- Carl B. Watson, Ph.D.: [00:00:00] In modern organizations, there's a lot of shared accountability for outcomes, but the more people who are named accountable for something, the less people who have felt accountability for the thing.

... it's easy to say, "Well, who do you call?" If you don't have a good answer to that question, you have an accountability gap in your organization.

- Megan Alexa Watson: This is a podcast for leaders who want to drive change in their organization without losing sight of the people behind it, the purpose that fuels it, or the principles guiding it. I'm Megan Watson, joined by Carl Watson, and this is The Watson Standard.

- Carl B. Watson, Ph.D.: Empowerment is valuable in the context of the need for empowered teams, whether they be at the edge or anywhere else in the organization. There are a set of skills that are required for effectively empowered teams, and there's a culture that enables that.

One of the things that I have become fond of saying, people [00:01:00] wanna be empowered, but they don't also wanna be accountable. And you can't be empowered without accountability. That's the opposite of leadership, right?

Accountability as it becomes more fluid, is more difficult for leaders to respond effectively to success and failure, to learn effectively when things happen.

And so you have these shifts happening that are making accountability more challenging in organizations, and it's our approach to solving that problem is an important organizational question but it's also a cultural question. It's not just role and responsibilities, a decision rights question, 'cause overlaying all that, there's no decision right document that explains all the accountability in the system.

A large proportion of how accountability flows in the system is actually cultural. Finding ways for leaders and others in the organization, to share [00:02:00] accountability in a way that, is, workable. Such that there's always somebody who feels accountable, whether it is their named accountability on a decision rights framework, having somebody that feels accountable is always the important thing.

My favorite story to tell about the Marine Corps is that in boot camp, as a recruit, before you're even a private in the Marine Corps, they're talking about accountability. Given the nature of war, doesn't matter what level you are in the Marine Corps, there will be a moment where you are the accountable party, and there is no releasing of that accountability, that you have to hold it and make the choice.

That's a cultural ingrainment of dispersed accountability in a extremely hierarchical system. And because of the nature of the Marine Corps, it's intended to be a very [00:03:00] flexible fighting force, the most flexible fighting force on the planet. That is an important cultural element of what makes a Marine, a Marine. Our understanding of accountability tends to focus on these explicit delineation of decision rights and accountability and not on the cultural elements, and they're both important to focus on.

- Megan Alexa Watson: I love the push to be intentional in how we think about accountability and you said it perfectly in a way that my mind also thinks about named accountability versus felt accountability.

- Carl B. Watson, Ph.D.: Yes.

- Megan Alexa Watson: What are the ways in which a system, instills a culture of felt accountability? And where are the places where named accountability is gonna be the only thing to get people over the hump, so to speak? For example, we're having a lot of conversations in the leadership space right now about [00:04:00] "owner's mindset"...

- Carl B. Watson, Ph.D.: Yeah.

Yes.

- Megan Alexa Watson: And it's really interesting the way in which the use of certain words and terms flow in and out of the zeitgeist and the way that people feel about them. Some people can react to the concept of "owner" in the context of feeling territorial or possessive.

Some people sort of translate "owner's mindset" into,

if I was the biggest boss in the biggest room, what decision would I make?

- Carl B. Watson, Ph.D.: Yes.

- Megan Alexa Watson: The ability to think like someone who has full investment and full stake in the outcome.

- Carl B. Watson, Ph.D.: Yes.

- Megan Alexa Watson: I like the nuance of named accountability and felt accountability. If you see opportunity to move something forward for the organization, you have the internal motivation, yes, the sense of empowerment, but also the sense of, and if it goes [00:05:00] sideways I am comfortable with the fact that the buck stops here.

Yes.

Something that you said to me once, and it has always stuck with me. Empowerment does not mean you just get to do whatever you want. Empowerment is about "you are empowered to get buy-in to do the thing you want, and then to take accountability for the outcomes."

What are the ways in which, as leaders, we create the space for people to step up and grab that accountability? As I was doing some of my prior culture work, we often talked about, what it means to pick things up or put things down. Often we would hold so many things as leaders and get super frustrated that nobody was picking it up.

Why aren't they taking this on? Why aren't they taking this on? And it finally hit me, and I said it out loud, I was like, "Oh, friends, they can't pick it up until we put it down."

- Carl B. Watson, Ph.D.: laughs

- Megan Alexa Watson: And it seems so silly.

Yes.

