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Third Generation Leadership and Accountability

Guest post by: Douglas Long

Article Overview: The bottom line in any organisation is performance. And performance demands accountability. The issue as we move from First Generation Leadership or Second Generation Leadership approaches to a Third Generation Leadership approach is not one of being accountable versus being unaccountable. This article looks at how it is possible to maintain personal accountability in a Third Generation Leadership organisation

Third Generation Leadership and Accountability

"But, in a Third Generation Leadership world, who's in charge?" That was the question raised by one of the people in a Third Generation Leadership workshop I conducted. "After all, the role of a CEO is to run an efficient organisation that provides optimal returns to shareholders. If we are to move away from hierarchy and power,how can a CEO (or any executive or manager) actually do what they are supposed to do? How do we hold people accountable?

It's a very good question and one that needs to be answered.

The bottom line in any organisation is performance. And performance demands accountability. The issue as we move from First Generation Leadership or Second Generation Leadership approaches to a Third Generation Leadership approach is not one of being accountable versus being unaccountable.

In the First Generation Leadership and Second Generation Leadership worlds accountability is very clear. Instructions and goals come down the hierarchy and accountability goes back up the hierarchy. This is true whether we are talking about a commercial organisation or any other form of organisation - although in some organisations the hierarchy is not as clear cut as in the commercial world. In a Third Generation Leadership world the issue relates to differences in how this accountability occurs when the traditional power and authority inherent in a hierarchical organisation no longer exists.

Many years ago Peters and Waterman[1] spoke of "simultaneous loose-tight properties" as a mark of excellent companies. They described these properties as "... fostering a climate where there is dedication to the central values of the company combined with tolerance for all employees who accept those values. ..."

While there has been considerable discussion (most emphatically, not all of it positive!) about "Built to Last", and it is certainly indisputable that, subsequent to the book's publication, many of the companies extolled as 'excellent' could no longer be so described, this principle of simultaneous loose-tight properties is central to Third Generation Leadership accountability - although the way in which the properties are utilised may be quite different from that propounded by Peters and Waterman.

One of the reasons a person joins any organisation is because he or she believes that there is compatibility between his or her personal values and the values espoused by the organisation. For example, consider two people with the same qualifications and level of experience. If the personal value set of one person is linked to wealth and power being key ingredients of success, he or she will join an organisation in which the attaining of wealth and power has a reasonable chance of being a reality. If, however, the personal value set of the other person is more orientated to helping those in need, then that person may be perfectly happy to receive lower remuneration for the same sort of duties while working for a charity or other not-for-profit organisation. It may well be that neither person has consciously thought about this compatibility of value sets, but such compatibility will certainly impact significantly on whether or not the person is happy in and remains with the organisation he or she chooses to join. Of course, neither value set is right or wrong - they are simply different - but an individual's value set certainly impacts on that person's expectations and on their performance.

This is why, in Peters and Waterman's work, they emphasised the need for an organisation to have clearly espoused and practiced values. Peters and Waterman argue that where there is compatibility of values between organisation and employees then the performance of employees has a high probability of being consistent with what the organisation wants and needs. When this is the case, reasonable degrees of flexibility can be allowed in how these people are managed.

But a commonly held view is that values are unchangeable. Read many of the available works and it would appear that some particular value set is both universal and immutable. This is understandable for accountability in a First Generation Leadership or Second Generation Leadership world, but it is not the case in a Third Generation Leadership world. In a Third Generation Leadership world, values change.

There appears to be some consensus that values are emotionally loaded attitudes or beliefs. Accordingly, if I hold a world view in which "family" or "tribe" is what matters most to me, then all of my actions will be centred on doing what is best for, or what best furthers the interests of, the group that I consider to be my family or tribe. Similarly if my world view centres on hierarchy, control, and "one best way" or on optimising returns or profits then I will be perfectly happy as part of an organisation that has these values at its core. This is why, in Peters and Waterman's work, they could argue for simultaneous loose-tight properties being the summary of the set of principles they espoused for excellent companies in a Second Generation Leadership world.

It is our world views, of course, on which our current approaches to accountability are based. And it is because our thinking is currently locked into an inadequate approach that it is so difficult for us to understand that there may be a different, perhaps even a better, way of ensuring accountability.

The difficulty relating to accountability arises when value sets change - and value sets certainly do change as one's world view expands.

