To better understand responsibility diffusion, consider a one-person business. Quite simply, when something doesn't get done or done correctly, only one person is involved in chain of responsibility. Oh sure, one can try to blame it on bad luck, poor timing, etc - but most likely it can be attributed to poor judgment or poor execution - maybe both! Founders of successful family businesses understand this concept better than anyone because they fight battle of responsibility diffusion on a daily basis.

As business organization grows, excuse mechanisms that cause responsibility diffusion seem to grow even faster! Both Europe and North America are seeing much more emphasis on corporate social responsibility as our largest corporations exhibit some shocking evidence of responsbility diffusion - Enron, Arthur Andersen, World Com, Sunbeam, Im Clone, Investors Overseas, IBM...

Symptoms of responsibility diffusion

Here are some symptoms that could indicate your organization might be infected with responsibility diffusion:

1. When employees routinely do not show up for work on time - is it because of "traffic", problems with car, etc. Or do they admit they did not leave home early enough?

2. When work assignments are not completed on time, do you hear things like: "I would have finished work on time but I had a bunch of phone calls that I had to deal with"; or "There were other fires I had to fight." Or do your people admit they did a poor job of scheduling their time.

3. When you ask why a particular goal or objective was missed, do you get a lot of "its not our fault" reasons why goals were not met. Or does someone admit that perhaps he or she and their people did not work hard enough (or smart enough) to get expected results?

4. When a competitor wins a bid on some business project, did you lose bid because your price was too high; your quality of product or service was higher than what customer wanted to pay; competitor "bought" business. Or does someone admit they failed to do a proper job of salesmanship?

Getting picture? Listen carefully when explanations are being given! Remember old saying that - "success has many parents but failure is always an orphan"?

One of reasons responsibility diffusion is so pervasive is that when something comes off track, assignment of responsibility is often used to embarrass, shame and humiliate individuals.

Management sometimes uses assignment of responsibility like a club to ensure organizational compliance and in doing so they create an organization of lemmings.

I like notion put forth by Henry Ford: "failure is only opportunity to begin again more intelligently".

Family business owners, managers and employees in successful businesses tend to shoulder and incorporate responsibility as part of process of continuous improvement. In this environment, responsibility is considered a positive notion instead of a negative consequence. When using this approach, responsibility diffusion can be minimized and sometimes even eliminated!

Objective Understanding of Business Concurrent to recognizing inter- and intra-generational family issues, to develop consensus in an FOB, it is equally essential to gain an objective understanding of business. From an Operations Management perspective most difficult problem is clearly identifying crucial operational characteristics of business. To be successful, this process should be independently constructed and must be based on operational information, not financial information. The Importance of Objective Measurement Unfortunately, in most family businesses operational characteristics of business are never accurately or objectively described. Key decisions are based not on hard facts but on various "interpretations" of sometimes unrelated circumstances. This is not an unusual phenomenon: Family businesses tend to rely on well-intentioned people, memory, and varying degrees of managerial expertise to reach their business goals and objectives, rather than creating a sound operating system. As an illustration, I often ask family business CEOs to question their senior managers about how much work is accomplished daily in their individual areas of responsibility. If these key managers merely are able to report results, without knowing and measuring labor hours involved, a serious managerial discrepancy exists.

Designing a process for correcting this problem generally can be accomplished within a few days, depending on complexity of operation. Validating operational characteristics of business should be a high priority issue, one that commands immediate attention.

A Three-Legged Stool Building consensus in a family business can be compared to proverbial three-legged stool. There is Senior Generation, Succeeding Generation, and Business. Each "leg" has different needs and issues, and each requires different kinds of expertise to ensure that those needs are met and issues resolved. Unless equal importance and attention is given to each group in a family business, optimum stability will never be realized. Unfortunately for many family businesses, building a harmonious consensus will always remain a dream and never become a reality.