There is something to that. We're so terrified that if we put it down, something's gonna break, but literally there is no way for them to grab it [00:06:00] unless we release it.

- Carl B. Watson, Ph.D.: One of my other favorite sayings, particularly to more senior leaders is you have to give up control to gain influence.

Instead of gripping something so tightly, where the part that other people can play in that work it becomes very, very small. You have to open up and release it and allow more people to play more central roles in that work that you are leading, right? That's an important aspect when people move from small team leaders to leading multiple teams, leading bigger organizations with bigger mandates and remits across the organization, that your ability to control or manage directly all the outcomes in your organization become less and less. You're just not able to do that. As you get more senior, you have to give up control in order to fully lean into your leadership, and it's a scary thing to do, particularly if you are the expert in your field. [00:07:00] It feels like you're losing something.

- Megan Alexa Watson: And it feels really risky. It's interesting 'cause what that's spiking for me is, what allows people to feel a sense of accountability is sometimes allowing them to feel the pain of failure.

- Carl B. Watson, Ph.D.: Yes.

- Megan Alexa Watson: For many of us as managers and leaders clears throat

who have a tendency to swing to wanting to protect people, the more protective approach is something I've struggled with, and I'm like, I need to shield my team from the way this can go wrong, or somebody thinking they couldn't deliver or somebody thinking we couldn't achieve something. And with that, I was taking away the opportunity for the team to learn about the consequences and impacts of their choices.

- Carl B. Watson, Ph.D.: Yeah.

- Megan Alexa Watson: I like to work with people who have a great eye for risk, looking around the corner, anticipating risk, but if I never allow [00:08:00] my team or my organization to feel the impacts of a misstep, there is no way that they can learn what it means to truly hold that accountability 'cause there's no consequences.

- Carl B. Watson, Ph.D.: Right.

- Megan Alexa Watson: If I hold all the consequences, they never experience that. They never learn the sense of accountability. Yeah. And so I'm super curious, is there a higher up organizational lens to this? I'll throw a small concept out, but I would love your thinking, where does accountability for P&L sit? Having to do those trade-offs is one that I think of. But I'm curious as you think about zooming out, what that looks like.

- Carl B. Watson, Ph.D.: I love the, this idea of how do you make sure that the folks on your team can grow and understand the consequences of their judgment and the choices they make, and having the sense part of empowerment is giving people [00:09:00] choice.

It's the both sides of it, right? They'll make some good calls, they'll make some bad calls, and your responsibility as leader is to help them grow and learn from those good and bad calls, but also to protect them from the worst calls, right? Calls that are career-ending or brand-destroying...

- Megan Alexa Watson: Exactly.

- Carl B. Watson, Ph.D.: Obviously are super important-

- Megan Alexa Watson: Exactly.

- Carl B. Watson, Ph.D.: to protect for. But also if you're making all the calls, then again, you're gripping too tight on the reins of management and not actually allowing, more and better work to be done under your remit, right? Because not all the calls that you make are actually the best calls, even though they're the calls you're the most comfortable with.

- Megan Alexa Watson: Yeah.

- Carl B. Watson, Ph.D.: 'Cause people will come to things from a different perspective than you will and make great calls that you can't predict are great calls ahead of time.

- Megan Alexa Watson: Mm-hmm.

- Carl B. Watson, Ph.D.: This challenge, as I was saying earlier, just gets harder as you get more senior in the organization.

I think a lot about how [00:10:00] interventions into a leadership team effectiveness are designed. They're frequently designed to deal with this problem. It's because it's such a common problem in leadership teams where the members of that leadership team feel overly constrained by the leader. And the leader doesn't understand why their direct reports aren't doing the things that they should be doing.

Quote-unquote, "should be doing."

- Megan Alexa Watson: Mm-hmm. Big emphasis on should.

- Carl B. Watson, Ph.D.: Right. Right.

- Megan Alexa Watson: Mm-hmm.

- Carl B. Watson, Ph.D.: I mean, there are ways to design accountability, both the financial aspects of accountability, whether it be a full P&L accountability or cost center accountability, where you have accountability for managing the budget and spend of the organization and then proving the value that you deliver with that budget and spend, which is financial.

Of course, there's management [00:11:00] accountability which is how authority flows and who reports to whom in the organization. And then there's also process or role accountability, which goes beyond management. So I may have a particular role in the product development process in terms of being a designer or program management, which gives me certain decision authority in the life cycle of a product, right?

