Avoiding Owner Conflicts Through The Use Of Accountability Systems

Avoiding Owner Conflicts Through The Use Of Accountability Systems
There are two partners in a business. One thinks he does all the important work while his partner is coasting for the ride. The other thinks exactly the same. Lacking either a clear organization plan or an organized system of communication, it is not uncommon for owners to have only a limited idea of what their partners do or how well they are doing it. This problem is compounded because partners form businesses they initially assign tasks according to perceived strengths. But roles and responsibilities evolve incrementally and change over time.

Accountability Systems Take Out the Emotion and Opinion
Accountability systems include any reporting/management mechanism that tracks the assignment and accomplishment of work. They can be automated or not, but have certain mandatory features.

Accountability systems clearly track accomplishment…what is done and what is not being done, who is doing things and who is not.

Why Would Owners Want Accountability Among Themselves?
This brooks the question why would owners want such accountability? In our years of working with business owners, one sees the opposite, a distinct tendency to avoid accountability. The simple answer is if owners want a clear open relationship based upon a mutual sharing of responsibilities and rewards, such systems are mandatory. For partnerships to succeed, they must be built on mutual performance and well as mutual trust, affection, goals, etc.

Three Owners Rebuild A Relationship
This client company was a distributor of building supplies. It had been founded by three men who had been with a public company in the same line of business and had decided to go on their own. Over a number of years the company had grown and it faced the usual challenges and hurdles confronting a new business but, by and large, had prospered. The bubble economy of the late 1990’s had brought rapid expansion and profit growth to the company. When the bubble burst, the partners found that they had overextended themselves. Their company entered a rough period.

Hard times have a way of testing relationships. Behavior and performance that is tolerated when times are good are not when times are troubled. The three owners were experiencing great friction. There was finger pointing and a lot of “should haves” directed at each other. A friend of one of the partners, a former client of The Podolny Group, suggested they contact us.

Going through the Podolny Method with them, we found that the job and performance definitions for each of the owners were loose in the extreme. There were no established goals, metrics or performance measurements. There was data, but too much and not really useful.

Accountability 101
We recommended that the implementation of an accountability system as a potential solution to the owners personal issues. Using one of our strategic partners, we sent the owners to a management training boot camp to learn the basic philosophies and tools of accountability systems. This was followed by our facilitating with them the development of appropriate goals and critical performance measurements for the company. It included specific performance assignments for each of the owners along with the appropriate accountability system components. A particular focus was simplifying the data being used to focus on a few critical numbers and ensuring there was a feedback mechanism for all involved.

Implementation
Initially we focused on the owners. To their credit, each made a true commitment to using the new systems even though in many ways it was counter to their intuitive mode of operating. A year into our implementation, the tension within the ownership group had reduced dramatically. Although the company still had problems, the information and understanding between the owners had grown which created mutual confidence. In the second year they expanded the system within the company. As the economy bounced back, the company was been able to drive performance to new levels. The relationship between the owners was never stronger.

The best relationships are based upon mutual confidence and trust. Accountability systems can provide owners a tool to ensure such confidence and trust.