The Accountability Paradox
How Flexibility Fixed Performance Management
Here's a stat that'll make any CEO's day: What if I told you there's a proven way to cut unwanted turnover in half while doubling your performance-based departures—and your remaining employees will actually thank you for it?
That's exactly what happened when Eric Severson implemented Results-Only Work Environment (ROWE) at Gap and later at Neiman Marcus. But here's the twist that most leaders miss: the secret wasn't the flexibility itself. It was pairing that freedom with ruthless accountability for results.
Neiman Marcus associates, circa 2022
When Accountability Actually Works
"The concept was you get to choose when and where and how you work within a certain set of very wide guardrails," Severson explains. "But managers get absolute freedom to hold employees strictly accountable for results."
The results were immediate and dramatic. Within six months of each implementation, unwanted voluntary turnover dropped by 50% or more. But here's where it gets interesting—and where most companies implementing flexible work policies miss the mark entirely.
"Your involuntary [turnover] will double or triple," Severson recalls being told by Best Buy, the originators of ROWE. "I was like, what? And we did it. That's exactly what happened."
Before you panic, remember we're talking about moving from roughly 2% to 6% of your workforce—but the impact on everyone else was transformative.
The Hidden Boost to Team Performance
What Severson discovered aligns perfectly with decades of research on motivation. As Daniel Pink outlined in Drive, people are motivated by autonomy, mastery, and purpose—not micromanagement and face time. But there's a crucial element most organizations overlook: psychological safety requires accountability, not just empowerment.
"Once you've told managers you no longer have to evaluate people based on work ethic, you get to hold them accountable just for what they could have done," Severson explains. "Suddenly, all these people seemed to pop up who hadn't really been contributing for years, but they were always showing up, and suddenly they were getting exited."
Here's the part that should get every leader's attention: the remaining employees loved it.
"It was a very positive thing for the rest of the workforce, because everybody knew that there were these people who weren't doing anything, but they knew how to look busy," Severson notes. Your high performers have been watching the office politicians and meeting marathoners get rewarded while doing the real work. When you finally address that imbalance, engagement soars.
Eric Severson; Neiman Marcus associates
Ditching the Performance Review Theater
The transformation went deeper than just removing underperformers. Severson realized that traditional performance reviews were actually working against the outcomes-based culture they were trying to build.
"I've been trying to get rid of [traditional performance reviews] since about 2006 when I read Carol Dweck's book, Mindset," he shares. The breakthrough moment came when his CEO walked into his office in February and asked, "Where is everybody?" The answer: home writing their annual reviews.
"He got it: it's so much work to write these things. I had already said that several years earlier."
Instead of the annual review ritual, they implemented what Gap called "GPS" (Grow Perform Succeed): quarterly goal-setting conversations focused on regularly repositioning priorities based on changing business needs. Teams began self-organizing around actual business requirements rather than artificial office hours, with some employees naturally taking late shifts to support stores across time zones.
Not being worried about “face time” with the bosses’ boss meant people could shift their schedules to times that were better for themselves personally, and also better for stores they supported: a real win-win for employees and the organization.
But here's the critical piece most organizations miss: they held managers accountable for having these conversations. "We would survey when they took their quarterly engagement survey. Did you have your GPS conversation last quarter? If so, rate on a scale of one to five, how effective it was," Severson explains – even Eric’s own team had to step up.
The Implementation Reality Check
Before you start planning your own outcomes-based management rollout, remember Severson's key insight: "You have to pilot it, and you have to measure everything." He measured business metrics, people metrics, and cross-functional service levels—proving that the business performance wasn’t harmed (in fact it improved) while showing significant improvements in talent outcomes.
The pilot approach also helped overcome leadership resistance. Too often, leaders have blinders on, driven by a combination of anxiety (“are they working hard enough?”), pressure to perform and their own experience. Piloting and measurement are critical to any sizable change in how teams work.
When Severson brought a similar approach to Neiman Marcus Group, they broadened their perspective. NMG Way of Working (or NMG WOW) went well beyond “where” to how people were expected to work. For example, a “work smarter” pillar asking associates to not only deliver individual results but also to raise ideas to reduce waste and friction that gets in the way of teams.
In organizations where employees feel that visibility and “sucking up to the boss” determine success, those expectations would fall flat; we’ve all seen the “why bother” attitude in some big companies. But addressing low performers and rewarding better outcomes made it realistic at NMG.
Real World Results
NMG’s leadership didn’t put this program in place because they were soft-hearted and wanted to go to extremes of employee happiness. They wanted to dramatically improve performance in the organization and drive profitability–and they succeeded:
Store associate retention rates of 75% were the inverse of the industry average, and drove higher profitability: higher productivity and lower replacement costs.
Time-to-hire costs for frontline associates fell dramatically, saving recruiting costs and lowering sales losses from a lack of coverage.
“HQ” staff were now hired across the country, leading to lower costs than competitors found in locations like New York City and Seattle, and had very high retention – even during M&A.
Too often, executives have blinders on to new ways of working and mistake programs like NMG WOW as being “soft” on employees. But Severson and team demonstrated that human-centered leadership isn’t “soft.” They were demanding, while also being supportive. They held high standards, and held themselves and their teams to those standards first and foremost – not just those on the frontline.
The Bottom Line
Most discussions about workplace flexibility focus on employee satisfaction or work-life balance. But Severson's experience reveals something more fundamental: when you pair radical flexibility with clear accountability for results, you don't just make work more humane—you make it more effective.
The accountability paradox is this: the more freedom you give people to control how they work, the more willing they become to be held accountable for what they achieve. Your best people have been waiting for this trade-off their entire careers.
While some CEOs are defaulting back to monitoring where people sit, the real opportunity is building the accountability systems that make management-through-monitoring obsolete.
The question isn't whether your organization can afford to implement outcomes-based management. It's whether you can afford not to—especially when your competitors start reaping the benefits of a workforce that's both empowered and accountable.
What's stopping you from piloting this approach with one team for six months?
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Sophie Wade and I dig into the misconceptions around human-centered leadership, rooted in data (of course!) and centered on five lessons we hope some of them take to heart — or get why they help their wallet at a minimum. It’s my latest for MIT Sloan Management Review, let me know what you think!
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A great read. Flexibility shouldn’t be viewed as a perk but as a performance strategy. When done right, it unlocks better outcomes for people and the business.
Another great post as always Brian. I actually saw your MIT article - it popped up on my Google feed the other day. I have it bookmark to read. So cool!