But again what can be written down on a piece of paper is actually a very narrow view about how accountability flows in the organization. What I like to do is to watch a meeting essentially, and watch how people show up at that meeting and what's the share of voice and the balance of voice, depending on the topic.

And you can learn a lot about how accountability is actually working in the organization when you're observing the dynamics of a meeting where people are [00:12:00] trying to process information or trying to make a decision or a judgment. And the other aspects of accountability show up and you can see how someone's named authority is constrained, or how someone's named authority is quite expansive, in different organizations.

The question then, is there the right flow for the situations, the challenges that these teams are facing? And so it's a contextualized answer to the question as opposed to a universal prescription that you can make. And then really figuring out how do you need to work with leaders and teams to create that right balance.

And you're usually working with the constrained element in the system where a voice is systematically suppressed, that is [00:13:00] harming the organization's ability to make more effective decisions or to understand the problems they face very effectively. And this is usually a combination between a person and the authority that they're willing to display in the system, because it's risky to display authority because it's risky to accrue accountability to you.

Also certain functions have different levels of influence in the organization. Sometimes, a function has less influence than they need to carry the work in the organization, and then you have to balance that. We tend to try to redesign decision rights to solve that problem, and it almost never solves the problem because the problem isn't the named decision rights on the piece of paper. The problem is actually how authority flows, which is more cultural than org design.

- Megan Alexa Watson: It's the felt [00:14:00] authority, not the named authority.

- Carl B. Watson, Ph.D.: Yes.

- Megan Alexa Watson: This is a place I wanna continue to push us as we think about things like, organizations that have had strong centralized functions that are corporate functions that make decisions on how things are done across an enterprise.

And some of the swings between super strong centralized corporate functions or more distributed corporate functions that are embedded closer to the individual business line or organizational decision-makers. It's interesting 'cause as I think about my career there has been a high orientation to, "What is our single enterprise-wide approach to [insert thing here]?"

What are the ways in which we make sure that it solves for all of the imaginable possible, outcomes and business needs? Which we all know that's not a real thing, but we really like to pretend like it is. And how can we make sure that it's future-proofed? And how do we get this [00:15:00] perspective out in the system? And this will be the way we do things until the end of time.

Versus places now, especially as things are changing, I'm feeling more of a move towards or back towards a more decentralized approach. The ability for leaders in businesses to have more corporate function type services closer to them. I hear people talk about "full stack leadership" or the general manager, what that truly is, true general manager.

- Carl B. Watson, Ph.D.: Yeah, this is like a question about flexibility and where choice should sit in the organization. And the value of a enterprise. A corporate entity that has multiple business lines and those business lines, are more valuable because they sit in the context of this broader enterprise.

And the more [00:16:00] value that comes from the connection of businesses together in a corporate entity, then the more value you have in these centralized functions. And the less value that accrues from the enterprise that an individual business gets from the enterprise itself, then the less value these corporate functions are to that business unit.

- Megan Alexa Watson: How do you know? How do you know... whether it's getting value or not? What are the signals?

- Carl B. Watson, Ph.D.: Well, it's both a strategic question... and a financial question, right? And so the strategic answer to that question is related to where there is shared strategic value. And that could be at the product level, it could be at the customer level, in terms of customer segmentation. It could be at the business model level or the core technology level. And it could be across all that stack. [00:17:00] And the more integrated goodness you have across those aspects of the business design, essentially, the more it's the case that there is higher level value for the business by being part of this corporation.

So you know by looking at the business design and looking at these discrete elements of the business design and seeing where there is value from the shared aspects of the work. The problem is that there's directions associated with that, where there can be increasing value or decreasing value, and being aware of that directionality becomes also an important element associated with it.

That's a super important part of it. I also think that there's also a distinct element associated with it. So certain functions are having a renaissance, right? Let's take something like design, which is one of my favorite functions that I am not a part of, [00:18:00] right?

- Megan Alexa Watson: Okay, we're gonna do a whole episode on functions we love that we're not a part of. We'll come back to that. We'll come back to that, 'cause I've got a list.

- Carl B. Watson, Ph.D.: Right. And so design as an example in software organizations, went through this big renaissance several decades ago. And during that renaissance software companies had to figure out how to raise the design capability within their organizations in order to meet the massively rising expectations from their consumers for the ability to easily use and consume their software. That process was painful for many organizations.

- Megan Alexa Watson: Accurate.

