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Building accountability into your accounting practice

Author: ICAEW Insights

Published: 10 May 2023

Taking responsibility for mistakes is assumed, but how can leaders foster a deeper relationship to getting things right and supporting each other when they go wrong, ask Chris Mettler and Jon Yarian?

In 2005, a trader at Mizuho Securities in Japan mistyped an order for shares and cost his company 27bn yen (£158m). He had intended to sell one share at 610,000 yen, but instead sold 610,000 shares at one yen each

In 2016, the cruise ship Spirit of Baltimore crashed into a wharf during a midnight cruise with 400 passengers on board. The captain had fallen asleep

We’ve all made mistakes, fortunately few of us have made one quite so public or catastrophic as these two examples. Spoiler alert: both lost their jobs.

When we hear about mistakes, particularly those that have endangered or even cost lives, we start to think about accountability. In the common vernacular, accountability is usually intended to mean someone facing the punishment they deserve. It’s a purely punitive concept and one that is primarily concerned with vengeance, retaliation and just desserts.

Ideally we should think about accountability differently. Holding yourself accountable and having those around you operate from a place of accountability can be a significant factor in overall success. And it absolutely does not work if your definition of accountability is swift and extreme justice.

The punitive model of accountability leads to a culture of scapegoating and blame shifting: it must be someone’s fault, and it’s not mine, so let’s all join the hunt for the perpetrator. This is where the real executive chess occurs – setting others up for future, as-yet-unmade mistakes, shifting potential blame and positioning oneself to be left standing when the wreckage is cleared.

All very unhelpful. 

If we’re going to understand accountability and use it effectively, we need to set aside these negative, unhelpful impulses. Avoiding blame or seeking punishment are two sides to the same coin, one that focuses on the mistake, rather than what can be done about it.

Instead think of accountability as the means by which we restore what was lost to others while learning and growing in the process. It’s about standing behind what you’ve done and owning its consequences with the intention of using it to better yourself and those around you. It has three key characteristics:

1. Acknowledgement

Unlike the mistake-avoiding culture found in almost any bureaucracy, effective leaders and teams immediately communicate what they understand the problem to be and involve others in looking at it. This is different than confession for forgiveness. There is nothing wrong with that as a concept, but it has no use here. This is open acknowledgment of what occurred to any and everyone it affected, in an effort to truly understand what happened and what it will take to make it right. Get over yourself and get to work in seeing how your mistake has impacted your client, your team, and anyone else you put in harm’s way. 

Doing this and having others see it in real time is the best possible means for teaching acknowledgement as a practice. Done sincerely, it will encourage others to do the same.

2. Restoration

This is literally the opposite of punishment. Rather than concerning yourself and your organisation with how the offending party will face the firing squad, you will see what it takes to repair and restore what was damaged for others. More often than not, reprimands and punishments simply create more chaos and bad feeling. Those hurt by the mistake are still hurt, the person who made the mistake is now hurt, and everyone who witnessed the whole charade has learned that they better never make a mistake. 

Instead, seek out the means by which the stakeholders involved can hurt less or perhaps be made entirely whole over time. This could look like financial compensation, time off to accommodate the extra hours required to clean up the mess, an opportunity to restart a project that has been hopelessly derailed, so on and so forth. Show yourself and your team that your focus is on getting and being better, not channeling collective anger into “justice”.

3. Reconciliation

Having acknowledged what happened with a curious and open mind and having made every effort to address the impact of the mistake, you are ready to move forward in a way that assures everyone that the circumstances that produced that mistake won’t occur again. It doesn’t mean there won’t be new mistakes – every dynamic leader and organisation makes them – but it does mean that the people who depend on you won’t fall into that particular hole a second time. They can proceed with the knowledge that you, like they, won’t forget the mistake and have taken efforts to ensure it won’t be repeated. 

From here, you can start over, not like it never happened but instead like it definitely happened, and everyone learned from it. This could look like a simple adjustment in process to a significant reorganisation in roles and responsibilities. Whatever it is, it should be a real and validated change that others experience instead of just hearing that “things will be different now”. 

High-functioning teams do not have variable levels of accountability within them. Accountability is either embraced holistically or it isn’t really there at all. Enabling someone who lacks accountability kills the concept for others and removes it from your culture. Restarting or resetting accountability as a team value is difficult – people may forgive, but they rarely forget. And their instinct will be to defend themselves from everything that comes with being culpable inside of an organisation that lacks accountability as a core concept.

On the bright side, a new relationship to accountability can begin any time, including right now. 

After all, it’s not like you crashed a cruise ship or made a £158m typo.

Chris Mettler and Jon Yarian are authors of ‘Spark: 24 Concepts to Ignite, Unstick or Supercharge Your Work Life’

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