A while back I met with the head of human resources (HR) for a financial services company. As we sat down to start our discussion, I could tell she was frustrated. She began by saying, “I thought we did all the right things when it came to developing our leaders.” She explained that her organization had identified its high-potential leaders and created a development program for them. “We then gave them all promotions, with fancy titles and increased compensation. And now we are waiting—waiting for them to lead,” she said.
I asked her to explain further what she meant by “waiting.”
“They aren't leading,” she said. “They are waiting for permission and direction from the executive team on every issue. Or they're acting like bystanders, watching problems persist or projects derail.” She then shared what I thought was her most important insight: “It's like they don't know what it means to be a leader!”
Over the last few years, my team and I have been hearing more and more of this kind of lament from senior executives in all industries. It seems that despite all the investment in leadership development, there is a gap between what we expect of our leaders and how they are performing. As I shared in the introductory chapter, I call this the leadership accountability gap.
And since publishing the first edition of this book, it has been surprising to me to see how the ideas have struck a chord with leaders from the C-suite to the front line, from the board to HR. I started to get a sense that leadership accountability was in fact a widespread business issue. I was seeing the same level of frustration with other clients and organizations.
So in the spring of 2015, we decided we needed to conduct more research into the issue. We partnered with Human Resources People + Strategy (HRPS), the executive division of the Society for Human Resources Management (SHRM). Their membership represents the most senior HR executives in business, and we believed members could give us important insights into the state of leadership accountability in companies today.
We conducted a survey using a third-party research firm and reached more than two hundred HRPS members across North America, most of whom were HR leaders and senior executives across a wide variety of industries, representing a number of Fortune 500 companies. It was the first study ever conducted exploring the business issue of leadership accountability and the results were eye-opening:1
The collective response was loud and clear: The leadership accountability gap is real, pervasive, and a critical business issue that must be addressed.
Discovering the problem to be so widespread, my team and I decided to expand the study globally to companies in North America, South America, Europe, and Asia. A total of 2,084 senior HR and business executives participated in the research.2 The findings were dramatic—the global data was nearly identical to the findings from our first study, leading to the conclusion that the leadership accountability gap is a global problem.3
As is shown in Figure 3.1, 72 percent of the global respondents believe that leadership accountability is a critical issue in their organization. Only 31 percent of them were satisfied with the degree of accountability demonstrated by their leaders.
The consistency of these survey findings (shown below in Figure 3.2) is surprising, noteworthy, and ultimately quite telling. Based on the data we collected in North and South America, Asia, and Europe, it's also clear that the leadership accountability gap is a critical business challenge that knows no borders.
Take a moment and reflect on your own organization. To what extent do you believe it sees leadership accountability as a critical business issue? How satisfied are you with the degree of leadership accountability demonstrated by leaders in your organization?
Our survey explored other high-level aspects of leadership accountability, including the extent to which companies:
The results (see Figure 3.3) show that nearly half of the surveyed companies believe they've set clear expectations. Very few admitted to failing to be deliberate or explicit in setting expectations for their leaders. Based on our client work, we are finding that this is a critical practice for organizations to put in place as it creates the foundation for leadership accountability to take hold. I will come back to this later in the chapter.
One stark finding is that less than half of survey respondents believe their leaders are fully committed to their roles. In my discussions with many senior executives, they believe that many of their leaders are committed to the technical aspects of their roles; however, fewer of them are committed to actual leadership—managing people, inspiring teams, addressing performance issues, and building culture. Using the language that I presented earlier in this book, it's clear we have people in leadership roles who do not own their entire role. Many are part-time leaders and only pay attention to a small part of what they must do in their roles.
One extremely concerning finding for me is that only 27 percent of the respondents believe they have a strong leadership culture in their organizations. This is particularly alarming considering how many organizations need to transform themselves and need strong leadership cultures to help them be successful. This finding suggests that there is a lot of work ahead for companies to build the leadership cultures they need to transform their organizations. I have come to learn through my years of consulting that if a company has a weak leadership culture, this creates risk. The organization will not be able to effectively drive change, achieve long-term sustainable success, or attract the best talent.