If a leader's world view moves to a Third Generation Leadership (blue zone of their brain's locus of control) approach, how can a CEO (or indeed any executive or manager) actually do what they are supposed to do? How can he or she hold people accountable for how and what they do towards the achievement of results when we move away from traditional hierarchical approaches to power and authority?

Quite often in my consulting work, I get asked about structural issues. My response from an organisational consulting perspective is identical to the one I use when mentoring individual executives: "your structure should reflect value added at each level. Tell me, please, what do you do that adds value to the work of those people who report to you?"

I have found that this question quickly sorts out those who actually provide no "value added". It is not uncommon to find that a "leader" is primarily doing some form of checking the work of their followers in order to provide "accountability".

Central to the concept of accountability in a Third Generation Leadership world is that decision making should be made at the lowest possible level. In other words, those closest to any issue should have the authority to make decisions relating to the issue.

Some years ago I encountered this situation in an organisation where employees at all levels had the authority to adjust their work situations in order to deal with personal and other pressing issues. Even on the factory floor they could organise replacements from among their work mates in order to ensure that output wasn't impeded because of a person needing to attend to some urgent personal matter. In this organisation of some 2,500 people and operating over 5 sites, every person considered himself or herself totally accountable for their own actions. Each person, no matter where they were in the organisational structure, also took shared accountability for the quality and quantity of output. The result was high volumes of product, extremely high quality of product, very low levels of industrial accidents (a great OH&S record), and very good returns for shareholders.

Effectively this organisation showed trust in its employees and had decentralised much of its decision making. In this organisation all management levels added value through providing additional information that decision makers needed in order to ensure that the company was not adversely affected by any employee decisions. Although management could veto employee decisions, such action was extremely rare. The level of trust that had been engendered meant that employees willingly discussed situations with their leaders and accepted advice, but, in these personal problem situations, almost without exception it was the employees themselves who actually made the decisions. The profitability of this company only deteriorated (and it did that very rapidly) when a change in Chairman brought about rigid controls and effectively centralised decision making - it reverted to a traditional approach with largely centralised control.

Because Third Generation Leadership is based on a "let us" or "how can we?" premise, as much information as possible is shared. Part of this sharing of information includes ensuring everyone knows the areas in which they can make decisions. They are then encouraged to make decisions in these areas and they know the parameters within which they can make decisions. Because Third Generation Leadership is centred on the brain's blue zone locus of control, such decision making at low levels of an organisation is not viewed as a threat - rather it is seen as a means of helping facilitate growth in everyone. In this environment, when mistakes are made (and they are) such mistakes are seen as opportunities for learning rather than being something that warrants punishment or sanction of some kind. In this world, the only real mistake is failing to acknowledge that a decision was wrong or less than optimal and that help or remedial action is required.

Only a leadership world view utilised by a leader with his or her brain's locus of control firmly in the blue zone is able to provide this environment and to create these conditions.

The reality is that most people in virtually every organisation (including a family unit) want to do a good job. People want to provide the best performance possible. The problem is that it is the organisation itself that usually prevents them from demonstrating the competence and confidence, the ability and the willingness or readiness, which they have to perform.

I was consulting to a major bank during and just after the major recession of the early 1990's. The project on which I was working had taken some months and, over this time, I had learned that the CEO's motto could well be summarised in the old quote 'be reasonable, do it my way'. This bank had survived the worst of the recession in far better shape than had its competitors and, once economic growth resumed, I asked the Chief Executive what he would now do differently in order to have the bank move forward. "Add another layer of supervision," he told me. "We have come through this remarkably well. We need to make sure that we have all the controls, the checks and the balances, to make sure that we continue on the same path." I suggested that there may be a different approach possible and quickly found that I was no longer consulting to that bank!

Within a few years this bank was no longer leader of the pack and it wasn't simply financial deregulation that was to blame. Why should a person take personal responsibility for any decisions when he or she knows that someone else is going to go over exactly the same information to then give a "pass" or a "fail" mark depending on what this supervisory checking level deems should have been done? When an employee's main concern is to second guess "the boss" decisions take longer and client service is likely to suffer. When a bank client cannot get timely decisions relating to financial issues from their existing bank the client will quickly look elsewhere. There are sound commercial reasons for encouraging decision making at the lowest possible level of an organisation.

