Ulrich Pidun, Sebastian Stange

In most firms, incentives are tied to company or business unit performance. The consequences of large investment decisions typically take too long to materialize to have an impact on an executive’s bonus or promotion. This can lead to moral hazard, especially when managers expect to move on after a couple of years in a position.

We recommend tying personal targets and incentives to the success of … [ Read more ]

Rosabeth Moss Kanter

The tools of accountability — data, details, metrics, measurement, analyses, charts, tests, assessments, performance evaluations — are neutral. What matters is their interpretation, the manner of their use, and the culture that surrounds them. In declining organizations, use of these tools signals that people are watched too closely, not trusted, about to be punished. In successful organizations, they are vital tools that high achievers use … [ Read more ]

Eric J. McNulty

No organization is perfect and there will always be flawed people who make bad decisions or take ill-advised actions. But the more comfortable the many good people in your company become at telling truth to power and the better the powerful become at hearing it, the less likely you are to confront an uncomfortable truth about your organization in the headlines. Resolve the small issues … [ Read more ]

Eric J. McNulty

It can be easy to reduce malfeasance to the acts of a few bad apples. This kind of thinking absolves the organization, and even the larger system, of blame — it’s a comfortable place for those invested in the status quo. I take a lesson from a healthcare system where I conducted a number of interviews earlier this year. Their quality ratings had gone from … [ Read more ]

Peter L. Allen

Managers have to live with the results the people on their teams produce, so managers should be empowered to make relevant decisions and held responsible for outcomes. If HR constrains decisions too closely—by determining who should be hired, how much they get paid, or their performance ratings—managers no longer have the freedom to obtain the results they desire. In that case, it is neither logical … [ Read more ]

Stephen Shapiro

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 … [ Read more ]

Henry Cloud

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 … [ Read more ]

Brian Dive

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, … [ Read more ]

Amit Varma

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 … [ Read more ]

Richard P. Rumelt

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 … [ Read more ]

Jim Collins

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 … [ Read more ]

Jean-Baptiste Molière

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

Bob Prosen

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 … [ Read more ]

Laurence Haughton

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 … [ Read more ]

Robert Mittelstaedt

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 … [ Read more ]

Bjorn Lomborg

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

Lou Holtz

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

Apius Claudius

Every individual is the architect of his own fortune.

Mark Kingwell

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.

James Kimsey, ’62, founding CEO, America Online

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.’