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Action Points
I. Developing Company Goals The management team has to develop the companys strategic goals. II. The Bottom Line The best practice for maintaining accountability among managers is tying management and executive compensation to meeting objectives. III. Must-Haves for Spreading Vision Spreading vision depends on clarity, energy, and empowerment. IV. The Golden Rules for Establishing Accountability Align goals throughout the business, focus those goals, and measure everything. V. Essential Take-Aways Vision is effective only when coupled with clear metrics and accountability. The CEO must have a genuine desire to link personal passion to the organization.
The management experts from the Service Source, Enlightened, and the Co-operators Group share their insights on:
CEO as Manager: Holding Your Management Team Accountable for Achieving Goals
Louis W. Meeks II Chief Executive Officer, The Service Source Antwanye Ford President, Enlightened Inc. Kathy Bardswick President and Chief Executive Officer The Co-operators Group Limited
Contents
About the Authors . . . . . . . . . . . . . . . . . . . . p.2 Louis W. Meeks II . . . . . . . . . . . . . . . . . . . . p.3 Antwanye Ford . . . . . . . . . . . . . . . . . . . . . . . p.6 Kathy Bardswick . . . . . . . . . . . . . . . . . . . . . p.9 Ideas to Build Upon & Action Points . . . p.11
ccountability and achievement are two sides of the same coin, and achieving business results depends on driving accountability and alignment with the CEOs vision. Vision does not trickle down on its own: It takes a concerted effort by the CEO to tie his or her vision to specific managers and specific metrics and drive it down the organization. This begins with a clear, concise statement of a few goals these must be tied to specific individual goals throughout the organization and measured regularly. Once the CEO gives an employee a line of sight to larger corporate goals, that employee will feel empowered to find new ways to contribute more and drive the long-term success of the organization.
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ouis Meeks is CEO of the Service Source. The Service Source is a business-to-business telemarketing sales organization located in Adrian, Michigan. The Service Source offers two services to customers. First, it is a reseller for Airborne Express (recently acquired by
DHL). In this business, it calls small businesses around the country that are shipping overnight packages. Its second business is Officeville.com, a stockless nationwide office supply dealer founded in 2001. The Service Source has been recognized in 2002 and 2003 as an Inc. 500 company.
Antwanye Ford
President, Enlightened Inc.
ntwanye Ford is the president and co-founder of Enlightened Inc., a full-service IT consulting firm that specializes in business process improvement, Web application development, and custom software solutions. In its first four years, during some of the most volatile economic times in the United States, Enlightened has increased its staff to 30 people with customers including the U.S. Agency for International Development, Housing and Urban Development, Fannie Mae, the U.S. Department of Labor, and the U.S. Army Southern Command. At Enlightened, Mr. Ford is responsible for corporate vision and direction, infrastructure (development methodologies, project management), business development, electronic content management
and processing, and business process improvement. Mr. Ford has worked in information systems for over 16 years, which helped shape his lifelong dream to be an entrepreneur. Mr. Ford received an M.S. in information systems with honors in 1992 and a B.S. in computer science and information systems from George Washington University in 1987. Mr. Ford started his career at a small defense contractor and later moved to MCI. In his fast-paced career at MCI, Mr. Ford was recognized four times as Employee of the Quarter and was awarded the annual Circle of Excellence Award. In 1994, Mr. Ford moved from MCI to Intelsat, the worlds largest provider of satellite communications. At Intelsat,
Mr. Ford served as a change agent for the company. He was specifically hired for his ability to do the hard stuff. After five years at Intelsat, Mr. Ford left to found Enlightened. Enlightened has been recognized by Black Enterprise in 2001 and by Entrepreneur Magazine in 2003 as one of the Best and Brightest young companies in America. It was also recognized by Inc. magazine in 2004 as one of the fastest-growing small businesses in America.
