September 27, 2015 • Curriculum
I love public accountability. I love being held accountable for my goals; I love the peer pressure that comes with declaration of a goal, rather than simply a personal accountability.
I love big goals (really big ones). NASA declared publicly that it would be live-streaming the 2015 Supermoon Eclipse. That works out well for those of us in Columbus, Ohio whose view may otherwise be obstructed by clouds. That’s a big goal, with quite a bit of public accountability.
But I digress.
As I teach goal-setting in the context of budgeting, public accountability is a key teaching point. I usually present it in the context of a hypothetical goal: To throw a party. As soon as the invitations go out, the public accountability begins. Bonus points for inviting those whose opinion you truly value and respect. The more you respect those holding you accountable, the more likely you’ll be to hold yourself accountable as well.
Public accountability is a key part of our governance, both within state, local, and federal governmental actions, but also as part of our companies and organizations. By holding those in charge accountable for their actions–not simply their rhetoric, but for their actions–we effect change. Consider the law firm who wishes to diversify its partner ranks. It declares that goal publicly, and the public cheers. With public accountability–effective public accountability anyway–we are primed to ask for status updates from the firm. What actions has the firm taken to diversify its partner ranks? How has the make-up of the partner group changed since declaring that goal? What are the long-term plans to continue to support this goal?
Without the accountability–and we, the public are responsible for that accountability through our questions–a goal is simply rhetoric. It’s just hot air. It may be aspirational, well intentioned hot air, but it is still hot air.
But for all its positives, there is a dark side to public accountability. And unfortunately, we saw it play out via Volkswagen last week.
Everything started out fine. Martin Winterkorn declared a goal publicly. The goal was specific, measurable, and time-bound, and he felt it was attainable and relevant for Volkswagen. (That’s the SMART mnemonic from Paul Meyer’s Attitude is Everything if you’re keeping score at home.)
- Specific: To triple sales of cars in the U.S. The goal is specific because it is product-specific and geographically specific. It goes beyond simply “increasing” sales to specify what the target increase is.
- Measurable: 300% of current sales is equivalent to tripling sales; the goal is measurable because we can track and count the cars sold.
- Attainable: It seemed attainable given the amount of investment the company was willing and able to make and based on the activity of industry peers (for example Toyota).
- Relevant: The increase in sales was centrally related to Volkswagen’s U.S. strategy for growth; it was relevant to the company.
- Time Bound: Winterkorn aimed for 2018, a clear deadline, making the goal time-bound.
On its surface, the goal was a good goal: It was SMART. The public–particularly those who benefited from growth strategy–was thrilled. But things went terribly wrong.
At some point, instead of using public accountability to its advantage (to demonstrate success, strive for excellence, and remain focused on a core value), public accountability starting driving the detriment.
Instead of focusing on growth strategies that would put the company on track to achieve its goals, investing in its people and its products in the process, the company focused on the goal, and achieving it at all costs. Even, as it turns out, by cheating on emissions tests on 11 million vehicles worldwide, including 500,000 in the United States. According to Page 3 of the company’s 2014 annual report 893,000 cars were delivered in North America in 2014 (up from 843,000 in 2012). At least some of those deliveries presumably included cars with cheated emissions standards. (My back-of-the-envelope math suggests about 14.5% of the sales in North America included the software governor: If 860,000 cars were sold, on average, between 2011 and 2014–four years–that’s 3.44 million cars. 500,000 cars (the number that included the cheat) divided by 3.44 million is 14.5%.)
The numbers aren’t any better worldwide. In 2014, Volkswagen sold 10.2 million cars (as reported on Page 2 of its 2014 annual report). At least some of those sales presumably included cars with cheated emissions standards. (Using the same back-of-the-envelope math, it isn’t outlandish to say that 25% or so of the cars sold during the four year period, 2011 through 2014, may have included the cheat.)
No one believes cheating is appropriate or lying is acceptable.
But at some point, the pressure from the public accountability justified both within Volkswagen. Instead of motivating the company to do its best, while understanding that excellent leadership often calls for revising goals and plans, it motivated the company to accomplish the goal no matter what.
That’s a problem.
As long as we embrace surface analysis, the binary yes/no test for whether or not something is “good” or “making progress” we’ll continue to read stories like Volkswagen’s. In my dealings with goals (not to mention public accountability) and for most of my clients, students, friends, and peers, those holding us accountable are reasonable. They understand that goals evolve and real world circumstances often cause deviations from a plan. (Sometimes really great deviations.)
We operate on a smaller scale than Volkswagen, with fewer external pressures, less in sales revenue, and more personal relationships. But humans are humans, and most of us are reasonable.
Consider NASA again. The Supermoon Eclipse is hotly anticipated, and it’s a big deal. The live stream has two sources (Alabama and California), with other feeds (Chicago, Atlanta) in the queue as well. Just in case. There are scientists standing by to answer questions via Twitter (#askNASA) and to discuss the event. The public accountability spurred NASA to plan well, to embrace back-up plans, and to offer back-up to the back-up plans. (I’d wager the scientists would ad lib lectures if the live stream were interrupted.)
But it didn’t prompt NASA to cue footage from 30 years ago, just in case. It prompted action, not fraud.
Don’t be Volkswagen. Don’t sacrifice your integrity for the public accountability. It will take much more than a blood moon for either to return.
For Further Reading
“As Volkswagen Pushed to Be No. 1, Ambitions Fueled a Scandal” by Danny Hakim, Aaron M. Kessler, and Jack Ewing (New York Times, 09.26.2015)
There’s much more than just public accountability in “Goal Setting for Portfolio Careers” (part of the Starting SMART online learning series from Minerva Financial Arts). The course includes five videos, three activities, and eight readings, all meant to bolster your goal setting skills in building a creative portfolio career.