Cases from the MBA and the Vanguard · MBA module — when responsibility expands faster than mandate, recognition and executive ownership
Subtitle: When responsibility expands faster than mandate, recognition, and executive ownership
Daniel was a middle manager in the finance function of a large company operating in a volatile and demanding market. Formally, his role was to manage a team, ensure that the department delivered its operational responsibilities, and provide expert support in financing, liquidity management and financial risk.
In practice, the role had become much broader.
On a typical day, Daniel operated on three different levels. First, he managed his team: allocating work, reviewing outputs, solving operational problems, coaching employees and ensuring deadlines were met. Second, he continued to perform specialist work himself, particularly in areas where technical knowledge was concentrated in only a few people. Third, he increasingly handled issues that had consequences extending far beyond the normal scope of a middle-management position.
These issues included maintaining sufficient company liquidity, securing and renewing financing sources, negotiating with banks, monitoring financial risk and ensuring that funding constraints did not disrupt the company’s ability to operate. In some situations, liquidity directly affected the company’s ability to purchase goods and maintain stable supply.
The decisions therefore had consequences not only for Finance, but potentially for sales, operations and the wider business.
Yet there had never been a formal decision that transferred this level of responsibility to Daniel.
The responsibilities accumulated gradually.
A senior executive would ask him to analyse an issue. The analysis would lead to a recommendation. Because Daniel knew the subject better than anyone else involved, the recommendation would often become an expectation that he should decide what to do next.
Over time, the distinction between advising management and effectively making management decisions became blurred.
When the outcome was positive, this rarely created a problem. The financing was secured. Liquidity remained stable. Operations continued. The company avoided disruption.
The success became part of normal business.
When the decision involved significant uncertainty, however, the situation changed.
Senior management might discuss the issue with Daniel, ask for his assessment and challenge his assumptions. But when it came to the final decision, the conversation could end with statements such as:
“You know this topic best.”
“Use your judgement.”
“You are responsible for this area.”
In theory, this sounded like empowerment.
In practice, Daniel increasingly felt that the organization had developed a different model: decision-making was delegated downward, but executive accountability was not always delegated with the same clarity.
If the decision worked, it confirmed that the organization had handled the situation well.
If it did not, attention could quickly shift to who had made the recommendation or taken the decision.
Daniel therefore carried a growing amount of decision risk.
This raised a question that was becoming increasingly difficult to ignore: What exactly was he accountable for?
He accepted that a manager should not hide behind job descriptions. Business conditions often require people to step outside formal boundaries. Senior employees are expected to show initiative, solve problems and protect the company when circumstances demand it.
But there was a difference between taking initiative and becoming the final risk owner.
For example, securing short-term liquidity required more than technical financial analysis. Choosing one source of funding over another could affect interest cost, covenant exposure, available collateral, relationships with banks and future financing flexibility.
Similarly, decisions about the timing and amount of financing could influence whether sufficient funds were available to secure supply. In a difficult market environment, the wrong decision could have direct operational and commercial consequences.
Daniel could analyse these risks.
He could recommend an option.
But should he be the person ultimately accountable for them?
The organizational structure provided no completely clear answer.
Formally, major financial decisions belonged to senior management. In practice, executives relied heavily on the specialists who understood the issues in detail.
This was understandable. A chief executive or senior finance executive could not personally analyse every liquidity projection, bank proposal or operational cash-flow risk.
But Daniel began to see an important difference between delegating analysis and delegating accountability.
If an executive asked a specialist to prepare the facts and recommend an option, the executive could still own the final decision.
If the executive instead said, “You decide,” the responsibility moved downward.
But what moved with it?
Daniel’s compensation had not materially changed.
His formal organizational level had not changed.
His authority over wider company decisions remained limited.
He could be responsible for ensuring liquidity, but he could not independently control many of the factors that determined liquidity. Sales volumes, payment terms, purchasing decisions, inventory, capital expenditure and other cash-flow drivers were controlled by other functions and ultimately by senior management.
This created a structural problem.
Daniel could be held accountable for an outcome over which he had significant influence but incomplete control.
At the same time, the more reliable he became, the more responsibility appeared to move toward him.
His ability to solve problems created a paradox.
Every time Daniel successfully handled an issue beyond the traditional boundaries of his position, the organization became more comfortable assigning similar issues to him in the future.
Competence expanded expectations.
But authority, recognition and incentives did not expand at the same pace.
Daniel also noticed the same dynamic among other capable middle managers.
The people who consistently delivered were often given additional work because management trusted them to handle it. Those who were less reliable sometimes carried less responsibility precisely because assigning important tasks to them created greater risk.
This created an unintended incentive.
High performers were rewarded with more responsibility.
Average performers were often protected from it.
In theory, additional responsibility could be viewed as development and preparation for senior leadership.
