If you want to track the rise and fall of buzzwords over time, the Google Books Ngram Viewer, which tracks word frequency in a vast number of books published since 1800, is a very useful tool. It reveals, for example, that while “accountability” has been consistently rising in popularity since 1950, “empowerment” only arrived on the scene in the mid-1970s, enjoyed a rapid rise and then plateaued in the late 1990s.
That’s a pity, because at IDU we believe very strongly that if you really want people in an organisation to have a sense of sharing in its success, you need to empower them with the tools that promotes a sense of ownership for their actions and ultimately some true accountability. One of those tools is accurate, timely financial information.
It’s especially important to deliver this financial information at the level of individual departments – and to deliver it in a way that makes sense to non-financial managers. A typical line manager in most organisations have no more than basic accounting knowledge, if they have any at all. It’s not reasonable to expect them to be able to read ledgers, income statements or balance sheets in the same way as accountants can – and in fact, that isn’t the information they need.
What managers need to know about is what’s under their control – what is earned and spent in their departments. And they can be most easily held accountable for their financial performance if they’re able to track it in close to real time. This is easier if they have quick access to just the numbers they need, in a format that’s easy to understand and interact with.
If line managers are empowered to propose their own revenue and spending budgets, then manage and adjust those budgets in real time, they’re empowered to respond quickly and effectively to changing conditions, both within the organisation and in the marketplace. How much of our travel budget have we spent? Can we afford that high-profile trainer the engineering team has asked for? Who’s pushing the limits on their expenses a little too hard? Are we on track to meeting our revenue targets? With good financial management systems, getting answers to questions like this should be as simple as checking a social media feed.
A number of things can happen as a result. First, it’s possible to spot and respond to anomalies in time: What’s behind an unexpected spike in sales of a product you weren’t promoting, and is there an opportunity to seize? Why have several clients placed smaller orders than usual? Do we have a problem? When you can ask the “why” questions early and get answers, you have more chance to take the right action.
Second, it becomes harder to avoid, evade, delay, escape, stall, deny and otherwise hide from reality. If the numbers are there in front of you every day, you can’t be surprised by them; and if they’re equally visible to your own manager and whoever’s managing them, you have an incentive to take care of them.
Finally, having user-friendly financial analysis and planning systems in place saves time. If managers can add comments and explain variances when they need to request a budget update, for example, the finance department is able to make a quick decision instead of having to delay while they wait for more information and explanations.
So if you’re concerned about staff who don’t seem to be taking ownership of their own performance – the first thing to do is make sure they have the information they need to make that ownership real.