By Virtue of Contract

“You have been quite clear, that it is the manager accountable for the output of the team, so, does the team member have no culpability for the work?” I asked.

“Of course they do,” Pablo countered. “By virtue of a contract, a very simple employment contract, each team member is expected to show up for work each and every day, bringing the full application of their capability, in short, to do their best.”

“Sounds simplistic, if not idealistic,” I snorted.

“Indeed simple, AND not idealistic,” Pablo replied. “It is not a matter of idealism, it is a matter of contract. And, as a matter of contract, the manager must assume each team member is doing their best.”

“But, assuming the team member is doing their best does NOT make it so.” I pushed back.

“Why, do you think it is hard?” Pablo asked, not giving me time to respond. “It is not difficult for team members to continually do their best. It is only when our people systems are dysfunctional, people find it difficult. Unless we, as managers, prevent it, people will engage, with full commitment to do their best, in fact, will find deep life satisfaction in doing so.”

A Slow Nuanced Dance

“Fixing accountability is the first step to creating a context of trust,” Pablo shifted. “When accountability is not clearly defined, or placed at the wrong level, mistrust begins a slow nuanced dance, often imperceptible. But it’s there. People begin to feel insecure about their own jobs, not sure where this career may or may not be taking them, squabbles emerge about equitable pay, stress among working relationships and blaming behavior.”

“Sounds like a bit of insecurity?” I ask. “Isn’t that why we do psychometric testing, to weed those people out?”

“People behave as people behave, in the context of their surroundings,” Pablo chuckled. “We think the success of a managerial system depends of the psychology of its individuals, when its success depends more on its design. Change the context, behavior follows. Go into a church or synagogue and you will see people sitting quietly, barely speaking. Does that mean they are all introverts and poor communicators? Go to a soccer stadium where a goal has just been scored and you will see people screaming, jumping up and down. Does that mean they are all extroverts with a boisterous personality. It’s all about context.”

Pablo stopped before he finished. “Fixing accountability is the first step to creating a context of trust.”

A Well Argued Decision

“Let’s take meetings,” Pablo suggested. “Lots of managers AND their teams work hard to gain concensus, avoid conflict, at times even attempt to make decisions democratically.”

“I have seen that,” I said.

“And that manager of the team, also has a manager, let’s call that role, the manager-once-removed, the manager’s manager,” Pablo described the setup. “If the team and their manager engage in democratic decision making and make a bone-headed decision, who does the manager-once-removed hold accountable?”

Manager-Once-Removed (MOR)

“Well, I assume it would be the whole team, manager included,” I observed.

“Who is the manager-once-removed going to call into the office to discuss this bone-headed decision, the whole team? If we are going to call in the whole team, what do we need the manager for?”

“I’m listening,” I said.

“And, what of the dynamics in the decision meeting? If the decision is to be democratic, then team members will lobby their own agendas, sometimes hidden politics emerge to gain support from other members, perhaps a little arm-twisting. The manager almost becomes a bystander. And, yet, at the end of the day, it is the manager called to account for the bone-headed decision.”

“And?” I asked.

“It is only when the manager becomes accountable for the decision, that we can make headway,” Pablo described. “Team members now show up to provide feedback and support to the manager, who will make and be accountable for the decision. The team will play devil’s advocate, argue this position or that position, in short, create conflict. The point of the meeting is not to manage conflict, but create it, for the benefit of the decision. Don’t manage conflict, manage agreement.”

“And, the benefit?”

“A well argued decision,” Pablo said. “This only happens when we understand the working relationship between the team and the manager, with the manager accountable for the output of the team.”

Accountability for Wrong Decisions

“You have talked about managerial systems and organizational structure,” I started. “Those are well-worn labels, but the devil is always in the details.”

Pablo nodded. “Yes, the detail of structure is simply the way we define the working relationships between people. The success of any organizational structure rests on its effectiveness to define two things – in this working relationship, what is the accountability and what is the authority?”

“But, isn’t it second-nature, that especially in a hierarchy, the manager has the authority and the team member is accountable to carry out the decisions of the manager?”