Daniel was not opposed to this interpretation.
He wanted to grow professionally and understood that no one moves into senior management by doing only what is written in a job description.
But development normally implied some form of progression: broader authority, greater visibility, stronger incentives, promotion potential or explicit recognition that the individual was operating at a higher level.
Without those elements, the same situation could be interpreted differently.
It could simply be an efficient way for an organization to move difficult work downward while keeping formal authority and rewards unchanged.
There was also a personal risk.
Daniel knew that refusing responsibility could damage his reputation.
If he responded to a difficult issue by saying, “This is an executive decision,” management might see him as cautious, bureaucratic or unwilling to take ownership.
At the same time, continuing to accept every difficult decision could gradually redefine his role without any formal discussion.
The problem was therefore not whether Daniel was willing to take responsibility.
He was.
The problem was determining which responsibility reasonably belonged to him, and what conditions should accompany it.
He considered several options.
He could continue operating as he had. This would protect business continuity, maintain his reputation as a reliable manager and give him exposure to senior-level issues.
But it would also reinforce the existing model.
He could begin escalating major decisions more explicitly, presenting management with alternatives and recommendations while insisting that the final decision be documented at executive level.
That could clarify accountability, but it might be interpreted as defensive behaviour.
A third option was to ask for formal recognition of the role he was already performing: broader authority, clearer decision rights, revised responsibilities and possibly additional compensation.
But this carried another risk. If management believed these tasks were simply part of what was expected from a strong manager, the request could be seen as overly transactional.
There was also a more fundamental question.
Was Daniel facing an organizational problem, or simply the reality of leadership?
Senior positions rarely come with perfect authority. Executives themselves make decisions based on incomplete information and depend on specialists. Perhaps accepting ambiguity and risk was exactly what distinguished future senior leaders from technical managers.
On the other hand, if organizations systematically separate decision accountability from authority and reward, they may eventually discourage their strongest managers from taking initiative.
Daniel had reached the point where the distinction mattered.
Another significant financing decision was approaching.
The issue was technically complex, commercially important and exposed to factors that no single person could fully control.
Management would expect his recommendation.
Based on previous experience, Daniel suspected they might also expect him to make the final call.
This time, he was no longer certain that accepting the decision without clarifying accountability was the right thing to do.
I would open the discussion by asking the group to define three terms separately: responsibility, authority and accountability.
I would first ask a CEO or senior executive whether they consider Daniel’s situation normal delegation or an inappropriate transfer of executive risk. I would then ask a middle manager whether, in practice, they would feel comfortable refusing to make the decision.
The fact most likely to change the room’s answer would be whether Daniel has formal authority to control the key variables influencing the outcome and whether his role, incentives and career progression recognize the level of risk he is being asked to carry.
If the answer is yes, the situation may represent genuine empowerment and leadership development.
If the answer is no, the same arrangement may look much more like accountability without authority.
Modern organizations increasingly want decisions to move closer to expertise. Hierarchical approval structures can be slow, and executives cannot personally own every operational choice. Giving capable managers greater decision rights can therefore improve speed, resilience and execution.
But decentralization works only when accountability architecture evolves with it. If decision-making moves downward while formal authority, incentives and risk protection remain concentrated at the top, empowerment can become indistinguishable from risk transfer. The next-generation organization may therefore need to define not only who performs the work, but who owns the decision, who controls the relevant variables, who carries the downside and who participates in the upside.
Responsibility can be delegated quickly; authority and accountability must move with it if delegation is to become genuine leadership rather than transferred risk.
A live case: every round can be improved, and the author's feedback is the next one.
The same two questions, answered twice: first without the mentor's corpus, then from it — both volumes of Vanguard Leadership, the mentor's decision doctrine and catalog, and his task-to-agent protocol.
Without the mentor's corpus
1. Draw it at the D. Bain's Paul Rogers and Marcia Blenko gave every decision five roles (recommend, agree, perform, input, decide) and one rule: exactly one person holds the D. Daniel is asked to recommend and then, informally, to decide, while the formal D stays with management. That is the line being crossed. Delegation is appropriate when three things move together: the decision right, the control of the variables that drive the outcome, and the consequences, good and bad. Daniel influences liquidity, but sales volumes, payment terms, purchasing and capital expenditure belong to others. So below a threshold set in writing, he should own financing decisions outright; above it, he recommends and an executive signs. In finance this is not exotic: a board-approved treasury policy with approval limits by amount, instrument and counterparty is standard practice. If none exists, that is the gap, not Daniel. Ask yourself: for our three biggest recurring decisions, who holds the D, on paper?
