Challenging and uncertain times fuel organisations' drive for change. Companies have a misplaced belief that as external environments change, this should be matched with change on the inside. Perhaps this is the time when they should be channelling all their energy towards the customer. Instead, businesses get stuck focusing inwards.
A common reaction to external change is to centralise disciplines in the guise of streamlining resources. This just disguises inefficiencies and complicates reporting lines.
Matrix structures have become the buzz in large multi-regional businesses but small and medium enterprises (SMEs) can fall into this trap as well.
It pays to produce an accountability chart, which describes the overall purpose of each position and how they work together to achieve business results.
It would be worth defining the difference between accountability and responsibility at this stage. Accountability lies with the ultimate person looking after a result. Responsibility can be held by multiple people, all contributing to the same result. For example, multiple sales people are responsible for driving business, but the sales manager is ultimately accountable for the hitting the final revenue figure.
Businesses make common mistakes that may complicate the work structure. For instance, the human resources division is often held accountable for the performance of employees, whereas this should actually be the accountability of the direct line manager. In performance management, HR plays a significant role in establishing consistent procedures to measure performance and supporting and directing other divisions to comply by these guidelines.
Another scenario is when companies make the finance department accountable for allocating the budget, when they should be accountable for tracking budgetary expense, providing solutions to better allocate resources or raise warning signals when the business is deviating from plan.
Too many hats
In SMEs, this complexity can come from individuals wearing too many hats, especially in a family-owned or partnership-based business. Employees can get different answers on the same question from each senior manager. Alignment and regular communication are important in the family business arena.
In fast growth SMEs and matrix organisations, having agreed sources for data is crucial. If you can get your sales results from three different sources, you might end up with three different reports. You are left with the question, "Who are actually the owners of reliable data in your company?" Each data owner must ensure they have their source data clearly labelled.
Mixing data sources
Where processes cross over, an agreed ‘truth' needs to be established. Once you have made a decision on this, stick to it and don't mix data sources.
Accountability is the most commonly desired competency sought by CEOs. Holding people accountable ultimately drives change and performance, even in uncertain times.
However, you can't hold someone accountable if two or more people are in charge of the same thing or if data is coming from a variety of sources conflicting with each other. You can't fairly reward employees for performance if you don't have clear lines of accountability.
Work with your senior team to produce an accountability chart, along with links to profit and loss ownership and clear sources of data. You will be surprised how it helps create clarity out of confusion.
The writer is the CEO of biz-group, a consultancy.