10 Tips To Get Managers Accountable For Cost
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Getting anyone to be accountable for profit or loss (P&L) can be troublesome – all too often meeting the requirements of the customer at all costs can cause significant problems. All companies need to make money and as a result all employers, managers included, should be cost aware.
1. Create a culture where costs are seen as important. This may sound obvious, but you do need to ensure that costs are seen as being the responsibility of everyone, that everyone needs to pull together to try and keep costs down. So get everyone aware of costs.
2. It is also important to make managers aware of what the implications are if they do not become accountable for costs. If there are negative possible implications then tell managers. Paint the whole picture so that they can be fully aware of what will happen if they don’t become accountable.
3. Set out clear results that you want to see achieved. There is no point in telling managers afterwards what you wanted them to achieve. Tell them upfront and set goals that you want to be met. If you want to see costs reduced by 10% over a year, then this is the goal that should be set.
4. However, it is also very important to ensure that you set clear goals that can be achieved. If the goals that you set are unachievable, then you are asking managers to become accountable for the impossible and this is not a good way of treating any employees. So set clear and achievable goals.
5. Now you need to establish a culture that is based on ‘joint accountability’ this means that the manager or any team member cannot be seen to have performed adequately if the team does not achieve its results. Ensure staff are equipped with how to generate teamwork and ensure that departments rather than individuals are working towards budgets and financial targets. So if the 10% reduction is not achieved then the management and all the employees have failed and they need to be aware that this is the culture in which they operate.
6. One way of reinforcing the culture of accountability is to keep reminding managers that they are accountable and check how progress is going with regard to ensuring that costs are being kept manageable and that managers are ‘on track’ with regard to being accountable for costs.
7. Do not indulge in playing the ‘blame game’ because this will simply ensure that you create a culture of fear and this will not be conducive to a positive working environment. Managers who operate within a culture of fear will simply pass this on to their staff and the workplace becomes a difficult place for everyone!
8. Try to provide positive incentives and use the carrot and not a stick to get results. These incentives could take the form of bonuses, an extra day off work and so on. They do not have to be massive, but they can act as an incentive, so that accountability becomes more appealing. However, it is important to bear in mind that you are dealing with managers, so they should have some degree of accountability anyway!
9. Remember that you have to take managers with you. This is different from them just going through the motions. They have to be fully committed to the process of being accountable for costs, so if necessary invest in training for them.
10. Finally keep reviewing progress and identify any areas that are ‘weak’ before they present a significant problem. This will give managers the opportunity to address problems on a regular basis and eventually they will be able to ensure that these problems are eliminated and that costs will be kept down and kept manageable.