2. None of the three, as posed:
I would use the approaching financing decision to change the model without asking for anything personal. Bring the recommendation as always, with two alternatives and their risks, and ask for the approval in writing: "I recommend option B; the CFO approves." Alongside it, propose a one-page decision-rights note that protects the company: what Daniel decides alone below a limit, what he recommends above it, and who stands in for him when he is away. Elliott Jaques measured the level of a role by its time-span of discretion, the longest stretch a person works on their own judgment without review, and found that people's sense of fair pay tracks it closely. Financing with multi-year covenants carries an executive time-span. Once the note exists, the conversation about title and pay rests on a document, not a favour. Ask yourself: what would this company lose if I left tomorrow, and does anyone else know it?
Sources: P. Rogers and M. Blenko, "Who Has the D? How Clear Decision Roles Enhance Organizational Performance", Harvard Business Review, January 2006; E. Jaques, the time-span of discretion (Measurement of Responsibility, 1956).
From the mentor's corpus
1. The mentor's field research, in his second volume, reached a blunt conclusion: delegation is not inherently good. It becomes good only when intent is clear, boundaries are visible, accountability is real, and follow-up exists. "Use your judgement" carries none of the four. The Command Layer chapter draws the line itself: the subordinate answers for the action, and the commander answers for the intent, the boundary conditions and the authorisation, with both on the record. So the boundary does not depend on how important the decision is. It depends on whether an executive has written down three things:
Where those exist, Daniel's call is delegation. Where they do not, the doctrine is turned upside down: consequences pushed to the edge, credit kept at the centre. The mentor's decision catalog gives the fix a form: every recurring decision gets an owner, inputs, models, guardrails and an escalation path. Ask yourself: which of the decisions I make every month has never been written down as mine?
2. The mentor's first volume describes Daniel's successes exactly. They are invisible wins: crises prevented, which no quarterly report captures and no bonus algorithm triggers. Invisible wins are the most valuable and the least rewarded, so waiting will not get them recognised. The mentor's decision doctrine gives Daniel a better argument than fairness. Its first axiom is that a system which depends on one permanently trustworthy guardian is badly designed. The company's liquidity now rests on one reliable person. That is a design flaw, and raising it is not defensive behaviour; it protects the firm. So he should follow the mentor's advice to the author of chapter 38: do not be the opposition, and bring the one signal that lets the insight become theirs. Before the next financing decision, he asks the CFO privately: "If I were unavailable for three months, who would decide this?" The decision-rights note, the deputy and in time the title then follow from the answer, not from a request. Ask yourself: am I asking for recognition, or showing them a risk they have not seen?
On the NEO Turn. The case ends with four questions for the next-generation organisation: who owns the decision, who controls the variables, who carries the downside and who shares the upside. The mentor already asks them of AI agents. His task-to-agent protocol will not let an agent run without a charter that states:
A company that writes that page for its software and not for its best managers gives its agents more clarity than its people. Give Daniel the same page.
Sources: Vanguard Leadership, vol. 2, the chapter on the field evidence (the conditions of delegation) and the Command Layer; the mentor's Vanguard Leadership framework paper (the decision catalog); Vanguard Leadership, vol. 1, "The Invisible Wins"; the mentor's decision doctrine of 22 August 2026 (the single guardian); chapter 38 of this book; the Vanguard Task-to-Agent Mapping Protocol (the Agent Charter).
The mentor's first volume uses Haier as its concrete example of the opposite of Daniel's company. Under Zhang Ruimin, Haier broke itself into some 4,000 micro-enterprises of ten to fifteen people. Each unit:
In Zhang's words, they are paid not by the company but by the users. Decision, accountability and reward travel together, as one package. That answers the first question. Delegation is genuine when the three travel together. When only the decision travels, it is risk transfer.
The book also explains why the model works, and each reason names something Daniel's company lacks:
"Without these virtues embedded in the architecture," the book says, "the system would collapse."
For the second question, Haier gives Daniel a better request than a raise: an internal contract. The mentor's case study describes the valuation adjustment mechanism, which sets each unit's expected results in advance, and the win-win value-added statement, which measures what each unit creates. Daniel can propose the same for his role before the next financing decision:
That is not transactional. It is the contract that makes the delegation real.
The first volume also sets every leader a test: how many people can execute on your intent without direct oversight? Daniel's executives can count him. The question for them is whether they have built the architecture that makes that trust safe, or have only found a reliable person to carry the risk.
Ask yourself: if my role were a micro-enterprise tomorrow, what would its contract say, and who would sign it?
Sources: Vanguard Leadership, vol. 1, §2.3 (Haier and the virtue-based architecture) and §2.4 (the orchestration test); the mentor's case study Haier's Rendanheyi Model: Business Case Analysis of Leadership Innovation for the NEO Era; the mentor's case notes on Haier's micro-enterprises.
A question for the table, a disagreement, what you would have done. The case lead reads every comment; the ones the table takes up enter the chapter as questions from the room, with your name.