Are you sure that you are really working on achieving your massive transformation? Are you convinced that your crew is making decisions daily that support the route you want to travel? Do you exactly know where you stand on the journey towards your big why?
Be sure, a lot of the tech businesses out there do not have a clue. I am convinced that this is one of the main reasons why so many organizations lose their initial dreams and become just another money-making-machine that slowly burns through its purpose. This post gives you an idea of what goal accountability is and how to give it a go in your purposeful tech business.
What is goal accountability?
In general business terminology, accountability is the obligation that an individual or an organization takes to be answerable to its actions and progress on a certain topic. Elaborating on this definition gives that “goal accountability” means being answerable to the progress you make on pursuing your business goal like Big Hairy Audacious Goal (BHAG) or Massive Transformative Purpose (MTP).
But how to be answerable to progress? That means tracking your progress in terms of effect, but also tracking the initiatives you deploy in trying to sort effect in the first place. And most of all, being completely transparent in this tracking.
With accountability comes accounting
Accountability and accounting come from the same business dictionary and it underlines the basis of what goal accountability is: bookkeeping of a sort. The only way to lift your tech business from the level of (internal) marketing into an actual purposeful business is a hard numerical frame of what that purpose is about.
Set a base measurement
This numerical frame begins with a clear vision on what the current state of your purpose target is and what you want to change in that state as a result from your purposeful business.
For example: if you develop technology that has to take part in ending hunger (SDG-02 of the Sustainable Development Goals) a base measurement needs to be connected to the product you are developing within that realm. When you develop an early warning system for crops being lost due to insect swarms, your base measurement is different than when you develop some tools for limiting the food-loss in distribution chains. It might both be about tons of lost food, but the measurement clearly differs from reasons of being lost and thus your baseline is different while your goal is in the same direction.
Set up an accountable way to measure your effect from that baseline
From this baseline you want to improve, that is your basic purpose. But just aiming at ‘improvement’ and judging your effect on gut feel is not enough. A business that sells a dream should be able to account for the exact effect, either to confirm to your clients that you are the real deal or to motivate the same message to your employees.
Dream heavy, build lean, grow fast
The basics of your purpose accounting model are two elements:
- How to measure the effect your business has on your purpose directly?
- How to incorporate the waning or multiplying effect over time?
How to measure your direct effect?
Off course there is no one answer on how to measure, because every business case is different. But in general your approach should be to align your purpose effect with your transactional business effect.
So “when I sell x”, and/or “when I deliver y”, I can safely say that “the effect will always be z“.
This sounds pretty straight forward and in some cases that is true but in others it is a bit larger struggle.
Simple example: when you run a digitization company and your goal is to get rid of paper trails in companies (SDG-15 of the Sustainable Development Goals), the calculation can be done without any arbitrary discussion. You can simply compute the amount of paper that is usually lost in the process(es) you support and based on that you can give an average of trees saved based on the number of business transactions you supported with your technology. Marketing wise you can double down on that by planting one additional tree for every tree you already saved and a simple metric for a sustainable dashboard appears.
Hard example: this accounting becomes harder when the effect is less 1-on-1 transactional. For instance when your firm delivers recruitment software and your underlying purpose is to drive inclusion for all on a global scale (SDG-10 of the Sustainable Development Goals). Your strategy is to use your platforms’ data to create proprietary reports about inclusion and influence public policy with that. You have set yourselves a beautiful but less directly manageable and measurable challenge. In a case like this you will have to start investigating the actual diffusion of your data after download by any interested user. How will it find its way from your server to the influencers you need? When you have this insights you can setup all kinds of methods. For instance you could take the number of global politicians at levels with the proper influence (country parliaments of municipalities) and calculate the number of reads your data diffusion reaches within that group yearly. This can lead to a valid claim on yearly influence. A measurable metric that progresses over time.
Set up an accounting method to administrate the effect to the baseline in the long run
The curve ball in goal accounting is the potential long-term effect. How can you measure, and take into account, an effect that is not consumed in full at the moment you deliver? Let’s progress on that example of the digitization company that solves SDG-15 with taking paper out of company processes. When their purpose is “numbers of trees saved”, the purpose is not met at delivering the digitization project but their goal is met while using the product. So the level of receiving their purpose goal expands over time after having done the ground work. Three ways of measurement can be used.
When their product is a software tool which follows a paid-by-time-period subscription model they can pretty straightforward tie their purpose effect to a subscription period. As long as the client is using their software the effect prolongs.
But when they are a technology consulting firm it becomes harder. They get paid by the hour, or by project, at time of delivery. While the actual purpose accounting can only commence after the delivery is done. How long will the client use your advise and setup? So how long will your effect stay in place? Either agree with the client to a periodical audit on your effect or come up with a write-off model that you apply to all.
Example: A few years ago I ran a consulting firm in Procurement Technology and our BHAG was to touch a billion business transactions a year in becoming more environmentally and/or socially responsible. Measuring this effect at the output our projects was impossible since they generally use our setup for years. We took the average number of transactions (AvgN#) that ran through the processes we touched and with that number we agreed within the firm on a model that looked like this:
- The year of go-live = AvgN# x 50%
- First full year = AvgN# x 100%
- Second full year = AvgN# x 75%
- Third full year = AvgN# x 50%
- Fourth full year = AvgN# x 25%
We made this model based on the average time span that a client company consumed consulting output without altering it.
Do not lose yourself in accuracy, because simplicity and transparency are the key to scale
At my previous example, everyone in our consulting firm knew that the number would never be 100% exactly true to the effect of that year. But the model did make the purpose tangible for everyone, no matter the level of seniority. We could clearly show the trend of our effect. We started to understand that hunting bigger clients helped us expand our reach on our purpose because they made the trend grow. And I guess that is what most tech for good firms are after: making a growing impact to the field they are interested in.
This was a very important lesson for me. Goal accounting is not on the exact minute detail of the effect per se, it is to stay focused on the direction you want to go. Showing that there is an effect you are going after. Simplicity of the key metric is very important, as long as you are transparent on where the numbers come from. Transparency forms trust that you are open to discussion on the fact that the model is arbitrary and simplicity makes it easily communicable. This is the ideal combination to make your purpose scale as trust builds on the core of your brand and simple communication on what you want to achieve helps clients understand you better.
A very important aspect of goal accountability is marketing after all. And there is no shame in saying that as you want to build a successful tech for good business you need to market what you are doing to scale your purpose effect!
Let’s make better tech business
The biggest mistake is when you think that goals will progress by itself
That marketing is very important to keep in mind. Both internally and externally people want numbers to assess work.
When you do not give your employees a clear target to track on a daily basis, all that is left is checking the money earned. Eventually this leads to the purpose being there in name only. This means the feeling of why someone works at your company starts to wane and slowly you become just another business that is handing our bonusses just for the right profit.
Your customers are just the same. When they do not understand the effect your say you want to have on the world, they will automatically block it out for a large part and see you as just another company wanting to make money. This means that while selecting your product or service they will measure you in straight competition with other players. This means you will not get the advantage your actual work serves you right.
Bottom line: being able to measure your purpose effect, your BHAG, your MTP, against clean simple metrics helps you scale that same effect, internally and externally, bringing you more clients and a motivated workforce.