Tag Archives: accountability

Planning: It’s About Management and Accountability

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(Note: this is an excerpt from my book The Plan-As-You-Go Business Plan, which is posted as a web site where you can read it online.)

Every small-business owner suffers the problem of management and accountability. It’s much easier to be friends with the people you work with than to manage them well.

Correct management means setting expectations well and then following up on results. Compare results with expectations. People on a team are held accountable only if management actually does the work of tracking results and communicating results, after the fact, to the people responsible.

Metrics are part of the problem. As a rule we don’t develop the right metrics for people. Metrics aren’t right unless the people responsible understand them and believe in them. Will the measurement scheme show good performances and bad performances?

The metrics should be built into the plan. Remember, people need metrics. People want metrics.

Then you have to track. That’s where the plan-as-you-go business plan creates a management advantage, because tracking and following up is part of its most important pieces. Set the review schedules in advance, make sure you have the right participants for the review, and then do it.

In good teams, the negative feedback is in the metric. Nobody has to scold or lecture, because the team participated in generating the plan and the team reviews it, and good performances make people proud and happy, and bad performances make people embarrassed. It happens automatically. It’s part of the planning process.

And you must avoid the crystal ball and chain. Sometimes — actually, often — metrics go sour because assumptions have changed. Unforeseen events happened. You manage these times collaboratively, separating the effort from the results. People on your team see that and they believe in the process, and they’ll continue to contribute.

Crystal Ball and Chain

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This is an answer to a question I get way too often. I call it the “Crystal Ball and Chain” problem. I’ve run into it several times as I’ve introduced the planning process into a new company or organization.

People in the organization sometimes fear business planning. In the background, the fear is related to accountability and commitment. Usually they don’t realize it. They state their objection as:

“But how can I possibly know today what’s going to happen six months from now? Isn’t that just a waste of time? Can’t it actually be counter-productive, because it distracts us, and we spend time trying to figure out things in the future?’

I’ve heard this from some people who really did seem to be worried about accountability and commitment, and I’ve heard it from some who were stars on the team, not worried at all about their own position, but legitimately worried about the best thing for management and getting work done.

The answer is that projecting future business activities isn’t a ball and chain at all, because in the right planning process the existence of the plan helps you manage effectively.

Here’s a concrete example: it’s September and you are developing your plan for next year, which includes an important trade show in April. You plan on that trade show and set up a budget for expenses related to that trade show. Even though it’s September, you have a pretty good idea that this will happen in April.

When January rolls around, though, it turns out that the trade show that normally takes place in April will be in June this year. Does that mean the plan was wasted time? Absolutely not! It is precisely because you have a plan running that you catch the change in January, move the expense to June, and adjust some other activities accordingly.

In this example, the plan isn’t a brick wall you run into or a ball and chain that drags you down; no, it’s a helpful tool, like a map or even a GPS device, because it helps you keep track of priorities and manage and adjust the details as they roll into view.

It’s normal for the crystal ball and chain to appear as an objection when a planning process is introduced. The solution is simply good management. The people involved in implementing the plan learn with time how regular plan review sessions help them stay on top of things, and when assumptions change, how the plan changes. Changes are discussed, nobody gets fired, and you have better management.

The underlying idea here is directly related to the paradox in yesterday’s post: business plans are always wrong, but still vital to good management.

(Image: my mashup of two shutterstock.com images)

Accountability Is Going to Whack Us Good

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Here’s an interesting quote, from an email:

Did you know that within the next five years it is expected that 63 million employed Americans will telecommute either regularly or occasionally?

accountabilityI got this in a press release from AVG Technologies, the anti-virus software, about the dangers of people working offsite. It came with a link to AVG Technologies’ Community Powered Threat Report.

To AVG, with good reason, this is about threats and hackers. To me, however, this is a reminder that the thing we’ll be watching, worrying about, and working on, in the foreseeable future, is accountability.

And it’s not just the boss keeping track of us. It’s just as much us, workers, having away to stand proud with measurement of what we’re really accomplishing. It goes both ways.