- Carl B. Watson, Ph.D.: To do that work often requires stronger centralization because you need to build capacity and capability and then create space for that expertise to flow [00:19:00] into the system effectively. Which also tends to require a center of gravity to break some of the inertia that is inherent in organizations and create new working relationships and new ways of approaching old problems based on the expertise that's being inserted into the system.

So that's another separate strain in which creating a stronger central function may be necessary in order to create this strong capacity in the organization. And then over time, that can be more distributed and dispersed as the organization has now learned a new trick, and that skill set is now integral to the operations of the firm.

That's another way that balance can play out. There's no set point, right? You have to figure out what's needed now and navigate effectively.

- Megan Alexa Watson: I feel like we should take a moment [00:20:00] to define some concepts, and I'm thinking like, accountability, authority, influence. And inherent tensions around those three things in the current moment.

- Carl B. Watson, Ph.D.: I think about authority as, it starts with named authority. It starts with I have a role with certain authority in the system where I am the responsible party for the enterprise on certain judgments that the enterprise has to make.

We talk about that authority typically in terms of role, what your role is accountable for, and we talk about the authority in the context of what teams I get to manage and lead on behalf of the firm. There's also this element of informal authority, and all these elements have both formal elements and informal elements associated with them. Informal authority is essentially influence, right? [00:21:00] My influence is either beyond, hopefully, or less than the authority I have formally in the system. I will be a more effective leader- any leader will be a more effective leader, if their influence exceeds their authority.

- Megan Alexa Watson: Mm-hmm.

- Carl B. Watson, Ph.D.: Your ability to have greater influence has a lot to do with the networks that you are deeply connected to and known to be deeply connected to. Your personal history in the organization and the relationships that you nurture in the organization over time, at all levels.

And so a lot of leaders' authority actually comes not- from their relationship with their peers, but their relationships with the cadre of individuals that actually make things happen in the organization. That are most responsible for action, and being connected to those [00:22:00] folks, because then they can get more done, because they have these close relationships with people who are known for getting things done in the organization, which is an important kind of power, influence in the organization.

Now, accountability In my view, is a more defined description of authority. And so I tend to think about what I am accountable for, right? Then I delineate those accountabilities, and that essentially means that if the CEO of the company needs to find the person who owns a process, or owns a set of data, or owns a set of work, then that's who the CEO, or anybody else, knows who to call. When you have important outcomes with no accountability it's easy to say, "Well, who do you call when you're trying to get an answer to this question?" [00:23:00] And if you don't have a good answer to that question, you have an accountability gap in your organization.

It becomes challenging because in modern organizations, there's a lot of shared accountability for outcomes, and then it becomes- there's very typically a joint accountability for certain items. So being able to call two people maximum-

- Megan Alexa Watson: he's like, "Please, please, please, no more than two."

- Carl B. Watson, Ph.D.: Yeah. Please, yeah. But the more people who are named accountable for something, the less people who have felt accountability for the thing. The informal aspect of it is what do I feel accountable for? And sometimes there's a mismatch between those two things, right? When you are named accountable for something and you feel less accountable, sometimes that's a mismatch in your influence, right?

I don't have enough influence to actually deliver this thing. Then you feel stuck.

- Megan Alexa Watson: Mm-hmm.

- Carl B. Watson, Ph.D.: Other times it's because there's too many parties. I don't know how to [00:24:00] express my accountability given how shared this accountability is.

And then it's really about, how do I collaborate effectively with these others in ways where we all feel joint accountability for the outcomes here? And if because of either personality, or other factors, that's not possible, then it becomes a problem that the organization needs to solve for, if those outcomes are important for the organization.

- Megan Alexa Watson: I wanna dig in on the concept around influence and named versus felt accountability. But also the conversation around, where are the places where you are driving your authority across with your peers, down into the teams that are getting things done, or up into potentially [00:25:00] more senior leadership that are making decisions.

You know I have a lot of passion around starting to explore the idea of followership-

- Carl B. Watson, Ph.D.: Yeah.

- Megan Alexa Watson: ...as much as leadership. And I haven't actually decided if I believe the thing I'm about to say. I'm making it up real time. So I reserve the right to come back on a future episode and say I don't believe it anymore.

But as you were talking, it made me think about, what is the power of influence to drive, inspire, spark felt accountability? If I get to the core of what it means to be a leader in this moment... as you have talked about. As the work is getting moved to the edge, decisions are getting moved to the edge, the information is closer to the edge.