“Not so fast,” Pablo said slowly. “Each has the authority to make decisions within an appropriate span of discretion. And it is the manager accountable for the output of the team member.”

“But, if the team member, within an appropriate span of discretion, makes the wrong decision, how can you hold the manager accountable?” I asked.

“Because the manager selected the team member, trained the team member, assessed the team member and then delegated the decision to the team member. If the team member makes the wrong decision, that outcome is the accountability of the manager.” Pablo stopped to let that sink in.

“When we are clear about accountability, behavior follows,” Pablo continued. “When we accurately define the accountability, people know what to expect and they behave accordingly. If the team member is held to account for a wrong decision or underperformance, there begins a mistrust about whether the manager was clear in their instruction, whether the training was adequate, the right tools available, the circumstance not anticipated. If the manager is held to account for the team member’s wrong decision or underperformance, there begins a supportive relationship to ensure the training was adequate, the working conditions conducive, the selected project appropriate, within the team member’s capability.

“You see,” Pablo said, “the manager cannot allow the team member to fail. In a punitive context, that is why the manager often snatches back the authority for the decision and simply assigns the task. In a trusting context, the manager has to make sure all the variables around the team member are adequate and conducive to success. And, that includes the manager’s selection of that team member in the first place. The success of the organization starts with being clear about managerial accountability.”

To Stay Green

“You continue to use the term managerial system,” I started. “What do you mean?”

“In the beginning, in a startup, every company is haphazard, organizing the work around the people they have. At some point, there is still work left over and the founder realizes work can no longer be organized around the people, we have to organize the people around the work. Specialized roles emerge. And, then those roles have to work together.”

“And the system?” I asked.

“Roles cannot be haphazard, working together cannot be haphazard, too much friction against profitability. I have seen companies work extremely hard and never make a profit. Eventually, they have to make a profit or the company dies (a long slow death exasperating death). For a company to survive and be profitable, they have to create a managerial system, what we call structure.”

“Structure?” I prompted.

“Organizational structure is simply the way we think about, often on paper, the accountability and the authority in the working relationships between people,” Pablo stopped. “Two types. Vertical managerial relationships and horizontal cross-functional relationships.”

“And this structure is important for profitability?” I clarified.

“Yes, and, this structure is important for the sustained creative output of the people who work in the company. Because without that, the company will also die, become a corrosive institution where no one wants to work.” Pablo paused again. “To stay green and growing, the managerial system has to be vibrant and well-thought-out.”

The Delegation Paradox

“But, it seems to me, that accountability is already fixed,” I replied. “The manager makes the decisions and the team member carries it out. Isn’t that the pervasive understanding for everyone?”

“You might think that, but you would be mistaken,” Pablo ventured. “For a company to grow, it cannot be so. If the manager makes all the decisions, eventually, what happens to the speed of decision making?”

“Well, it begins to slow down,” I observed.

“Or stops, when the manager becomes overwhelmed with all the decisions. As the organization grows, there are too many decisions to be made by one person.”

“And?” I prompted.

“For the organization to grow, the manager has to delegate,” Pablo flatly stated.

“But, every manager already knows they have to delegate, happens all the time,” I said.

“No, every manager knows they have to delegate, and they think, what they have to delegate are task assignments. In the delegation of a task, the manager also has to delegate appropriate decision making along with the task.”

“But, shouldn’t the manager reserve the authority for the decisions to be made?” I wanted to know.

“Only, if the manager wants to slow things down, or bring things to a crashing halt,” Pablo chuckled. “Appropriate decision making has to be delegated along with the task assignment. Most managers, at the end of a delegation meeting, ask ‘Do you understand what to do?’ A more relevant question would be ‘As you work through this task, what decisions do you have to make?’ Every level of work has appropriate decision making.”

“Well, that should get some things off the manager’s plate,” I said.

“Not exactly,” Pablo had a hint of a smirk on his face. “You see, the manager is still accountable for the output of the team member. If the team member underperforms or fails, it is the manager who is accountable. And that changes everything.”