Kathy Bardswick
President and Chief Executive Officer, The Co-operators Group Limited
athy Bardswick began her career with the Co-operators Group in 1978. Prior to her appointment as president and CEO of the Co-operators Group on March 1, 2002, Ms. Bardswick served as COO of the Sovereign General and LUnion Canadienne. From 1998 to 2002, she was in charge of operations for these companies and their subsidiaries under the umbrella of the Co-operators Group Limited. A graduate of McMaster Universitys M.B.A. program, Ms. Bardswick also holds a bachelors of science degree in
mathematics from the University of Manitoba. An industry leader, Ms. Bardswick is a board member of the Institute of Catastrophic Loss Reduction. Equally active in the cooperative sector, Ms. Bardswick serves as chair of the International Cooperative and Mutual Insurance Federation and as a member of the Credit Union Central of Canadas CEO committee. Ms. Bardswicks corporate board positions include seats with the Sovereign General, LUnion Canadienne,
Co-operators Investment Counselling Ltd., Echelon, HB COSECO, and Cooperators Development Corporation. She is a member of the executive committee of the Conference Board of Canada. Ms. Bardswick is also a member of the University of Guelphs board of governors and is chair of the universitys finance committee.
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Louis W. Meeks II
Chief Executive Officer, The Service Source
of those top five objectives, each one has a manager accountable for attaining it. We take a top-down approach, wherein those managers are then accountable for relaying that information to the people below them, the middle managers, to the assistant managers, and ultimately to the sales staff who execute the plan.
I consider accountability and achievement to be one and the same; either the goals were reached or they werent.
Louis W. Meeks II Chief Executive Officer The Service Source
Louis W. Meeks II
Chief Executive Officer The Service Source
We stay very involved in the progress of our low-level managers, because we never want to be surprised. Leads the business-to-business telemarketing sales organization Company was recognized in 2002 and 2003 as an Inc. 500 company Company offers two services, one as a reseller for Airborne Express and the other via the office supply dealer Officeville.com Mr. Meeks can be emailed at louis.meeks@execblueprints.com
We will only create goals for our managers if the managers can drive the outcome and results; if not, that reflects poorly on the CEO who allowed that goal to be attributed to somebody who had no control over the outcome. Goals that management should not be accountable for are primarily defined by situations outside of their control, such as the outcome of a lawsuit. Otherwise, our corporate culture is summed up as, If everyone is accountable, then no one is. What that means in our organization is that there is only one person who has ownership of every goal, because we have discovered that if more than one person is accountable, that can lead to finger-pointing and shifting of responsibility. For communicating goals and detailing ownership of the outcomes, we have an annual meeting planning session wherein one of our objectives is to define the five most important things the corporation has to get done for the year. Then,
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company has to meet, and then the five quarterly goals, which somehow relate to attaining the annual goals. On a monthly basis, the senior leadership team has an all-day meeting and then we report in. The person who has the accountability reports in with respect to the quarterly goals they are responsible for, discusses the progress toward reaching those goals, and identifies any challenges and, if necessary, what we can do as a team to ensure that we get back on track toward attaining those goals. There are monthly check-ins to ensure that our quarterly goals are met. Then, at our quarterly off-site meeting with the senior leadership team, we
Louis W. Meeks II ExecBlueprints 3
Louis W. Meeks II
Chief Executive Officer, The Service Source
(continued)
up and tell the rest of the senior leadership team whether they hit their goal, and if not, why, and what they are going to do to change that. Its a kind of peer pressure. With a good management team and a good leadership team that is well aligned, there are no surprises at the meetings because we are working together as a team to ensure that we are not embarrassed at a quarterly meeting or an annual planning session. If we have managers who simply miss their quarterly objective on a regular basis without justifiable reasons, then ultimately we have identified personnel who should not be in those positions. We have loose three- to five-year directional goals, but those are very general, such as where we want to take the corporation. In practice, we find that having a three-year goal is just a little too far out with respect to the marketplace. To have a three-year goal and hand it to a manager to achieve just doesnt work. We limit our objectives to one-year goals; with the accountabilities for managers, we have chosen not to have anything longer than a one-year objective to execute on. Given the proper resource allocation to the manager to achieve their objectives, over time they should be operating at no less than an 80 percent achievement record, but the CEO needs to look at it on a case-by-case basis. If there are external factors that came through the marketplace that strongly contributed to a managers not hitting their goals, then clearly I am not going to hold him or her accountable. If, on the other hand, at the end of the year their goal was not met and they had all of the
Louis W. Meeks II ExecBlueprints 4
will also evaluate how we are doing with respect to hitting our annual targets. The best practices for ensuring success are included in the entire process discussed above. Our organization is able to move quickly to identify a struggling manager because we have these regular checkin times where they have to report on their specific goals. Therefore, we will know very quickly if a person is in over his or her head, if the goal is too big to be attained, or if he or she is simply not capable of doing the job. The best practices are simply to go through this process and ensure that there is buy-in from the managers, and that they have all the resources necessary to attain those goals. My job as the CEO is to ensure that a goal is realistic and attainable and that the manager has the resources to get it done. I am a strong believer that this is a universal application in the sense that we have a small company, only 60 employees, but even complex businesses have to be reduced
down to the small number of the most important things the company has to get done. You cant present a manager with a list of 25 goals to execute, major projects that move the corporation forward, because that is unrealistic. You need to simplify in order to have goals that are realistic. According to Jack Welsh, he would have his direct managers write down on a three-by-five card the top five things that have to be done this quarter and report in on how they did on the previous top five. I believe in simplicity in management.
