Why strategic decisions can go wrong

Have you ever wondered why great ideas, plans and strategic decisions  go wrong? You’ve spent the time analyzing, assessing risks, finding your competitive niche and path to market so in your mind, all should be fine.  But as we know things don’t always go to plan.

Bringing 40 years of experience to coaching business owners and C Suite executives, one crucial step in achieving outcomes from strategic decisions that often gets overlooked is “ownership”.  Ownership of the goal often gets confused with “responsibility”. And “responsibility” sometimes gets associated and hence confused with “accountability”.   While all are vital for effective leadership and robust organizational health, they cater to different aspects of management.

Business owners regularly tell me is that one of their great frustrations is that their employees lack initiative even though they seem to accept responsibility. Business owners then ask why – “…I thought my manager was clear what needed to be done…my manager told me it was all under control…”

This blog analyzes the relationship between “ownership”, “responsibility” and “accountability” and provides some insights of why “ownership” could be the missing ingredient to building a great (rather than a good) business.

Implementing strategic decisions; Accountability vs. Ownership

The modern-day C-Suite is a buzzing hive of activity, with a unique blend of leadership styles and business philosophies. Let’s delve deep into these concepts and understand the distinction between them, especially in the context of C-Suite management and business owners.

1. Definitions:

• Accountability: This refers to the obligation of an individual or organization to account for its activities or goals, accept responsibility for them, and disclose the results in a transparent manner. It’s about answering for outcomes, both good and bad.
• Ownership: This is a proactive approach where individuals or teams take full control, responsibility, and initiative for a particular task or set of tasks. It means not just answering for outcomes but actively driving those outcomes.
• Responsibility: The duty or obligation to perform or complete a task. It does not necessarily carry with it the obligation to account for the outcome (accountability) or the intrinsic motivation to see a task to its best outcome (ownership).
• Because ownership involves responsibility, perhaps its logical to see why the two get confused.

2. Nature:

• Accountability: It’s reactive in nature. It often comes into play after actions have been taken or results have been produced. For instance, if a project fails, the accountable party must explain why.
• Ownership: It’s proactive in nature. It involves taking charge from the onset, foreseeing challenges, and finding solutions. An owner of a project will do everything they can to ensure it doesn’t fail in the first place.
• Responsibility: It’s neutral in nature. Merely denotes a duty or obligation to complete a task, without any intrinsic tie to the outcome’s quality.

3. Scope:

• Accountability: Often limited to specific tasks or outcomes. For example, a CFO might be accountable for producing a financial report but might not be directly involved in all the processes leading up to it.
• Ownership: Encompasses the entire process, from ideation to completion. Taking the earlier example, if the CFO takes ownership of the financial report, they might be actively involved in data collection, analysis, and even presentation.
• Responsibility: Can be narrow or broad, but it’s task-focused. A person might be responsible for leading a team, drafting a report, or implementing a strategy. But if an outcome (task or goal) is not owned, then this allows the person responsible to defer to others, which to a business owner or senior executive as blame, denial or excuses.

4. Transferability:

• Accountability: Can be delegated. Senior executives often assign accountability to middle managers or team leaders for specific tasks or results.
• Ownership: Personal and hard to delegate. It’s about an intrinsic commitment and passion towards a task. While certain tasks within the scope of ownership can be delegated, the overarching responsibility remains with the owner.
• Responsibility: Can be assigned or re-assigned based on roles and tasks.

5. Outcomes:

• Accountability: Ensures that there’s a system of checks and balances in place. It helps in maintaining clarity about who is answerable for what, leading to a structured and responsible organization.
• Ownership: Leads to passion-driven results. When leaders in the C-Suite take ownership, they drive initiatives with fervor, often leading to innovation, efficiency, and better outcomes. Problem solving and critical thinking are key attributes of ownership and as a business owner, employees with these skill sets become valuable assets of the organization.
• Responsibility: Ensures tasks are carried out. It’s the foundation upon which accountability and ownership are built.

Why Both Matter in the C-Suite:

1. 1. Culture Shaping: The organizations’ approach to these three concepts shapes the organizational culture. Promoting clear responsibility ensures tasks are done, emphasizing accountability ensures they’re done right, and fostering ownership ensures they’re done with passion and commitment.
   2. Role Modeling: Business owners and executives set the example. If they demonstrate a balance of responsibility, accountability, and ownership, middle management and other employees are more likely to adopt similar attitudes.
   3. Enhanced Decision-Making: By understanding and distinguishing these concepts, business leaders can make more informed decisions about task delegation, performance evaluations, and leadership development. Critical to successful decision making is the clarity of communication of the goal or strategy at hand.

   Conclusion:

   Responsibility, accountability, and ownership are three pillars of effective leadership in building a great business. While responsibility ensures tasks are undertaken, accountability and ownership ensure they are executed excellently. For organizations aiming for sustained success and a motivated workforce, a clear understanding and implementation of these intertwined concepts at the leadership level is indispensable.

   David Lockwood is an experienced business coach who brings practical business knowledge to your organization through educating and building confidence of the business owners and C Suite executives so you can build great businesses. David specializes in optimizing your Business Strategy aimed at helping businesses grow revenue, margins, cashflow and profits.