Fix Accountability

“All well and good,” I said. “If we want to build managerial systems based on something other than greed, status and power, where do we start?”

“All at once, and all over,” Pablo chuckled. “Look, the first place we start is by clearly defining the working relationships people have with each other. There are two types, vertical managerial relationships and horizontal cross-functional relationships. When we look at those two types of working relationships, we most often fail to define the accurate placement of accountability and exact scope of authority.”

“Accountability?” I prompted.

“All too often, we fix accountability one level of work too low in the organization, and it plays into the blame game,” Pablo explained. “Between the team member and the manager, it is the manager accountable for the output of the team member.”

“How so?”

“Simple,” Pablo said. “The manager selected the team member, trained the team member, provided the tools for the team member, selected the project for the team member, created the working environment for the team member. The manager controls all the variables around the team member, it is the manager accountable for the output of the team member.”

“But if the team member underperforms, doesn’t that point the finger at the team member?” I countered.

“See, you fell right into the blame game,” Pablo smiled. “The team member does have an accountability, and that is to show up to work each and every day, to bring their full potential, to exercise their best judgement, in short, to do their best. It is the manager accountable for the team member’s output. The first place to start is to fix clear accountability.”

Carrots and Sticks

“People have a fair, intuitive sense of their own capability,” Pablo continued. “And, they yearn for opportunity to exercise their full potential. To do otherwise causes people to wilt. A great deal of a person’s self-esteem, even identity comes from the value they see in the work that they do.”

“So, the system in which they work has impact on how they behave?” I floated.

“It’s not just the system, it’s what people believe about the system. What we believe, our assumptions, the way we see the world is what drives our behavior. Look, the real question is, if we believe that people want to fully participate at their highest level of capability, spread their wings toward independence, that they do not need a carrot and stick to get on with their work, then what kind of managerial system would we create?”

“This sounds a bit idealistic, don’t you think?” I countered.

“Not at all,” Pablo replied. “This is about hard nosed work. Making decisions and solving problems, tough decisions and difficult problems.”

Assumptions About Work

“I would assume most companies have real problems to solve, so what do you mean, if you want your team to feel high levels of job satisfaction, you give them a real problem?” I asked.

Pablo thought for a moment. “Sometimes, companies engage in contrived exercises. To build a team, they take a group to a local ropes course, or a game of tug-of-war over a mud pit. Those exercises provide only temporary relief, short-lived when the team returns to work. The work itself has to be satisfying.”

“What leads a company astray?” I wanted to know.

“Oh, that’s not so hard to understand,” Pablo replied. “First, I think we have misconceptions about why people work. And, then we base our managerial systems on those misconceptions. It’s a flywheel that eats itself.”


“Some companies think people work only because they have to, only in exchange for meager compensation to put food on their table. Or, more substantial compensation so they can buy a boat. They believe employees are simply self-centered and have no inherent need to work. That our labor system exists only as a commodity. It’s a scarcity mentality.”

“As opposed to?” I said.

“People have an inherent need to work. People have an inherent need to contribute, to their own self-independence, and also to the positive social systems in which we live. Look at the number of hours in a work week. It has been coming down over time, but in the US is currently settled at around 40 hours. People need a substantial, material amount of sustained work, where they can contribute their full capability to solving problems and making decisions. Managerial systems based on this understanding are much different than those based on greed.”

Sense of Accomplishment

“If you want to change the behavior, change the context,” Pablo repeated. “How do I want my team members to show up for work? As the CEO, I have to create the environment that encourages the behavior I want.”

“For example?” I asked.

“Personal accomplishment,” Pablo said. “Let’s just take that one.”

“Okay, are you suggesting we walk around and hand out attaboys so people get a sense of personal accomplishment?”

“Sure, people need acknowledgement, but hollow acknowledgement does nothing for the human psyche. If you want people to have a sense of personal accomplishment, give them something that challenges their capability, challenges their skill set, gets them out of their comfort zone. And, I am not talking about some contrived exercise. If you want people to feel a sense of personal accomplishment, give them a real problem to solve.”