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Louis W. Meeks II
Chief Executive Officer, The Service Source
(continued)
Expert Advice
From our perspective, the ROI is defined at one stage above the leadership team gathering at the annual planning meeting where the shareholders create our revenue goals and our net income goals for the year. My job as CEO is to take that knowledge of our shareholders net income and revenue goals and translate it into the top five things we have to do in order to achieve the shareholders objectives in terms of revenue and net income. If we hit our annual top five objectives and we hit our quarterly objectives, I know we will deliver on our revenue and income goals, which is the only ROI metric that matters delivering performance to the shareholders. A CEO, in my view, has two major responsibilities: to provide financial growth to the shareholders and to grow other leaders.
resources they needed, they had all the team members willing to help out, there were no external factors that changed from the time that meeting was set or the goal was set, then that raises some questions. Did the CEO not do a good job of developing this person? Is this a failure to properly manage the person? Or does that manager simply not have the horsepower whether it is mental, intellectual, or emotional for the task at hand? Given that external factors were not a major issue, the manager should be hitting the goal 85 percent of the time. When we have our planning sessions, we will ask whether a goal is 100 percent achieved, 75 percent achieved, 50 percent achieved, or 25 percent achieved. Our executives are involved in the development of the annual goals as well as the quarterly goals. We are also in the monthly meetings where the lower-level managers report on their progress toward their specific goals. Its not our style to just hand out quarterly goals at the beginning of the quarter and then close our eyes for three months and hope for the best at the next meeting; instead, we stay very involved in the progress of everyone in the company. I consider accountability and achievement to be one and the same; either the goals were reached or they werent. With some applications and some specific goals, its possible to achieve partial success,
it is very difficult to achieve success. Having a clear understanding at every level of the organization is vital. The idea of having lower-level employee input on defining management goals sounds very valid on the surface; however, we set our goals from the top down, not the bottom up. Everything starts with what the shareholders objectives for the corporation are for the year, and then the senior leadership team evolves the top five things we need to get done on a quarterly basis to drive that annual target for the corporation, and then we push it down through the organization. We certainly utilize our lower-level employees and strongly push them to have good suggestions on how to change a sales script or serve our customers, for example. We pay very close attention to those ideas, but in terms of creating goals for the corporation, it doesnt seem that it is their role.
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Louis W. Meeks II
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Antwanye Ford
President, Enlightened Inc.
Antwanye Ford
President Enlightened Inc.
Executive management needs to create the vision for the company, but there are key individuals within the organization who should be part of the process.
Antwanye Ford President Enlightened Inc.
Lower-level employees have the most accurate insight into customer wants and needs. Has worked in information systems for over 16 years Former Employee of the Quarter and Circle of Excellence Award recipient while working for MCI M.S. in information systems and B.S. in computer science and information systems, George Washington University In 2004, company was number 264 on the Inc. 500 list of the fastestgrowing small businesses Mr. Ford can be emailed at antwanye.ford@execblueprints.com
Executive management needs to create the vision for the company, but there are key individuals within the organization who should be part of the process. Creating the corporate vision cannot be everyones responsibility. However, it is everyones responsibility to follow that vision. Individual staff development is the responsibility of line management. As an executive, I may not know employees exact goals and needs. It is my responsibility to make sure the strategic plan maps to the corporate objectives, which map to the departmental objectives, which should map to the individual employee objectives. If an employee can see themselves in the corporate vision, there is buy-in for the corporate plan.
