Tag Archives: BP

Accountability in Leadership

It’s hard not to think about accountability as we watch the Gulf Oil spill go into it’s 2nd full month, or as we read about Gen. Stanley A. McChrystal’s actions and comments in this months RollingStone.

Recent technology news also brings up questions of accountability as we learned of AT&T exposing more than 100,000 iPad user accounts through an unsecure web application, or as we watched Facebook struggle to resolve it’s privacy issues.

As I follow these stories, I find myself thinking about Accountability in Leadership and how that responsibility shapes and drives the culture of a company.

Defined – Accountability is a concept in ethics and governance equated with the functions of responsibility and liability.

In Action – Accountability is the acknowledgment and assumption of responsibility for actions, products, decisions, and policies within the scope of the role.

In the examples cited responsible parties failed to demonstrate accountability in leadership, BP failed in actions, decisions, and policies, Gen McChrystal (a highly decorated soldier) failed in actions, while AT&T and Facebook’s products failed.

BP’s failures are by far the most tragic, the decisions they made, the policies they created, and their actions have led to the disaster that continues to destroy our coasts and peoples lives.

Gen McChrystal’s comments and actions (as described in RollingStone), where not in alignment with his role which subsequently lead to his resignation.

AT&T and Facebook may have suffered the least from the problems surrounding their products, but that is more a function of exclusivity rather than a lack of concern from the users.  There is strong evidence that customers will leave both AT&T and Facebook should competitors gain a competitive advantage.

Addressing failures in accountability begins with a focus on Ethics and Governance

Ethics (the philosophy of good and bad, right and wrong, justice, and virtue, etc.) and Governance (accountability for consistent, cohesive policies, processes and decision rights) have become focus points in MBA programs following the financial crisis in 2008.

Business schools from Harvard to Berkeley are incorporating lessons from the crisis into their programs to help students avoid repeating the same mistakes.  Among the lessons:

  • Question assumptions behind models
  • Probe for better information about complex products
  • Don’t let greed motivate decisions
  • Understand the role of regulatory agencies and governments

Some argue that ethical behavior cannot be taught and that has to be something that an individual learns as they grow into adulthood.  This is not the first time business schools have focused on ethics and governance following a crisis, ethics classes followed Enron’s collapse, and special emphasis was placed on Sarbanes-Oxley before the collapse of 2008.

Moving Past Short Term Crisis response requires a change in business culture

Crises are unique, their characteristics include:

  • They are unexpected
  • They create uncertainty
  • They are seen as a threat to goals

For years, business leaders have demonstrated their ability to side step crises, and in the process have created a culture that values short term solutions over long-term resolutions.  Going forward leaders must focus on long-term resolutions by turning the crises businesses face into processes of change and transformation.

It is no longer enough to ask, how do we avoid this the next time, rather we must question the assumptions and perceptions behind the models and theories that lead to the crisis.

How do they accomplish this?

Leading companies understand that accountability in leadership is a part of their culture that they must develop and manage.  Examples of these leading companies that develop and manage their culture include, Procter & Gamble, General Electric, McKinsey, Southwest Airlines, and Goldman Sachs.  If your company doesn’t have the benefit of management universities then look for candidates with:

  • MBA’s that integrated ethics lessons into coursework
  • Organization and Business Diversity
  • Collaboration and Teamwork skills and accomplishments

In a recent Newsweek interview John Chambers, CEO of Cisco, suggested that, “a huge part of a leadership role is to drive the culture of the company and to reinforce it.”

Robert Widing, Provost at Thunderbird School of Global Management in Glendale, Ariz., observed that the fiscal crisis in 2008 exposed leaders’ shortcomings, “The roots were in greed and incompetence.”

The bottom line, Accountability in Leadership is a responsibility that shapes and drives the culture of a company.