you and your team mates embrace the goal of becoming more accountable and have even modest success, you will be way ahead of the typical firm.  So, in this ever more competitive landscape, accountability is clearly a place where you can gain an edge.  And isn’t that nice to consider?

Curiously yours,

Jim Ware

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[1] This term is from the best book we know on the topic: Crucial Confrontations by Kerry Patterson, et al

[2] FCG has found that people usually get defensive because they fear the loss of 1) security 2) approval or 3) control. A feedback approach that acknowledges these three major fears and does not threaten them is optimal.

Accountability: Don’t take the Sucker’s Bet

Many investment firms are taking the sucker’s bet on accountability. Is yours? Let’s define the sucker’s bet. It’s an either/or choice, in which both options are bad ones. A little like, “Have you stopped beating your spouse?” Either answer condemns you. The good news with accountability is that a wise choice does exist. But many firms don’t see it.

Accountability is a core value for investment firms. We know this from our survey work. Often it is subsumed in “integrity” or “professional,” but it always rises to the top of the “must have” values. Accountability is linked to fairness. If people are falling short of their goals or shirking their duties altogether, then it seems unfair to let them off the hook (i.e. NOT hold them accountable). In the ideal firm, everyone knows their role and their responsibilities and is properly held accountable for fulfilling them.

Recently FCG has worked with three excellent investment firms, all with good track records and known brands. In each case, we asked the leaders of the firms, “What values would help eliminate sludge and improve results for the firm?” We showed them a list of the most common values at investment firms and asked them to vote (using clickers). Here is the vote from one firm, its 50 leaders:

Sure enough, accountability is the top vote-getter at 24. (Meaning half the room chose it.) You will notice that the voting candidates are alternately colored blue and black. That’s for a reason. In FCG’s experience, values fall into one of two broad categories, “tough love” or “TLC: Tender Loving Care.” In

other words, some values are the tough side of leadership, like holding people accountable, or pushing for more excellence. While others are the supportive side of leadership, like caring and listening. In our “crayon simple” way, FCG has labeled these sets of values the “fist” and the “open hand.” A sample list is shown below:

In our view, good leaders understand and practice both sides of this chart. Leadership is situational. Sometimes a staff members needs to feel supported, other times they need a push. Good leaders know when to use each.

So, what is the vote above telling us? (And remember, this result was nearly identical for three different firms.)  Add up the “fist” votes and the “open hand” votes and you get these results. 90 votes for the fist, and 44 votes for the open hand. More than double for the tough love.  Note: all three firms are really good places to work. Two have won the P&I award for being a “great place to work.” And in FCG’s opinion, they are indeed populated with smart, decent, good people. (The kind of places I would want my daughters to work. J)

Back to the sucker’s choice. Why don’t these firms simply turn up the volume on the “fist” in order to achieve the proper balance between fist and open hand? A comment from a participant captured the sucker’s choice nicely. He said, “So what you are telling us is that we can choose the candy bar in the open hand, or the whip in the closed fist?” Bingo. There’s the sucker’s choice. To put it in cultural terms: we can be a nice place to work, where people are polite and civil, or we can be an abusive sweatshop

where people get lashings when they don’t perform. And there it is: the sucker’s choice. The nice place to work has little accountability and operates sub-optimally, whereas the “fist” shop whips people into shape, but is a nasty place to work.

What’s the solution? It requires a re-frame on what it means to use the fist. The fist is not whipping people. It’s a culture in which the values of precision, discipline, excellence, and candor are understood and practiced. Instead of a whip, picture the fist holding a scalpel. (No! Not for slicing up people!) The scalpel represents surgical precision. Most firms are using butter knives which make for sloppy agreements, fuzzy roles, and blurry decision rights. The surgical scalpel is used to make precise agreements, specific roles, and clear decision rights. An example? After a lengthy discussion, a leader will say, “Okay, will one of you follow up on this as soon as possible?” Everyone nods. (It would be rude to do otherwise.) This approach is the butter knife. Imprecise and fuzzy. The scalpel approach is different. It follows the “Who will do what by when?” formula. And it sounds like this: “Sarah, will you summarize this discussion on one page with a recommendation at the bottom and send it around to us by 5 pm tomorrow?” Now, the candor part of the fist leadership is when Sarah responds, “I have three client meetings between now and tomorrow at 5 pm, so unless you want me to reschedule one of them, I am not available to do it.” Notice, no one is getting whipped or sliced open, but they are operating with precision and candor.

Far too many firms consider this fist approach to be rude. Again, that’s the sucker’s choice: “We can be a nice place to work with decent people, or a rude place with hostile people.” Wrong. You can be a very nice place to work that also take seriously the values of: accountability, precision, candor, and clarity.