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the critical areas of the company that tie to our strategic goals. It is the job of the manager to communicate the corporate objectives to their staff and ensure that their staff understands the criticality of those objectives. Management takes a corporatewide review of the strategic plan. Everyone hears the plan from my partner and myself. They understand that what their managers tell them is coming from the executive team. We try to review strategic plans quarterly among the management team.
look at where we are versus where we should be. Each individuals objectives are also reviewed quarterly so they know where they are versus where they need to be. There are no surprises. Goals and objectives change due to environmental factors. When the United States went to war, we had certain objectives to meet from a corporate perspective. Being a government contractor, we were affected when the budgets for nondefense agencies changed. All of a sudden, an agency we were working
Antwanye Ford ExecBlueprints 6
Antwanye Ford
President, Enlightened Inc.
(continued)
Mapping Objectives
with had its budget cut because of the war. If we had an objective to get a certain amount of business from that agency, our success would have been impacted by no fault of the company or the individual. If we did a straight analysis against an employees objectives with no review period, we would have no corrective action. We have a review process, and we update the spreadsheet that tracks our objectives and gives us an opportunity to correct issues. We have to recognize budget cuts. If we dont change our goals to adjust to environmental factors, we will get burned. Strategic goals should anticipate environmental factors, but they cant always envision every event. For example, we could not have predicted the events of September 11th. However, after those events, the entire U.S. industry changed and we needed to change our strategy to adapt.
Corporate Objectives
Departmental Objectives
Maintaining Accountability
The best practice for maintaining accountability among managers is tying management and executive compensation to meeting objectives. If employees accept their objectives, their compensation package should be tied to achieving them. People typically do whats in their own best interest, so that interest should be pushed down to the staff level. At Enlightened, there are no surprises when its time for a review. We make sure people are aware of where we want them to go. A while ago, we got feedback that employees didnt have the big picture in mind, so we started to communicate and share strategic, marketing, and
financial planning with them more frequently. We believe in employees being proactive in managing their own careers and objectives. As the executives of the company, we need to make sure we manage going down. If theres a corporate change and were behind on a particular goal, we need to put the resources in place to help meet the goal. Its difficult to manage goals and objectives only on a yearly basis, because so many things change in our society. We recently updated our strategic plan. The challenge occurred when we needed to account for a presidential election, a war, and an uncertain economy. We needed to take all of these
Rate of Achievement
Among managers, 90 percent is an acceptable rate of achievement for the goals put forth. If circumstances change, we have to change managers objectives for the year, because they cant meet an objective that is impossible due to external factors.
Lower-Level Employees
Lower-level employees have a key role in understanding the client. Typically, they are the people on site who are supporting the customer and the infrastructure.
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Antwanye Ford
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Antwanye Ford
President, Enlightened Inc.
(continued)
Expert Advice
The events of September 11th affected us drastically. We were focusing on telecommunications, and the entire industry changed. If an employees objectives were to develop a product to take advantage of the telecommunications industry, it wouldnt have been fair to hold that person to his or her original goals. We recently completed building an interface that allows all D.C. criminal justice agencies to talk to each other. If a terrorist gets arrested and the federal government ties into the system we just built, they will get an alert. If we manage our objectives well, we should be able to hit 9 out of 10 goals, even if theyre stretch goals.
If you can have an open dialogue with lower-level employees and give them an opportunity to make an impact on the company, you will get buy-in. It is incumbent upon the leadership or the CEO to seek out lower-level individuals. Everyone in the business is a sales representative and a marketing person; every time they interact with a customer, there is an opportunity to make an impact.
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Antwanye Ford
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Kathy Bardswick
President and Chief Executive Officer, The Co-operators Group Limited
My approach to goal setting is to align goals throughout every level of the organization.
