Many who aspire to high position do so because they believe it buys them a new level of freedom from scrutiny from those “above.” They think they will be able to chart their own path, rely on their own instincts, and do things their way. They may be right- for at least a short period of time. But, as we all know, judgment awaits everyone, and leaders live and die based on their “results.” Every leader is answerable, even those who own their own company.
Executives hired or promoted by a company owned or run by others should be very clear on how success will be measured and defined. This will vary from company to company, situation to situation. If a company needs to be turned around, the measures of success may be the degree to which the slide has been arrested, or the percentage of cost reduction, or the increase in productivity, or even the increase in innovation bringing new and different products or services to market.
If the company has been highly successful, the leader will certainly be measured against her predecessors. This can be interesting and problematic at the same time. What if the previous leader “bailed” because he foresaw a change in market conditions or disruptive products coming from competitors? The new hire will have to be extra good to combat that and maintain market position.
Leaders need to really understand their markets. They need to know and they need to anticipate. This applies to those in place for a long time and those just promoted or hired. Their expectations and those of their stakeholders need to be realistic.
The right results or outcomes can be defined by the leader herself. She can announce to the world, “My success should be measured on the following five factors….. “ and then she should be held accountable against those factors. Stakeholders will then have an objective way to gauge how their leaders are doing.
Accountability is critical to the success of any business, and therefore to the success of any leader. There can be no accountability without objective measures. Company owners let themselves slide all of the time because they feel they can. They think they do not have anyone to whom they must answer. But they should. They should be answerable to their employees, whose families depend on their continued employment. They should be answerable to their financial supporters- family, investors, and banks. Owning a company does not put one above accountability.
How many times have we heard, “If it matters, measure it?” Leaders need to stake out their turf and let people know how they should be measured. Any measurement should be consistent with vision, mission and values. This should not be difficult, although in tough times it takes a bit more thought to plan tough actions out in a way consistent with values.
Many leaders want to be liked by their employees. Is it a legitimate metric to want to be liked by 95% of workers? How does that matter? How about respect- does that matter? Does increase in profit matter standing all by itself? What if it was achieved by taking away benefits or laying off indiscriminately or raising prices without warning?
Leaders may want to discuss their metrics with stakeholders to determine what matters to them. If leaders expect those they lead to be accountable, they must set the tone first. And those coming into new jobs need to be clear on how their success will be measured. Those free to set their own measures should do so and should communicate them to stakeholders.
Metrics and accountability do matter. We cannot measure everything. Choose what is really important to the success of the organization. Set the example and move the company forward. What is measured helps determine the future course for all involved.