So, how could you as a leader move your team or firm in this direction? You first identify and agree on the problem: we are out of balance. We are too much the open hand vs. the closed fist. (Like 12 step: “My name is John and I’m an open hand leader.”) Then you start to leverage the open hand values, like appreciation and respect, to highlight and promote the fist values. How? By putting your attention on the examples within the firm that demonstrate good fist behavior. When someone makes a very clear agreement, you acknowledge them publicly: “John, I want to appreciate you for that clear agreement you just made. The “who, what and when” were all identified with precision.” Or on the accountability front, you recognize a team member for giving direct feedback about a missed deadline. It might sound like this: “I’m aware that we made an agreement to have the RFP ready for this meeting so we could review it. The proposal is not ready. I’m curious. What happened?” Again, no whipping, no blaming, but clarity around the missed deadline. And curiosity around, why? In these conversations, watch for the appearance of victims, villains and heroes. They sound like this:

Victim: “I wasn’t given enough time to finish the RFP. And no one gave me any help. I was left to do it all by myself.” (Poor me)

Villain: “Why did you accept the assignment if you knew damn well you weren’t going to get it done? How do you expect to raise our accountability if you keep acting like this?” (It’s your fault, you idiot)

Hero: “Now, wait a minute. He gave it his best shot. We’re all busy, and sometimes things fall through the cracks. Give us another day, and I’ll help him get it done.”  (Let him off the hook; I’ll do it)

These behaviors are common in cultures dominated by the open hand. They reflect the fact that no one is taking 100% responsibility for the work. The villains and victims each take 0%, they blame others or the circumstances. While the hero takes 200% responsibility, covering for others and taking up the slack. A culture that properly balances the fist and open hand sees less and less of these behaviors and much more candid and clear conversations about accountability. A move towards the fist is a move towards a more mature and courageous culture.

So, there is a way to balance the fist with the open hand. And a move towards more accountability does not mean that the culture has to become nasty or mean-spirited. Rather, a move towards accountability is a move towards clarity, precision, candor and excellence. FCG recommends that you talk about this shift openly. Explain to the team what you are trying to do: create a culture of accountability. This goal requires a balancing of the two forces: the fist and open hand. Research on great leaders indicates that they practice two fist traits–integrity and responsibility—and two open hand traits—compassion and forgiveness. That is the goal of strong leaders. Have both tools in your kit and know when to use each.

Three important tools must be sharpened if you wish to become a truly accountable organization. First, roles and responsibilities must be clear. Second, the goals for each role must be negotiated and agreed on. Third, feedback must be used to close any gaps. Skillful delivery and receiving of feedback is necessary to close accountability gaps. In one of the firms mentioned in this piece, a senior PM told us, “I’ve stopped giving candid feedback because when I do it shows up in my year-end review as being hostile. I get docked in my bonus for not being a team player.” Here again is the sucker’s choice: polite (but sub-optimal) vs. rude (but more effective). Good leaders will not take the sucker’s choice of either/or. Instead, they will opt for both/and. We can be a great place to work with genuinely good and caring people AND create a culture of accountability through practicing candor, precision, and excellence. We can choose the fist AND the open hand.

Curiously and candidly yours,


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Appreciation:  Can you stand just a little more?! 

Last week’s LOL—“FCG’s Secret Weapon”—got a surprising response from readers, with several saying it was the most important piece they’d read in years. Hey, thanks for that appreciation! (Keith Robinson finally intervened at the airport and told me to stop showing these emails to strangers…) Now that I’ve composed myself, let me dig in a little deeper on this topic.

Appreciation is indeed a secret weapon. Secret because the belief system in the investment world is so skewed towards criticism as the tool of choice. Being critical is important to investment success, so any card carrying CFA must have honed her critical skills. The problem occurs when we become the proverbial “hammer” that sees everything as a nail. The reasoning goes: “if my critical skills are so useful in stock selection and strategy sessions, then they must be useful in managing my team as well.” FCG works with leaders who are convinced that if they just criticize the underperforming analyst enough, the performance will turn around. It’s really not far from the old joke: “The beatings will continue until morale improves.” We laugh at that joke because the logic is so warped. And yet we behave–manage our people–that way all the time. How do I know this? Because I do it all the time! “My name is Jim and I’m a recovering critic.” (How many can relate?)

Appreciation is the antidote. Experts in the field of relationships (John Gottman) and coaching (Phil Jackson) agree that 5-to-1 is a good ratio for appreciation-to-criticism. Note: they don’t eliminate constructive criticism, but they do keep it in the proper measure.  And lots of research on coaching indicates that the best way to coach is not to harp on the negative but to show the coachee the right method. A simple example. If you are a poor bowler—which I am—it helps to be given the instruction: “finish with your thumb pointing towards the pin you want to hit.” Rather than, “hey, bonehead, stop throwing gutter balls!” In the first case, I’m given a concrete suggestion to work with and practice. In the second, I’m merely criticized. We’ve seen PMs rail at analysts for bad stock picks without giving any constructive feedback about the process.  What did they miss? How could the thinking be improved? Often when we give PMs this advice they respond with, “I shouldn’t have to coddle these people!” And, presto, we’re back to the belief system: “I can beat them into better performance.”