Kathy Bardswick President and Chief Executive Officer The Co-operators Group Limited
Processes of Communication
We also spend a lot of time and energy communicating. It starts with individual communication within teams, but we also have intranet communications where, among other things, we relay corporate goals. It is important that the lines of communication be informal and without hierarchy. I spend a lot of my time speaking with staff groups and soliciting feedback. Given the right environment and support, people want to be their best and will be their best. I need to step aside and let them go, but be there when they need guidance or when things are clearly not working. My regular positive feedback reinforces appropriate focus, behavior, and contribution. I set a framework in conjunction with my team,
Kathy Bardswick
President and Chief Executive Officer The Co-operators Group Limited
Communication is the key vehicle to getting everyone in the organization to buy into our mission, vision, values, and strategic direction. Joined the company in 1978 Board member of the Institute of Catastrophic Loss Reduction and chair of the International Cooperative and Mutual Insurance Federation B.S. in mathematics, University of Manitoba M.B.A., McMaster University Ms. Bardswick can be emailed at kathy.bardswick@execblueprints.com
Expert Advice
The piece of advice I find myself giving others most often is to listen to your heart as much or more than your head. Follow your instincts as much as you follow reason and logic. Do not chase positions, titles, or power, because those things are ultimately not important. If a person is not listening to what his or her heart is saying, he or she is not going to find balance, quality, and passion. I think is so important for people to be able to look back on their lives and say, I wouldnt change a thing.
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Kathy Bardswick
President and Chief Executive Officer, The Co-operators Group Limited
(continued)
Goals should be few and focused; they should be attainable and measurable. Of course, these will not always be financial. Some critical goals relate to matters such as staff, ownership, and customer engagement levels, which are more difficult to measure but no less important. Measurability should not get in the way of setting the right goals. Accountability relies on measurement. I have a performance agreement with each of my team members, and all staff members have a written agreement with tangible goals. A large portion of our management meetings focuses on strategic thinking and assessing how well we are achieving key measures of success. Honesty in assessing and reassessing whether the organization is doing the right things is essential. Our organization has six key areas of strategic focus, which serve as the framework for all staff performance agreements, which document their individual contributions and goals. Some parts of the organization do a better job of doing this than others, and I spend a lot of time out in the organization speaking to staff to find out how well their goals are set and how well they understand the links between their contribution and the corporations success.
Focus
Attainability
Measurability
Strategic Ties
Heeding Advice
At the executive level, it is critical to be honest and ethical, as well as passionate and courageous. Equally important is the ability to have fun and laugh at oneself while learning from mistakes. A healthy dose of humility will serve an executive well. And ultimately, there has to be a genuine desire to link personal passion to the organization. A mentor of mine once told me I should be comforting the afflicted and afflicting the comfortable. That
advice has really stuck with me over the years. First, I should pay attention and be very much in tune with my team and the people I work with. Second, I need to make sure I am expecting a lot and encouraging people to continually stretch to be their very best. And I need to allow them to make mistakes, and reassure them that as long as were working toward the same goals, I am here to support them.
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Kathy Bardswick
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Measure everything. Accountability relies on measurement. Measure regularly, and communicate the results of this measurement to employees.
V. Essential Take-Aways
Vision is effective only when coupled with clear metrics and accountability. Visions must be moved through the organization by the CEO. The CEO must have a genuine desire to link personal passion to the organization. Aligning the energy and passion of everyone in the organization is the main task of the CEO.
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(continued)
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10 KEY QUESTIONS AND D ISCUSSION POINTS
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What sort of goals should be the responsibility of a management team? Are such goals the exclusive responsibility of managers? Why? What sort of strategic goals are not suitable for management accountability? How would you go about communicating goals and responsibilities to managers? Would the goals be expressly set out? Through what mechanism? What apparatus exists within your organization to ensure the achievement of goals in general? What role do managers play in that process? How involved are managers in the formulation and implementation of goals? What best practices are you aware of for maintaining accountability for achievement among managers? How would you determine the ROI of efforts to ensure accountability among the management team regarding achievement of goals? After communicating goals to the management team, how accountable would they be a year later? Is this a reasonable amount of time to see achievement? How much achievement could be expected after 12 months? One year into accountability efforts regarding the achievement of managers, where would the process be in terms of smooth operation? How should the effort be reviewed after a year? What would constitute success at this point? What is an acceptable rate of achievement of goals among the management team? How responsible is the management team as a whole? What percentage of managers must achieve in order to deem a program of accountability a success from the executive standpoint? Does the percentage depend on the company? On the industry? What benchmarks might be utilized in order to measure the success of managers in achieving their appointed goals?
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