Have the Guts to Be Accountable

By Marian Salzman, Thursday, July 19, 2012, at 9:00 am.

This is the fourth in a series of 10 posts about different aspects of CEO branding.

Where does the buck stop in your organization?

U.S. President Harry S. Truman spelled it out with a sign on his desk: “The buck stops here!” With those words, which he also keenly referenced in speeches, he explicitly took responsibility for the decisions and actions of his administration. (Nobody needs reminding that not all occupants of the Oval Office have upheld that principle with the same rigor.)

There are plenty of good reasons why it’s important for leaders to take responsibility and be accountable for everything that happens in their organization. The simplest is summed up by what Truman said in his farewell address: “The president—whoever he is—has to decide. He can’t pass the buck to anybody. No one else can do the deciding for him. That’s his job.” The same applies to business leaders. If the person at the top is not the one with ultimate responsibility, then who is?

In principle, I can’t see any political or business leaders disagreeing that part of their job is to be accountable for their organization. In practice, it doesn’t always work out that way; when things have gone wrong and tough questions are asked, there are plenty of cases where leaders have fudged, ducked, quibbled and spared no effort to evade the issue. Cartoonist Christopher Weyant captured it perfectly in a drawing in The New Yorker of a man behind a big desk with a sign saying “What buck?”

One of the most eye-popping examples happened last year when News Corp. CEO Rupert Murdoch appeared before a British parliamentary committee investigating illegal phone hacking by journalists at News of the World, which News Corp. owned. He said: “I do not accept ultimate responsibility. I hold responsible the people that I trusted to run it and the people they trusted.”

In fact, it’s been a great time for watchers of C-suite foul-ups. In the wake of the disastrous Deepwater Horizon oil leak, BP CEO Tony Hayward effectively pressed the self-destruct button on his brand with this ill-considered comment: “There’s no one who wants this over more than I do. I would like my life back.”

There are plenty of intricate moral, ethical and governance issues at stake when a business leader sidesteps accountability, and they’ve been widely debated. As far as PR is concerned, it simply undermines three essential foundations of a strong personal CEO brand: fairness, trust and respect.

• Fairness. If as a senior executive you are happy to take the credit (and compensation) for things going right, isn’t it only fair that you should be willing to take responsibility if they go wrong? Fairness here isn’t just some high-minded, tree-hugging ideal. The oft-repeated classic ultimatum game experiment of economics has shown that people everywhere resent excessive unfairness; they resent it enough to punish it, even to their own disadvantage.
• Trust. Your employees, fellow executives, shareholders, suppliers, peers and the media will have opinions about how trustworthy you are. Those opinions will be influenced by many factors, such as honoring promises and respecting confidentiality. This is an important part of your personal brand. Being the leader means you are responsible for whatever happens, good or bad. If you shirk that responsibility, you risk being seen as a self-serving incompetent who can’t be trusted.
• Respect. There was a time when being respectable in every sense was a national obsession, but things have loosened up a lot. Even so, many business leaders are still more strongly motivated to earn high regard over the long term than to pocket quick and easy megabucks. Accepting responsibility for your company’s foul-ups will never be comfortable, but it will earn you respect if you do it honestly, without trying to spin it. Conversely, taking a “What buck?” approach might earn you swagger points for barefaced chutzpah, but it will damage respect for your personal brand.

We have all become tired of leaders responding to scandals by wheeling out expensive spin doctors with their predictable arguments that down is up. It has a corrosive effect, not least on the organization itself. It signals to employees that when the going gets tough they should focus on finding someone or something to blame.

If you want people in your organization to take responsibility for their actions and to be accountable for them, you must show the way by example. It’s up to you to create a culture of accountability. When CEOs own failure and take the blame for screwups, and they do it honestly, with good grace, it gives a powerful signal. It encourages the whole organization to recognize faults, own them and take steps to correct them.

Howard Schultz, the much talked-about CEO of Starbucks, famously admitted that the brand “had lost its way” and did much to tell that story and put his own self on the line—much to the delight of the press and curious coffee connoisseurs who eventually helped him turn the business around. There’s great humility and dignity in admitting mistakes and flaws, and those two character traits are actually great CEO brand assets.

[photo: creativecommons.org/Marshall Astor–Food Fetishist]

This entry was posted on Thursday, July 19th, 2012 at 9:00 am. It is filed under Brands, Features, Insights and tagged with accountability, accountable, BP, business leaders, CEO, CEO branding, CEOs, dignity, employees, fairness, Harry S. Truman, Howard Schultz, humility, News Corp., News of the World, president, respect, Rupert Murdoch, shareholders, Starbucks, The buck stops here, Tony Hayward, trust. You can follow any responses to this entry through the RSS 2.0 feed.