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The first lesson I learned as a plebe came from an upperclassman yelling in my face. He told me that there were four acceptable answers: 'Yes, sir'; 'No, sir'; 'No excuse, sir'; and 'Sir, I do not understand.'

Our most basic choice, the one that ground all the others, is this: Do we attend closely to the business of our choices, or do we flee from them, in arrogance, or fear, or boredom -- or some combination of all three? That's the only ultimate purpose or meaning that we can make sense of.

Every individual is the architect of his own fortune.

When all is said and done, a lot more is said than done.

Prioritization is about doing something. It's not about an excuse for inaction.

The biggest reason you do not hear much about corporate mistakes, unless they are so colossal that some government entity forces an investigation, is that most companies do not put together blue-ribbon investigative committees to find causes of failures and recommend improvements. No one would accept a statement that an airliner "just crashed-we're not sure why, but we'll try not to do it again." Yet in business, we see all kinds of failures that are not investigated in any serious depth unless laws were violated or people were physically injured.

Don't cross the line between enough and too much accountability. To what degree are we able to be accountable? Don't have people accountable for things not under their control or purview as this comes across as unfair. Our managers ask for the impossible and we complain - that's normal but not optimal. Measure the right things and draw the line between enough and too much accountability. Imposing too much accountability kills initiative. How good are your managers at giving feedback? We have to deliver feedback to require accountability. How much cooperation does something take? If a lot of cooperation, it is hard to pinpoint accountability. Finger pointing does not make it happen more quickly. Team goals may be more appropriate.

When the business plan, the operating plan, and the budget come together, you know precisely what you want to accomplish, how you're going to do it, who is responsibile, what it's going to cost, and how you're going to meet your financial and operating objectives. When combined with an effective measurement and reward system, this becomes the most powerful way to establish accountability across your entire company and achieve results.

It is not only for what we do that we are held responsible but for what we do not do.

The best corporate leaders never point out the window to blame external conditions; they look in the mirror and say, "We are responsible for our results!" Those who take personal credit for good times but blame external events in bad times simply do not deserve to lead our institutions. No law of nature dictates that a great institution must inevitably fall, at least not within a human lifetime. That most do fall - and we cannot deny this fact - does not mean you have to be one of them.

Incentives are good in principle, but did Bear Stearns get competent risk management in return for the $4.4 billion bonus pool it distributed in 2006? Does any organization have to give its CEO a $40 million bonus to secure his services? If you pay people enough money to make any future payment beside the point, don’t be surprised when they take vast long-term risks for short-term wins. In almost any pattern, overshooting produces negative returns.

In some ways, corporations are like liberal democracies. The shareholders of a company are like the people in whose interest the enterprise is run. The executive is like the government and the key to making it run successfully are the institutions that provide the checks and balances: the judiciary, the army, and bodies like the Federal Reserve Board in America have their counterparts in the board of governors, the auditors and bodies like the SEC.

Fareed Zakaria, in The Future of Freedom, pointed out how a democracy can only function well when these liberal institutions, independent of the executive, act as watchdogs and guardians of the public good. Otherwise, democracies tend towards failure. A similar conclusion can be drawn for corporations. The accountants, the boards, equity analysts et al have to be strong and independent, or the system is unbalanced.

Accountability entails being answerable to another person for a product, process, or result that is measurable in terms of quantity, quality, and time. When reviewing an employee’s role in an accountable system, three key questions should be asked: First, why does the job exist? Does it ultimately add value for the customers? (By “customers” we mean anyone who benefits from the organization’s work or products, including the patients of a hospital or the beneficiaries of a government agency.) Second, for what is this person held to account? Finally, how well does this individual fulfill that accountability?

Accountable jobs provide the platform for leadership development. Accountable work has consequences: rewards for work well done and sanctions for work that is not well done. A promotion in such a system is a move from one level of accountability to another. Performance has consequences; employees are promoted only by serving customers well and productively.

The twin sister to autonomy and freedom is responsibility and accountability. You cannot have one with out the other. If someone is given an area of responsibility, not only must they be set free to do it, they must also be held accountable for what they do. Accountability clarifies freedom. In the teams and companies where you see boundary confusion, power struggles, control, over-reaching of one’s line of responsibility, you will also see lapses in accountability as well.

When you hire people to work for you, it should be expected that they have a basic level of competence. When you simply recognize people for doing what they are hired to do, it reinforces a culture where the status quo is good enough. If the company is so risk-averse that people aren’t willing to try anything new, while all you do is reward people for doing what they’ve always done, all you’ll get is more of the same.