We’re all going to need a new way to track progress, measure performance, motivate team members, and work together. My biased view is that accountability comes through business planning, which, when done right, sets goals and measurements for the team and individual team members.

Part of good planning is getting each member of the team to agree on the objective, measurable numbers to track for his or her area. That might be dollars, delivieries, units, trips, presentations, leads, page views, unique visitors, subscribers, Klout score, posts, comments, phone calls, or whatever; but it’s a number that’s objective and trackable. And then the planning process means tracking those numbers, sharing results, and talking about it. That becomes management by collaboration, and it generates accountability via teamwork and regular process. That’s the best way to do it, in my opinion.

Contradiction and Paradox Are the Spice of Business

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Measurement, metrics, and accountability are everything. Except when they aren’t.

Yes, I contradict myself. No, I don’t mind. Contradiction and paradox are reality in business as in life. As soon as you develop a general rule, you find exceptions.

And I have posted here both the magic of metrics, and do we undervalue marketing we can’t measure. Like the old folk song says, both sides now.

So with that in the background I read with relish Management by Imagination on the Harvard Business Review’s The Conversation blog. Here’s the lead:

The perception that good management is closely linked to good measurement runs deep. How often do you hear these old saws repeated: “If you can’t measure it, it doesn’t count”; “If you can’t measure it, you can’t manage it”; “If you can’t measure it, it won’t happen”? We like these sayings because they’re comforting. The act of measurement provides security; if we know enough about something to measure it we almost certainly have some control over it.

But however comforting it can be to stick with what we can measure, we run the risk of expunging something really important. What’s more, we won’t see what we’re missing because we don’t know what it is that we don’t know. By sticking simply to what we can measure, we come to imagine a small and constrained world in which we are prisoners of a “reality” that is in fact an edifice we’ve unknowingly constructed around ourselves.

The Harvard post goes on to question the more extreme exercises of metrics:

if you stick to measuring what you can already measure, you cannot create a future that is different than the past.

On the other hand, there’s no denying that the underlying mathematics of computing, as applied on the Web, are total luxury of measurement in today’s business world, especially when compared to what we all did as recently as the 1980s and early 1990s. Back then we’d spend the marketing money on ads and direct mail and such, and then hope for the best, waiting weeks and months to get at best a distorted view of results. Now we get clicks and conversions and return on investment almost instantly.

When I worked as a wire service journalist in the 1970s, the turn of a headline made a huge difference. So we crossed our fingers and hoped it would work. We’d find out the next day. Today the industry leaders like the Huffington Post test headlines, and adjust them, in real time.

Conclusion: I love the truth of case by case judgment of so much of real business. Know the rules, follow them when it makes sense, and break them when it makes sense. Paradox and contradiction are the spice of life. And good business.

Or, if you prefer, take this, straight from the Harvard blog, as a conclusion:

We need to get away from all those old sayings about measurement and management, and in that spirit I’d like to propose a new wisdom: “If you can’t imagine it, you will never create it.” The future is about imagination, not measurement. To imagine a future, one has to look beyond the measurable variables, beyond what can be proven with past data.

(Image credit: Vlue/Shutterstock)

Do You Undervalue Marketing You Can’t Measure?

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Measurability and accountability in marketing is a luxury we pretty much have now but we didn’t always have. Before the Web, we often guessed what would work, then spent the money to place the advertising or do the event or distribute the collateral. Then we waited, and hoped it was working. Then we’d guess again afterwards about whether it had worked or not.

Sure, we’d ask customers where or how they’d heard of us, but most of them didn’t know. Less than a third would even be able to answer that question. Of those, half would answer wrong (like mentioning a publication that we’d never advertised in).

That was pretty much it in the 1980s and early 1990s. We didn’t have clicks, click-through, search terms, conversion rates, and all that. Metrics. Direct mail, which is used so much less these days, was the best for measurability and accountability; some companies used it more than other marketing tools because of that advantage.

But nowadays, here’s the rub: do we now devalue marketing efforts we can’t measure?

For example, getting mentioned in a major publication. Or being included in somebody’s book. What if those marketing wins produce a value we can’t measure? We don’t know how many people have purchased because of them. We’ll never be able to tell how many people saw the mention and then visited the website, or, better yet, bought the product. Does that make those marketing efforts less valuable? Do we start underestimating and under-using these parts of the marketing mix because we can’t produce the metrics?

