Legendary basketball coach John Wooden once said,
“I wanted to win every single game I played in or coached. But I understand that ultimately the winning or losing may not be under my control. What was under my control was how I prepared myself and my team. I judged my success, my winning, on that. It just made more sense.”
This statement captures the essence of functional accountability in business. Winning or losing are not in your direct control but more so in someone’s influence. In today’s fast-paced and often unpredictable business landscape, the ability to distinguish between factors within our direct control and those within our influence is paramount. To thrive in this environment, understanding and implementing the Functional Accountability Chart can be the key to unlocking scalable success and growth.
Central to functional accountability is mastering ‘The Circle of Control’:
The art is in:
Focusing on What's in Your Control: These are the factors and actions directly under your influence that you can manage and manipulate to achieve desired outcomes.
Trusting What's in Your Influence: These are the areas where your actions and decisions significantly impact outcomes, even if you don't have direct control over them.
Avoiding Being Distracted by What's Out of Your Control: External factors like the economy, competitors, or politics can be distracting. While they may influence outcomes, they are beyond your control, and focusing on them can lead to inefficiencies and missed opportunities.
Let’s take a look at how this can show up in your organization.
Functional accountability shifts the focus from mere activities to the desired outcomes. If you're responsible for the outcome, understanding the levers to pull is essential. Ultimately, you're accountable for winning, and if you fall short, it's crucial to know why and be able to outline your plan to succeed next time.
The Functional Accountability Chart serves as a strategic roadmap, guiding you to:
Organizations are built and run by people. You need to attract, retain, and develop the best people to drive your business forward. When you have the right people in the right roles doing the right thing, the execution of your strategy is 80-90% solved.
When assessing your people, the best place to start is at the top – your executive level team. Use the Functional Accountability Chart (or FACe) to clarify who is responsible for each essential business process and how that person will be held accountable for their performance.
Out of all of these questions, the fourth one is the most delicate question to answer. However, there comes a point where you and your organization may outgrow people. If an employee is not growing with you, it’s time to make a difficult decision.
Tip: Don’t forget to ensure that key elements of your Profit & Loss (P&L) and Balance Sheet (BS) have someone accountable.
How do you know if you've won the quarter? A true measure of success should encompass:
What a Functional Accountability Isn't:
Here’s how different departments in an organization might show up:
For example, the marketing department should define winning by leads generated or conversion rates. The amount of time people download your content or click on your ad isn’t enough. While they are leading indicators, they shouldn’t be your end goal.
At the company level, we have KPIs that are always part of your income statement. These are the true definitions of winning for the company.
You may have noticed that I’ve excluded a certain popular company KPI from the list – revenue. Break the habit of thinking and communicating about revenue. Instead, focus on profit and cash. Never forget:
Revenue is vanity.
Profit is sanity.
Cash is king.
Business leaders can fall in love with revenue without an accurate understanding of the implications on profits and cash flow. The best entrepreneurs aim for sustainable growth by prioritizing profit measures, like gross profit dollars, over revenue dollars.
Answer the following questions:
a. When you have a good month/quarter, why did you win?
2. What went wrong when you did not deliver?
b. When you have a bad month/quarter, why did you miss it?
A construction company client was falling short of their profitability targets when we were invited to assess the situation. One cause identified were project delays and delayed billings. Subcontractors were missing their invoice due dates, causing these invoices to roll over into the next month. To address this, the company began tracking the percentage of subcontractors submitting all invoices on time and then each job’s percentage complete against the master schedule. These leading indicators, coupled with related operational changes, significantly improved the company's revenue generation, cash flow, and overall profitability.
Managing a business can be very much like driving a car. For example, what would happen if you covered your windshield with black paint and were asked to drive a route ONLY looking through the rear-view mirror? Would it be possible? What words would you use to describe this experience? How about the other way around? Driving a car without a rear-view mirror?
As you can see from this analogy, some of the most important information for avoiding peril and successfully navigating difficult terrain (or markets) is how far ahead you can see. Leading indicators help you to look ahead. When you drive at night, your headlights have to shine out farther the faster you are going – to give you visibility to drive safely. Leading indicators are your headlights, helping you see what’s ahead.
However, seeing what you have covered over a period of time is also important. How long did it take you to get to your first milestone? In growth companies – and businesses – we call these lagging measures. While leading indicators are typically measured daily or weekly and predict winning, lagging measures are typically measured and reported weekly or monthly and define winning. The most successful growth companies measure and monitor both for successful development and execution of their quarterly and annual plans.
The right measures enable you to answer these three questions at the end of each week:
Even if you’re missing your goal, you can find good news in one of these indicators and anticipate trends. For instance, you might have had a good week but be off-track for your monthly goal. Yet, your performance could be trending positive.
Employers freely give autonomy to those willing to be accountable.
Accountability is difficult to mandate. It only happens when your team makes the choice to commit to specific results. Here are five steps that can help you foster a culture of accountability.
Mastering functional accountability is about understanding your circle of control, defining winning clearly, and holding yourself and your team accountable for results. By focusing on what's within your control, leveraging your influence, and aligning around functional capabilities, you can create a winning strategy that drives sustainable growth and success.
Ready to take your company and team’s growth to the next level? I'm excited to offer you the chance to download the tools you need to unlock success the RISE way. If you're looking to grow your business and team, these tools will help you document your goals and keep yourself and your team accountable.