Accountability Part 3: Metrics and Management


(This is the third of a five-part series on accountability in the new world, the increasing need for fundamental accountability in small business as the business landscape breaks apart into cyber vs. physical. Part 1 was War of the Worlds, and Part 2 was Both Sides Now.)

What if I told you I’ve built you a straw man? In my first two posts on accountability I looked at the vaporization of accountability on splintering of work into real physical presence vs. virtual or remote. As if physical presence means accountability, and working remote means the lack of it. But what if that’s not the real problem?

The real problem, is a simple combination of metrics and management. Simple to say, hard to do. Not unlike diet and exercise, or having more patience with the kids; everybody knows what’s right, but doing it is so much harder than knowing what you’re supposed to do.

And I say it’s a lot worse in small business, and entrepreneurship, than anywhere else. Why? Because in a small business setting you end up working with friends, and it’s really hard to give negative feedback to friends.

Some examples will help:

  • When I was in my 20s I knew a man who ran the 500-employee Mexican subsidiary of one of the 100 largest companies in the world.  He tried to teach me that a boss can never be a friend. In Spanish we have both the formal (Usted) and familiar (tu) forms of speech. He would never drop the formal with anybody related to the company. He had a saying he used that doesn’t translate well, but means “I can’t ever be your friend if I might have to fire you (for you Spanish speakers, it was along the lines of “A ud. no lo puedo tutear porque mañana lo tengo que correr.” )
  • I say he tried to teach me because I failed to learn that lesson. One of the strongest drivers in my building my own business was wanting to create a pleasant place to work, surrounded by like-minded people, so it wouldn’t feel so much like work. I hired people I liked. I liked them more as we worked alongside each other. I think I was pretty good at sharing the credit, but I know I was bad at holding people accountable for poor performance. Particularly when they were well-meaning honest people who came on time and worked hard during the day. Unfortunately working hard doesn’t always mean getting the right things done on time.
  • Seriously: what do you do about somebody who’s trying hard, means well, but doesn’t hold up the job? You know the answer, and so do I, but can you do it?

So through the years, watching what I don’t do well, I’ve developed my respect for metrics and management.

Metrics

It’s been a lot of years with a  lot of concentration on what’s good about business planning, and how it works in a business when it works well, that I’ve realized the magic of metrics. A good business planning process generates metrics throughout the business: not just the obvious sales and cost of sales and expenses, but milestones with dates and deadlines, and tracking of metrics like calls, presentations, programming modules, trips, key word insertions, downloads, page views, conversion rates, subscriptions, leads, and so on. For every job there’s the hope of an objective metric that people can live and work with. A good business planning process goes from the high-level general to the specific steps and then to the metrics, and tasks, and responsibilities. Make commitments.

Riddle: in the classic bacon and eggs breakfast, what’s the difference between the pg and the chicken?
Answer: the chicken’s involved, the pig is committed.

Metrics are magic. Build metrics and a planning process, and, as if by magic, you and your team members (friends, or not) are suddenly standing together looking at the metrics. The positive and negative feedback is there in the numbers. You both see them together. You both remember what the goal was, and you look together at performance.

Management

Metrics are magic, yes, but not the whole solution. Accountability means what do you — your organization, your team, your company — do about poor performance? And that’s management.

You have to ask some questions: were the metrics based on real assumptions? Were they fair and reasonable? Did everybody understand them? Did the playing field (such as budgets, tools, access) change in the meantime?

And then, as you look together at performance based on those metrics, you have to be able to be the manager and do the hard thing. I don’t think I did that all that well throughout my career. I had some successes with changing the job description for poor performers, which meant that once or twice we found a round job description for a round person who’d been in a square-person job. But I’ve also had some failures. The last time my company was named one of the 100 best companies to work for in Oregon, that honor was based on a confidential poll in which our employees gave us the worst marks for not weeding out poor performers.

I think it’s the baby-boomer ex-hippy in me, still, that many years later. As I came to adulthood in the late 60s, we all hated authority and mistrusted the establishment. That in the background makes it hard to be the hard nose manager when the company needs it.

But if you look at the long term, most companies need it. Build the metrics as the first step, track them as the second, and then follow up, the very hard third step, to hold people accountable.

Paradox

Business is full of paradox. Especially strategy and management. I find it delightfully ironic that the splintering of the workplace into virtual and remote may actually increase the likelihood of tools and metrics to help build accountability. It can separate the physical presence from the performance, and make metrics easier to accomplish. That’s for my fourth part of the series, next Thursday.

And another paradox, sort of a postscript: That highly successful business leader I mentioned in my example above, the one who said a boss can have no friends — he committed suicide.

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Tim Berry, Entrepreneur and Founder of Palo Alto Software, bplans.com and Borland International About the Author: Tim Berry is president and founder of Palo Alto Software, founder of bplans.com, and co-founder of Borland International. He is also the author of books and software on business planning including Business Plan Pro and The Plan-as-You-Go Business Plan; and a Stanford MBA. His main blog is Planning Startups Stories. He twitters as Timberry.



Tim Berry Tim Berry is Founder and Chairman of Palo Alto Software, Founder of Bplans, Co-Founder of Borland International, Stanford MBA, and co-founder of Have Presence. He is the author of several books and thousands of articles on business planning, small business, social media and startup business.