Accountability Part 5: Management

Management,

(This is the fifth and final part of a five-part series on accountability posted first on Small Business Trends. The search box on this blog should get you the first four. )

In 1998 I was walking to lunch with the accountant — outside accountant, CPA, partner in a regional firm — who handled our Palo Alto Software business. Making conversation, he asked me to talk about growth. We had 20 employees then. He said:

The hardest growth point in business is from 25 to 50 employees.

I didn’t really believe him then. And I believe him now. Palo Alto Software has more than 40 employees now. We went up to 36 by 2001, then back to 22 later that year (recession problems), and we’ve grown back to more than 40 since. And I’m pretty sure now that the stumbling block, the traps and pitfalls he was talking about, might be called structure, or scaling, or management; but all of those roll up into accountability.

For the record, I do have a fancy graduate business degree, and maybe they were teaching this stuff when I was in business school and I just wasn’t paying enough attention; but this feels like stuff I learned by doing, not in a classroom.

I think I can summarize this series with the following seven points:

1. Accountability is critical to small business growth.

I refer back to my previous post on the accountability dip. People work together well and easily and often as you grow from one or two to 10 or 20; but somewhere between 20 and 50 the structure gets more important. You need to figure out who reports to whom and who’s responsible for what. Just assuming things will get done doesn’t cut it.

This takes a change in culture. Sometimes it’s a drop in perceived quality of office life. It’s hard to do.

2. It’s about people.

While it relates to tools and planning and locations in points 3, 4, and 6, it really comes down to people skills. There are built-in hard moments, when people fall short of expectations and somebody has to follow through with acknowledging disappointment.

3. Tools can help.

I wrote about tools in part 1, war of the worlds. Basecamp, Zoho Google docs, Box.net, GotoMyPC, Webex, Wetpaint, shared RSS, Skype, Yammer, all instant messengers, and (disclosure: I’m involved with this one) Email Center Pro.

Tools can help keep people close, focus on specific goals, metrics, tracking, and analysis. Think of the magic of pay-per-click advertising on the web, and apply that delightfully high level of analytics — an enormous luxury compared to what we used to work with early in my career — to projects, and work, even emails and telephone answering. Break things down into objective measurement and analysis. That really helps. I predict we’ll get more tools and better tools over time, as work spreads out onto the web. These are all tools that build communication and contact.

4. Place matters less every day.

The past is accountability by time clock and physical location. Who’s in the office, and how much. The future is remote working and working from home and teams connected virtually by instant messenger or yammer and basecamp and the like. I’m very close to a CTO who manages a team of programmers in four or five different countries, in real time.

5. Metrics are magic.

I called my part 3 Metrics and Management. The more metrics in the business, the better. Not just sales, but calls, trips, minutes, leads, presentations, milestones, bug fixes, minutes per call, or whatever you can. People like to watch their own metrics, and metrics make the hard side of accountability — the bad news — easier to manage.

6. Planning process is critical.

Not just a plan, but planning process: the plan has to set the expectations and establish the commitments, and the planning process has to track results and changing assumptions and revise and manage. Metrics are about tracking, and they’re part of planning. A business plan is a necessary but not sufficient condition — you have to follow up on results, watch changing assumptions, and make the course corrections. You can actually do it without a business plan if you have all the metrics and tracking set up, but by the time you do, you have a business plan whether you realize it or not.

7. More than anything else: set expectations and follow up on performance.

It’s sort of like this: if I were to write a book on successful dieting (and I can’t; I’d have to lose about 10 pounds first) it would have one page, saying: “Eat less. Get more exercise.”

Similarly, the complete book on accountability in small business could have one page saying: “make expectations explicit and measurable. Then measure performance. Reward good performance and make the disappointment for poor performance clear and explicit. Over time, weed out bad performers.”

That’s a lot easier to say (or write), I’m afraid, than to do. And on this one, I’m not pretending I’ve been that good at it, either. But I do know that it’s critical to small business growth.