Knowing these sound commercial reasons, most leaders operating from a First Generation Leadership and Second Generation Leadership world view are somewhat ambivalent about this concept of decision making being made at the lowest possible level. On the one hand they know that it encourages individual responsibility and enables better quality customer service. But on the other hand it is seen as a threat to the control structure and they know it is capable of abuse. This is a matter of especial concern in public sector organisations where the use of tax payer funds is involved or in not-for-profit organisations where community funds are involved. Invariably, particularly if they have had a bad experience because of some abuse of trust, there is therefore a tendency to err on the side of control rather than empowerment no matter what the rhetoric may be. The result is that many organisations fluctuate between centralised and decentralised approaches depending on which is "flavour of the day" as propounded by some consultancy.

Leaders operating from a Third Generation Leadership approach don't have this ambivalence. They know that there are some things that can be done in order to foster full accountability in an organisation where traditional hierarchical power and authority are not paramount. They know that they can provide appropriate accountability approaches for everyone. Amongst the possible actions to ensure accountability used in Third Generation Leadership are:

• Make it very clear that individual accountability is to be the norm and that this accountability is to oneself, one's peers, one's leaders, and one's organisation in order to ensure desired results are attained.
• Have a very clear set of values that illustrate the importance of seeing and understanding the interacting variables that form any and all organisations.
• Ensure there is no disconnect between espoused values and practiced values - widespread cognitive dissonance will quickly destroy the veneer that seeks to cover any disconnect.
• Use this value set to provide guidelines for every one on how to deal with the ambiguity and complexity with which every organisation and every individual is facing on an increasingly frequent basis.
• Structure the organisation so that leaders at every level obviously and willingly provide a significant "value added" component to that which is done by their followers.
• Remove grossly excessive status symbols that are dependent upon one's position in the hierarchy and which makes it clear who are "us" as opposed to those who are "them".
• Develop a "no blame" culture in which mistakes are used to facilitate learning and growth instead of being a reason for punishment - if people believe they will suffer penalties for making wrong decisions then they will avoid making decisions.
• Develop a cognitive coaching culture in which everyone is encouraged to shift and to maintain their brain's locus of control in the blue zone.
• Be very clear about organisational goals and the role each person has in achieving these goals.
• Demonstrate trust by ensuring every person in the organisation knows what the organisation is seeking to achieve and, in broad terms, how the organisation intends to achieve these. Be honest and to everyone "tell the truth, the whole truth, and nothing but the truth".
• Ensure everyone clearly understands what are "givens" (i.e. those things that are not open to debate or question) and those things about which there is flexibility.
• For those things for which there can be flexibility, provide very clear parameters within which each person is authorised to make decisions and empower and encourage them to make these decisions.
• Encourage open discussion, questioning, and contributions relating to what the organisation is doing and how things could be done better. As most consultants know the people closest to any issue or problems invariably know how the issue could be fixed - their frustration is that, other than the consultant, most people won't listen to them or take their suggestions seriously.
• Encourage people to develop interdepartmental networks and to interact informally to resolve issues and to explore possible solutions to the problems and issues being faced.

Of course, not everyone will be comfortable with this sort of accountability. Some people are scared of ambiguity and complexity. I have commented already on the fact that ambiguity and complexity bring about different responses. For some people ambiguity and complexity means an opportunity to grow and develop. For others, this same ambiguity and complexity creates fear and brings about a retreat to a position where clear answers are required - even if such answers either fail to really deal with the situation or deal with it in the short term while creating further problems for the future.

Only a Third Generation Leadership approach - a 3G Leader - has the mindset to be able to effectively lead both those who are able to live with Third Generation Leadership accountability and with those who find themselves unable or unwilling to move beyond First Generation Leadership and/or Second Generation Leadership accountability.

The Third Generation Leader is able to adapt his or her leadership approach so that it meets the needs of the followers. By doing this the Third Generation Leader can provide an environment in which the follower has the opportunity to change if they want to while simultaneously allowing the follower to remain with their existing world view if that is what they prefer. In either case accountability exists.

When people operate in a structure that enables them to be successful (however they may define success) and when a person is comfortable with their form of responsibility and accountability, we have the scene set for self confident people to prevail.

---

[1] 1984, Tom Peters & Robert H Waterman jr, Built to Last: lessons from America's best-run companies Warner Books

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Article Tags: accountability, engagement, leadership approaches, personal accountability, third generation leadership



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