Neem contact op: (+31) (0)6 521 599 29   Mail Ons

Increase Accountability Without Incurring Distrust

Geplaatst op nov 12, 2013 in News

Introducing more accountability into an organization is never easy; all too often the people you are trying to make accountable interpret your initiative as a sign that you don’t trust them.   It’s a problem I encountered frequently in the post-soviet companies that the private equity fund I advised invested in.

A particularly striking case in point was the experience we had with the local management of a large flour mill we had acquired in Romania in a privatization tender.   They were suspicious from the get go; Western investors in post-communist countries were known for firing incumbent managers and installing their own people.

So although we left the old management intact they questioned the motives behind every organizational change we attempted.  It was, however, the introduction of the standard internal auditing system used by our investment partners, the largest flour mill in Greece, that really got them going.

We tried in vain to convince the chief of the Romanian mill’s Accounting Department that the Greek Stock Market required its member companies to use the system.  He just kept on insisting that we didn’t trust him and his team and the system was our way of ensuring that the locals wouldn’t cheat us.

The whole local management team shared this sense of humiliation and injury, and this was starting to have a serious impact on morale.  No matter what we said, it was impossible for us to convince them that the auditing system we wanted to install was identical to the one used by the Greek flour mill and, therefore, had nothing to do with whether or not we trusted them. As a local friend expressed it:  “the more you try to convince them with words, the more suspicious they become.”

So we stopped talking and started thinking and acting.  I began by sharing with them my own monthly report on the flour mill’s performance to the fund’s management team in Greece.  There, they read for themselves my assessment of their prospects and problems, along my proposals on how best to move forward.   None of what they read was particularly surprising but they felt flattered that I would share such an important document.  Most importantly, it made them feel trusted.  Building on this, I started to ask for advice on what to put in the report, which they took, as intended, as a signal that I valued their experience.

After about four months, I took the three top managers in the Financial and Accounting Department to the Head Office of our partners in Piraeus for a week.  There, they could see for themselves that the company did indeed use the system in all its mills and that auditors appointed by the Greek Stock Market Authority reviewed the results of every mill.  We also asked the Greek mill’s financial managers to explain that accountability systems like this did not signify a lack of trust but actually served as a means of increasing it.

This visit not only enabled our Romanian managers to better understand the relationship between accountability and trust, it also fully convinced them of our sincerity.  They appreciated the open, collegial, and hospitable way their Greek counterparts treated them. At the same time they gained a great deal of respect for their new owners’ large, modern, well-managed mill and started to feel pride in belonging to the same company.   They came away convinced that we were determined to keep the local team on and to help them become an integral part of the larger group.

When we got back, I asked the local team to start submitting their reports to me along the lines of my own report. At first they found it hard to openly admit in writing their omissions and failures!  Nevertheless, they made a start and over time they began to recognize the considerable gains they would derive from monitoring their own productivity in the reports.   They learned that by looking at themselves in the mirror and seeing themselves as they really were, they would better understand what they needed to do in order to keep improving.

Laat een Reactie Achter