Is there something about how one of the most critical things a leader [00:26:00] can do is to be able to influence a sense of felt accountability out, down, and up in a system? It feels like there is something to... in a world where reporting lines are gonna be more flexible, where, as we've talked about, people are getting deployed to work, where there is a shared joint accountability, whether or not it's truly joint, different conversation...

- Carl B. Watson, Ph.D.: Every leader, and probably most people in the organization who are aware of politics in the organization, are always working on how their influence flows in the organization. And influence is not a fixed thing. It is a social construct. It is who people listen to in the organization, on what.

The more [00:27:00] influence you have, the broader you are going to be listened to in the organization on things that may be completely outside your actual expertise and accountability in the organization.

- Megan Alexa Watson: At least in my recent career history, the leader that makes the decision, who has named authority over things is the power play. Who gets to decide the organizational structure and hierarchy, and who owns what book of work, that was the power.

It feels like there is going to be more and more increased power in whoever is able to influence who has felt accountability, in positive and negative ways. Maybe this goes back to my continued struggle around the whole "thousand flowers bloom" approach... the leaders who influence felt accountability in too many disparate ways, and none of those people actually hold true accountability for something, what chaos does that create?

Or in the places where you're trying to drive [00:28:00] co-creation and innovation, how powerful and amazing and positive is it to be able to disperse and diffuse felt accountability to a broader range of teams, individuals, and leaders to then be able to create something awesome they couldn't have created on their own.

- Carl B. Watson, Ph.D.: Treating your influence as a precious commodity is important because it can be eroded through bad judgment or broken relationships, and it can be reinforced with shown effectiveness in nurturing your relationships and creating a history of accomplishment that more people feel attached to.

I think a lot of leaders make mistakes where they focus on the history of their personal accomplishments, and other people don't feel attached to those accomplishments, and that reduces their influence because it's about them, and not about us.

- Megan Alexa Watson: The other thing that sparks for me is, as you were talking [00:29:00] about influence as a recognition of reputation-

- Carl B. Watson, Ph.D.: mm-hmm.

- Megan Alexa Watson: ...I think a lot about what are people's brand in a system, positive or negative. What are they known for? What are they trusted for? It again goes back to this question of, "What is the gap between how you want to be seen and how you are actually seen?"

And what happens to leaders in the moment where they recognize that their named accountability, their felt accountability, their sense of influence, their actual influence- when none of those things line up. How they think about their ability to transform how they are perceived, transform their influence in the system, through intentional choices.

I don't have the magic answer to that, but that feels like an unlock in many cases.

- Carl B. Watson, Ph.D.: I mean, that's the basis of a lot of leadership coaching. A lot of leadership coaching centers on helping leaders change how they are perceived in [00:30:00] the organization in order for them to be more effective at delivering their leadership and doing the work that they're accountable for in the system.

And it's not necessarily an easy thing because reputation it's both fact and fiction, right? It is how people made sense of things that have happened in which you participate-

- Megan Alexa Watson: What are the stories they are telling themselves-

- Carl B. Watson, Ph.D.: That's right.

- Megan Alexa Watson: ...about it.

- Carl B. Watson, Ph.D.: Yeah. That's right. And stories, by their very nature, have only limited accuracy.

- Megan Alexa Watson: Mm-hmm.

- Carl B. Watson, Ph.D.: And the accuracy is not the point. It is the plausibility, it is the meaning that people make from those stories that becomes the point. And so what you're really trying to do is change the narrative-

- Megan Alexa Watson: Mm.

- Carl B. Watson, Ph.D.: ...about you and the organization, which does require you to change some things, right? You just can't change the storyline.

- Megan Alexa Watson: Yes. That is so, it's so key, and when we talk about how people are perceived or how leaders are perceived, it's so easy to treat it as a purely cosmetic effort, something that is on the [00:31:00] surface.

I think the challenge is increasing skepticism around narrative, story, brand, reputation, is when there is a mismatch between this espoused narrative and the actual behavior.

- Carl B. Watson, Ph.D.: Yeah, yeah.

- Megan Alexa Watson: And that mismatch, even if it is not consciously processed, individuals and systems hold with that.

- Carl B. Watson, Ph.D.: Yeah.

- Megan Alexa Watson: ...and it carries along with that team or with that leader.

Megan Alexa Watson: And that's it for this episode of The Watson Standard. We've shared some things to think about, talk about, and put into practice. Follow the series and join us next time as we continue redefining leadership and redefining organizations.