So, let’s talk accountability. Because that is a fair question when we are talking about performance and appreciation. “What!? I’m supposed to praise these people when they put howling dogs in my portfolio?!” No, not at all. But in our experience the best accountability begins with clear agreements around what you expect from your team members. Once you’ve agreed to performance standards, then write them down!  It should be very clear to all what good performance looks like. The accountability piece is handled through feedback. An example? Let’s say the PM and her analysts have agreed that the requirement is one new idea per analyst per month. By June, one of the analysts has only brought in 4 ideas, rather than the 6 that were agreed to. So, the feedback would look like the PM stating the facts—all analysts are expected to bring in one idea per month—and then the additional fact that the analyst in question has only delivered 4. The PM would then get curious about the shortfall. The analyst would too. Together in a constructive dialogue (read: appreciative inquiry) they would explore how to close the gap. At year-end, if the gap has been closed, great. If not, then the second accountability lever may need to be pulled: compensation. If the analyst has fallen short by 25% (only 9 ideas, not 12), then perhaps pay is cut accordingly. The third and final lever is: employment. If the analyst continues to fall short after both feedback and compensation have been used as levers, then the conversation shifts to suitability of the role. Does the analyst have the “will” to do the work (properly motivated?) and does she have the “skill” (properly trained?)? In our experience, appreciation and accountability can live well together in a high performing shop.

Returning then to appreciation as a way to lead a firm or manage people, it may be helpful to spell out the underlying beliefs that support an appreciative approach.

Appreciative Principle Description/Comment
Topics Create Outcomes What we choose to study makes a difference. How we frame questions determines what we inquire into and what the outcomes will look like. If Henry Ford had framed his question about “How to make faster horses” he would have created a very different solution.
Inquiry Creates Change Asking questions is very powerful. So, ask good questions. Not: “why is he so bad?” but rather, “how can he improve?” Our minds are like Google search engines, they will dutifully go off and answer the question we ask. So, be careful. Ask appreciative questions.
Pictures Inspire Action Humans move in the direction of their images of the future. The more positive and hopeful the image of the future, the more positive the movement towards it. Vision is important.
Live the Future Now Be the change you want to see in your firm. Don’t wait. Acting “as if” is self-fulfilling. This works both ways. Act as if nothing will change and guess what? Nothing does!
Autonomy Liberates Power People perform better and are more engaged when they have the freedom to choose how, what and when they contribute. The more you trust your employees with autonomy, the more they commit to you and the firm.
Words Create Worlds The culture of a firm is created through language and conversations. Leaders should be careful to encourage positive stories about the firm, and “correct” the negative ones. Many negative stories in a firm (read: gossip) are simply inaccurate. Leaders must be aware of them and manage them constructively. Often the best approach is to meet the negative stories head on.

Strength leads to Success

Identify and build on strength. Both for individuals and for firms: leverage your core strengths.

In our experience, firms that understand these principles and begin to work them into their management style and firm culture create a sustainable advantage. So, to remember these principles, remind yourself that if your firm wants to reach the tip of the summit, then they must practice “TIPLAWS” (rules for reaching the top).

After writing the last LOL, FCG had another very positive experience using the appreciative approach. We were working with a common situation: the older founders of the firm in conflict the younger “new” talent.  The story line usually goes like this: (and the current situation was largely the same)

Older founders: “We have given you a platform on which to perform. We bet on you when you had no track record. You should be grateful to us.”

Younger staff: “We have worked hard to create a winning track record, which allows for future success. You should be grateful to US!”

Note: the underlying request in both cases is—yup—appreciation! Dammit, appreciate me for what I did! We have seen these conflicts degenerate into wrestling matches in which both sides try for a head-lock, submission, and final pin: “You’re right. I’m wrong.” And, of course, that never happens! J

In fact, the case in point had reached what we call the “nuclear option” with each side’s finger hovering above the “red launch button.” The young talent quits, and the founders shutter the firm.

But thanks to the appreciative approach, we got both sides talking in a more positive and hopeful manner by asking constructive questions and finding common ground. Everyone in the discussion could rally around the goal of making clients happy. They could also rally around the idea of making themselves happy by:  1) doing the work they love and 2) being treated in a respectful and appreciative way.

We also created a positive picture of the future. Specifically, that owners and talent both imagined a future scenario in which the PM and his team could operate largely independently once the current situation had stabilized. There was a palpable easing of tension in the room when all the participants realized that the preferred future was possible for all parties. Of course, the devil is in the details, so there’s more work to do. But FCG is very hopeful for a good outcome, IF the dialogue remains constructive. That is, appreciative.

Ok, that’s the update on our secret weapon. Please send more compliments, and don’t be afraid to use adjectives.

Stay curious and appreciative,


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