A particularly fascinating finding from the study is the meager number of companies (only 20 percent) that believe they have the courage to address mediocrity among their leaders. Respondents openingly acknowledged that they know exactly which leaders are unaccountable and mediocre. However, they also admitted they typically do not deal with these leaders in a proactive manner. The unfortunate impact is that in turn breeds further mediocrity, increases the lack of accountability, and exacerbates the core problem that companies face.
Satisfaction with leadership was explored at three levels: demonstrable accountability from executives, mid-level, and the front-line leaders. Figure 3.4 presents the findings. While the data points to greater satisfaction with executive-level leaders, it's far from an overwhelming endorsement. Taken collectively, these findings suggest there is quite a lot of work ahead for organizations to develop strong leadership accountability across all levels.
As one senior human resources executive shared with us in France during a customer event, “Senior management must be accountable. If there is an accountability gap there, then there will also be one among their direct reports and other leaders below them. An organization will not be successful.”
As you reflect on these particular findings, how would your organization stand up against these results? Will satisfaction by level be stronger than the above or weaker?
My team and I were curious to see if there was any connection between strong leadership accountability and the performance of a company.
We asked survey respondents to self-identify whether their organization was an industry-leading (top quartile) performer, an average/above-average performer, or a poor performer (bottom quartile) relative to competitors in their industry. Twenty-nine percent of respondents self-identified their companies as industry-leading performers; 47 percent were average performers (not industry-leading, but not low performers); and 14 percent self-identified themselves as below-average or low-performing companies.
Although leadership accountability is seen as critical among all respondents regardless of their performance, clear differences arise between industry leaders and the rest (see Figure 3.5). Industry leaders reported a higher overall degree of satisfaction with leadership accountability, invest more time in communicating clear expectations, and report having a higher overall proportion of accountable leaders. It's clear these companies do not become leaders in their field by accident - strong leadership accountability appears to be part of their formula for success.
These findings suggest there is a strong connection between leadership accountability and company performance. This makes perfect sense. If you have a weak leadership culture with unaccountable leaders, you will have a difficult time driving industry-leading performance in your company. Mediocre leaders will never get you to your desired outcomes. They never have, and they never well.
Our study also explored three key dimensions of leadership accountability (Figure 3.6):4
The pattern I shared above continued in these findings: industry-leading companies consistently outpaced the average and low-performing companies in each of these three dimensions.
When asked about the leaders in their companies who are truly accountable, respondents considered the frequency of ten key behaviors. We found a high degree of consistency among the key behaviors identified, regardless of the performance of the company. In other words, real leadership accountability looks the same no matter the performance of a company.
However, as shown in Figure 3.7, there are some very interesting net differences in frequency of behaviors between the industry-leading companies, average and below average performing ones.
The most notable net difference among industry leaders and the average and low-performing companies were revealed in the following top five behaviors of accountable leaders (Figure 3.8).
These five behaviors tell the story about how accountable leaders behave differently than other leaders. During our customer events we also engaged in some meaningful discussions with our clients. Here's a closer look at the findings from those discussions:
The five behaviors described above begin to create a profile of what a truly accountable leader pays attention to and shows which behaviors have the greatest impact. Take a moment to consider whether you consistently demonstrate these five behaviors of truly accountable leaders.
Now let's shift our focus to the other behaviors we explored: collaborating with peers to break down silos and align efforts, acting in the best interest of the whole organization, and building the capabilities of their teams. It was revealed by many of our customers that, increasingly, these behaviors are becoming more important in the culture of many organizations—particularly those with matrix structures. The nature of work in most companies today is horizontal, requiring leaders to collaborate, act in the best interest of the whole organization, and develop their teams to engage effectively with other departments.
