Innovative Solutions for Business Profitability

Accountability can save you a fortune January 28, 2009

In a recent analysis of a 1500 person company, I found that lack of accountability in project execution attributed to the following:

1) Millions of dollars wasted via failed projects.

2) Creating a culture where there were no consequences (corrective or otherwise) for failure. Employees leading failed projects actually received undeserved promotions and other accolades because senior management did not closely monitor project successes and failures. Employees assigned new projects were aware of this lack of follow-up and had no external forces motivating them to complete projects in a timely or successful manner

3) Best practices were not codified which resulted in departments repeating failed steps and not taking advantage of process improvement.

4) Several company departments became known company-wide as a roadblock for getting things done. Their failures have put the company at risk for continued business operations and have crippled crm and inventory systems.

5) This company is a private stock company so lack of accountability places the board of directors at risk for shareholder suits.

It should be noted that repeated issues of failed accountability is not unique to this company. Many companies face this internal cancer. However, by implementing a few positive steps, accountability and oversight can be brought back into the mainstream of company operations. Below are a few thoughts on implementing a system of accountability.

1) Whether it is internal development of software, the modification of off-the-shelf software or mods to existing software, basic purchasing methodology has to be brought into the decision-making process. Here are a few questions that should be asked:  a) What is the return on investment?; b) Is there an easier way to achieve the goal of the project that could employ low-tech, or no-tech solutions? c) Can a third party solution be used rather than hiring contractors or using internal employees? d) Does the project conform to corporate goals?  Of more importance is the involvement of purchasing to perform due diligence, competition and ultimately make the purchasing decision. Absolutely, the last thing you should ever allow is the ability of corporate department to make independent purchasing decisions. I could reel off numerous horror stories if you don’t believe me – the short story is that the key to any good purchasing decision is independent oversight. A corporate department such as IT is incapable of providing their own oversight – blame it on the fact that we are all subject ot human failings. For larger projects, not only should purchasing be brought in but I would involve the CFO and, more importantly, the board of directors. Accountability starts at the top and placing emphasis on doing a good job sets the tone for the successful company.

Steve