What Do You Owe Your Company?

By August 9, 2019Business, Leadership
(Deciding When to Escalate Business Issues)

A technology firm that we consult with had an officer who also owned several local food trucks. This was not a problem until another employee went to one of these food trucks for lunch and happened to see the officer working when he was supposed to be conducting company business!

The employee debated whether or not to raise the issue to management. Did he have the right to do so? If it was simply a one-time error in judgment, would he look petty by escalating it? And, to whom would he report it? HR? Legal? Management?

Finally, he decided to raise the issue and, after further investigation, the company officer was terminated.

A leader cannot, and should not, address every issue that arises; there are typically too many for them to effectively address. As with any other matter, leaders need to discern which issues require attention and which can be allowed to slide.

We call this the Continuum of Accountability.It is important for a leader to assess the degree of risk in a given situation in order to determine the necessity and timing of addressing the issue. Below we outline the three major categories on the Continuum of Accountability.

Minor Annoyances: These include processes that no longer make sense but are not overly damaging to the business, and thus likely do not merit escalation. At one of our client companies, the head of sales insists on manually entering monthly charges on a spreadsheet despite the existence of a much quicker, and more accurate, technical solution. This officer has been extremely successful in generating business year-over-year. Although his antiquated preference is an annoyance to those in finance and bookkeeping, it is not a major risk to the company. They have resigned themselves to tolerating this inefficiency until he retires, at which time they can transition to more modern methods.

Business Performance: These are practices that impact business performance but are neither illegal nor a violation of regulatory or compliance statutes. Such issues should be escalated only if they are of high impact to the company. Examples would include:

  • Using a supplier because of their relationship with management, even though they are more expensive and do not provide greater quality than other potential suppliers.
  • Maintaining a poorly performing employee because he/she has a friendship or long-time relationship with someone in senior management.
  • Excessive breakage of inventory due to flaws in the quality control process.

Business Risk: When an issue surfaces that may put the business at risk, it is clearly worthy of elevation to the appropriate internal authorities. Such issues include fraud, regulatory and compliance violations, health and safety vulnerabilities, workplace inappropriateness, and product problems. There are numerous examples of companies skirting federal regulations in an attempt to cut costs and accelerate sales. When leaders spot illegal practices within their companies, they have an ethical responsibility to reveal them. These issues are clear-cut: they are black or white, right or wrong. To know that they exist but not reveal them amounts to complicity.

Raising an issue to management is one of the more uncomfortable conversations you can have in business. No one wants to be the bearer of bad news, after all. The Continuum of Accountability can help you identify which issues must be escalated, and which need not be.

THE TAKEAWAY: Not all issues can (or should) be solved. Placing the issues at hand onto the Continuum of Accountability can help you take stock of what must be escalated and what is better left unsaid.

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