The "4-C" Framework to Increase Accountability

By Richard Coughlan, Ph.D.

During my remarks at the CVAA Annual Breakfast in July, I briefly mentioned a framework we use with our clients to boost accountability and strengthen decision-making. I appreciate VAMA allowing me expand on that framework in this month’s newsletter and look forward to your feedback.

The key to building a culture of accountability is aligning four important components in your organization:

Culture. Perhaps the largest influence on employee decision-making is an organization's culture, defined as the core beliefs shared by members of an organization. At the tail end of my recent talk, I distributed a handout describing eight different kinds of culture.

An organization’s culture provides answers to questions about the main goals of the business and the proper means for achieving those goals. Included among these answers are guidelines for interacting with others inside and outside the organization. In a very important way, culture provides implicit guidelines for decision-making.

Code of ethics. As firms grow, guidelines are made more explicit in a code of ethics or a statement of values. Not surprisingly, the content of such codes varies widely. Some are simply a list of actions allowed or prohibited while other codes address important values more generally. From an accountability standpoint, among the important questions to consider are:

1. Did organizational members at all levels have input in creating or revising the code?

2. Does the code truly reflect the organization's values?

Communication. Three aspects of a firm's communication system deserve attention by those interested in accountability. First, how do leaders communicate the firm's expectations to others in the organization? It might be through employee handbooks, codes of ethics, training programs, or informal conversations. Of course, the message is also delivered through the behavioral examples of leaders.

Second, what opportunities do employees have to initiate conversations about thorny issues to those at higher levels? Many companies have created ethics offices and hotlines to encourage employees to discuss their concerns. Some type of system to encourage upward communication is crucial.

Third, are employees encouraged to talk about issues within their own departments and across the organization? Integrating accountability into everyday conversations goes a long way toward improving decision-making. Those who frequently think and talk about key issues are bound to choose the proper course of action more often than those who only consider values during times of crisis.

Compensation. A final explanation for a lack of accountability is an incentive system that inadvertently rewards unintended behavior. What actions are rewarded, financially and otherwise, in your firm? Think beyond quotas and incentives to the criteria used for promotion and job assignments. Are there clear standards for advancing in the organization? Do these standards reflect the values espoused by the organization?

While any of the four major topics addressed above can serve as a starting point for a discussion on accountability, they should not be treated independently. For example, changing a firm's culture often necessitates modifications to its compensation plan and system of communication. Similarly, updating a code the right way means involving employees from all over the organization. If their participation has not previously been welcomed, additional work will need to be done before changes can occur.

Richard Coughlan serves as senior associate dean of the Robins School of Business at the University of Richmond. He can be reached at rcoughla@richmond.edu or (804) 289-8556.

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