Friday, March 8, 2019

The structure of accountability in effective organizations

The basic accountability structure in effective organizations is surprisingly simple. It consists of two parts: the first is a thorough accounting, and the second is an appropriate signal (thorough and appropriate are key terms here). An effective organization is defined as one that regularly achieves its mission.

The accountings that go into an accountability system are determined by what needs to be accomplished in order to achieve the organization’s mission. A hospital would consider patient outcomes. A business would consider its ability to be innovative or profitable.

Regardless, the accounting must be thorough. No one would invest in a company that released one month’s worth of financial records from one of its ten divisions. The decision to invest would be invalid. No one would have surgery in a hospital that released only its patient outcomes for a type of surgery other than what you will have. In either case the information to make an effective decision is missing.

Now consider what would happen if each of these organizations was required to change based on this information. If the company forced a change on its other nine divisions, or even within the division that provided the months’ worth of books, those decisions would be invalid at best, and at worst dead wrong. Acting upon them will make the organization less, not more efficient, and risk damaging the organization in a very real way. If the hospital forced a change based on its limited information, it risks undermining areas of surgery that are highly effective and ignoring areas of surgery in dire need of change. Again, the outcome is that the organization becomes less, not more efficient, and risks real harm to the organization and its mission. In the case of the hospital the harm extends to the patients the hospital is supposed to serve.

Now consider signals. Signals represent the forward-facing decisions that will be made to better align an organization and its outcomes with the mission. Signals consider the accountings and then act appropriately according to the mission being considered. Because organizations are complex things different signals are appropriate for different circumstances. Signals will range from being dictated (minimum or no flexibility) to being professionally determined (maximum flexibility).

Consider the signals to be made in a criminal case in which the mission of the court is justice, in which case the signal is largely dictated. The accounting, provided it is thorough, would convince a judge or jury to apply a sentence commensurate with the crime, representing a dictated signal.

Consider the signals to be made in the life of a technology company. Its mission at the start will likely focus on innovation without regard for profitability, but at some point, that mission will most certainly include the ability to return the investor’s money along with a profit. The appropriate signals should be in line with the then current mission, and to be effective will require a maximum amount of flexibility in deciding the best next steps.

Ineffective organizations are those which rarely, if ever achieve their mission. All too often such organizations violate the accountability structure used in effective organizations to an embarrassing degree. Ineffective organizations frequently rely on partial accountings, demand or make inappropriate signals, or in the worst-case scenario, both. As shown above, partial accountings lead to invalid decisions that make the organization less efficient.

Inappropriate signals directly put an organization’s mission at risk. Consider that the mission of justice would be poorly served if every court case was a crap shoot with all outcomes possible, with no regard as to the nature of crime. Consider that the mission of early innovation in a company would be poorly served if the signals were only about profit, just as the latter mission of profit would be poorly served through signals that we’re only about innovation. In each of these cases the signals are inappropriate and threaten the mission, and if left unchecked, will cause the organization to fail.

The most frustrating of all the scenarios would be one in which the organization was required to use partial accountings and then be forced to make inappropriate signals. In the case of the court example lots of innocent people would go to prison and lots of guilty people would not and the mission of justice would not be served. In the case of the tech company no one would have a clear sense of what was actually going on and the resulting signals would be unlikely to represent decisions capable of accomplishing any of the missions. Bankruptcy would be the most likely outcome.

Which brings us to the structure of current school accountability. Schools obviously have a very clear mission, which is to maximize the educational benefit for each and every child, and an effective school would be one that regularly does that. An effective accountability system would be one that created thorough accountings against that mission, and then given the complexity of educating a child and the unique circumstances of each school, allowed for the maximum amount of flexibility in the signals.

That is precisely what education does not have.

Instead, schools are told to make a partial accounting in the form of several test scores and then make a dictated signal of pass or fail, with additional dictated consequences for failure. No one can reasonably claim that a test score—or even several tests scores, even from the finest of tests—is anything other than a partial accounting against the mission. And no one can claim that the signals allow for the flexibility necessary to achieve a school’s mission.

Indeed, the structure of current school accountability is the worst of all possible scenarios: a partial accounting dictates that schools make inappropriate signals. Consider where that leaves schools: the organizations most responsible for the continuation of our civic democracy have been forced into an accountability environment that would cause the best organizations in the world to fail. In other words, an approach that would lead to bankruptcy, injustice, and outright failure in most organizations is now the manner in which we hold schools “accountable.”

Where we should take heart is in the degree to which public schools have managed to survive in spite of an embarrassingly bad accountability environment. Just imagine the possibility of what those same educators could do if placed in an accountability environment designed for effective organizations. Imagine that their accountings are no longer partial or incomplete, but rather thoroughly addressed the mission of schooling. Imagine that the signals were appropriate, allowing for the necessary flexibility to make the proper decisions regarding children and their education. Imagine the amount of recoverable effort and energy that could be converted to the mission of schooling simply by eliminating the inefficiency and frustration imposed by a bad accountability system.

We need public schools to be highly effective organizations, which means schools must have an accountability environment designed to support that goal. We can no longer afford an accountability environment designed to help schools fail, and while an argument can be made creating such an environment was never intended, that is exactly what was done. For the sake of our children let’s admit as much as a step towards a better place.