Minimizing unhealthy politics was low for all three segments of companies, suggesting that all leaders struggle to address these behaviors within their teams. This reveals a pervasive accountability issue throughout an organization, underscoring the importance of leaders to be accountable and lead by example.
An intriguing finding was that among low-performing organizations, leaders focus a lot of their energy on developing their own leadership capabilities. While conventional wisdom suggests it's important for leaders to invest in their own development, this behavior didn't factor in a significant way in the industry-leading companies.
After a deeper exploration of the findings in discussions with customers and survey respondents, three hypotheses emerged to try to explain the data. The first hypothesis suggested it is possible that unaccountable leaders may spend too much time developing themselves, at the expense of engaging in some of the other behaviors; personal development may become an avoidance strategy employed by some leaders. The second hypothesis was that leaders in low-performing companies know that they are struggling to meet the demands of their role and, as a result, are trying to improve themselves by investing in their development. Finally, some argued that truly accountable leaders develop themselves on the job by engaging in the more difficult leadership behaviors—they challenge themselves to grow every day.
There was no clear consensus to explain the finding; however, it suggests that companies should take a second look at how much time leaders are spending developing themselves and whether this investment is warranted.
The study revealed some striking differences between industry leaders and the other companies when it came to the organizational practice put in place to build strong leadership accountability (see Figure 3.9).
Industry-leading organizations considerably outpaced average and low-performing companies across every organizational practice we examined. In two key areas—“ensuring that leaders understand what matters to customers” and “defining leadership expectations”—the gap was even greater, suggesting these are critical practices that companies must seriously consider addressing in their organizations.
During our discussions with customers and survey respondents, some valuable insights emerged regarding each of the organizational practices.
As you reviewed this list of organizational practices, which ones are currently strong in your organization? Which need to be strengthened further in order to build strong leadership accountability?
As presented earlier in this chapter, only 27 percent of companies surveyed believe they have a strong leadership culture. When looking specifically at culture, stark differences arise among industry leaders, average performers, and low performers in seven of the ten attributes explored in our research (see Figure 3.10).
Ultimately, when an organization has truly accountable leaders that are supported by key organizational practices, then a strong culture of leadership accountability will emerge. One client, an executive VP of business development based in Singapore, really summed up the key point nicely when she said, “The senior leaders create the culture and set the tone for the organization. It's imperative that they drive the set of behaviors which influence the behaviors of the next line leaders.”
This seems to be what many organizations struggle to establish. In our customer events with leaders around the world, the topic of leadership culture generated the most lively and spirited conversations. It is clear to me that leadership culture is a top-of-mind business issue with senior executives globally. Below is a summary of the key themes discussed related to the attributes of leadership culture that we explored in our research. As you read through each one, consider the extent to which these are evident in your own organization's leadership culture:
The findings from our global study reveal important insights on a critical business issue that companies worldwide are facing—the leadership accountability gap. Not only do the study findings provide a deeper appreciation of what leadership accountability is and what's required to build it, but they also demonstrate the strong connection to company performance, namely that industry-leading companies outpace average and below-average companies regarding their commitment to building leadership accountability.
Collectively, the findings of our global study are extremely relevant today, especially as companies contend with an ever-changing business climate, disruption on all fronts, and the need to transform themselves to remain viable and relevant. One global head of human resources based in the United States summed it up best when he shared with me his perspective: “We are going through quite a bit of change in our company. We need our leaders to be truly accountable if we have any chance of successfully navigating through it all.” This is the challenge facing all leaders and their companies today. What is the way forward? I believe it involves understanding the idea of a leadership contract. This is the basis of real leadership accountability, and this is what the rest of the book will be focused on.
We will start by exploring why we need a leadership contract. Then we will examine each of the four terms of the leadership contract and how they apply to leaders at all levels of an organization. Finally, we will conclude the book by looking at how you can live up to the four terms of the leadership contract in your own role and how you can embed the ideas into your organization. Let's begin your personal and organizational journey to creating strong leadership accountability.