Consider this: accountability is the next frontier in entrepreneurship and small business. Particularly in small and medium business, accountability starts strong in the beginning, when there are just a few people, then dips, as the company grows, and then rises again as the growth continues.
What is accountability? I’d like to say that it’s common knowledge, we all know it when we see it. That’s probably not good enough though, so perhaps we can say it’s a matter of setting expectations specifically, and tracking responsibility for results.
I wish I had the data to prove it. I don’t. I’ve talked to a lot of people about it. I’ve seen it in a lot of different companies, for several years. But, although the chart here may look as if it’s the result of academic research, it’s not; just purely conceptual.
This is what I think is happening:
- At the beginning a healthy startup works like a bunch of mice finding a place to nibble on a big piece of cheese. There’s much more to be done than can be done. Two or three people working together know who’s doing what, and why. They’re working shoulder to shoulder.
- The dip is a natural function of growth. You have more people as you grow, but normally that comes in a culture of everybody doing what they can, without a lot of supervision. Everybody tries, but it takes structure, and organization, to keep a hold on accountability. It also takes dealing with people more objectively. However, in a small business, these are people, the same ones who were working shoulder to shoulder. It’s hard to introduce metrics, and tracking, and then follow up together with holding people responsible for the results.
- As the company continues to grow, it develops structure. The more people, the less personal the business dealings, the more likely metrics and structure and tracking and responsibility for results are implemented.
As I consider this, it seems like a natural phenomenon, a function of the way people work in groups. It also seems like the loss of accountability becomes worse as time goes by and as change accelerates, modifying our ways of working together. We have tools to make us more productive, so we move data faster; but do we have tools to make us more accountable?
No, probably not … accountability isn’t a matter of tools, it’s a matter of behavior. At the core, it’s people who set expectations, track results, and hold other people responsible. And that’s tough.
This is great, and it is SO TRUE! It is surprising that there isn't any data to back it, but anecdotally, we endorse your proposition as we see this in virtually every small business owner client we work with.
I also agree with the first comment that the experience base of the owner is key. But considering the number of businesses in this size range (est 96% in the US!), there are an awful lot who don't have the experience to understand that PLANNING, not just plans, is essential, that planning is a never-ending aspect to management, and that orgs must adjust if they are to grow.
Thanks for the wisdom!
Interesting article and I can see what you mean. I would like to add an alternative view, having been working in start ups for some years now and currently on my 4th, I think the accountability issue is dependant on the senior management.
In my experience, effective top people running the company when the headcount is small can often become much less effective when the company grows. As a result you get the result you mentioned. For a start up to grow and remain effective often means the top people need to be changed out. This recognises that different management experience and style is not all the same and you need to have the right mix of skill and experience to fit the stage of company growth.
The wrong mix of skill and experience will result in less accountability. Generally as a company gets to the 200 plus head count the share holders take more interest to make sure the top management are the right people and hence the accountability improves as per your graph.
So bottom line is to recognise the top management at the early stage are unlikely to be effective as the company grows and share holders or stake holders should take more interest in the top team all the way through from company start through the various stages of growth.