1. Leadership and Strategic Planning
Chapter 5
Leadership and
Strategic
Planning
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

2. Leadership
The ability to positively influence people and systems under one’s authority to have a meaningful impact and achieve important results
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3. Strategic Planning
The process of envisioning an organization’s future and developing the necessary goals, objectives, and action plans to achieve that future.
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4. The Baldrige “Leadership Triad”
Strategic
Planning
Operations
Leadership
Customer and
Market Focus
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

5. Executive Leadership Defining and communicating business directions
Ensuring that goals and expectations are met
Reviewing business performance and taking appropriate action
Creating an enjoyable work environment
Soliciting input and feedback from customers
Ensuring that employees are effective contributors
Motivating, inspiring, and energizing employees
Recognizing employee contributions
Providing honest feedback
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6. Key Idea
Six key leadership competencies can be described as navigator, communicator, mentor, learner, builder, and motivator.
Dale Crownover, President, Texas Nameplate Co. (a 2-time Baldrige Award recipient)
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

7. Leadership Competencies
Navigator—creates shared meaning and provides direction toward a vision,mission, goal, or end-result.
Communicator—effectively listens and articulates messages to provide shared meaning.
Mentor—provides others with a role to guide their actions.
Learner—continuously develops personal knowledge, skills, and abilities through formal study, experience, reflection, and recreation.
Builder—shapes processes and structures to allow for the achievement of goals and outcomes.
Motivator—influences others to take action in a desirable manner.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

8. Leading Practices – Leadership (1 of 2)
Create and deploy a customer-focused strategic vision and clear quality values
Create a sustainable organization and environment for performance improvement, accomplishment of the mission, innovation, agility, and learning
Demonstrate personal commitment to organizational values, develop future leaders, and reinforce high performance
Create a focus on action and communicate with, empower, and motivate all employees
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

9. Leading Practices – Leadership (2 of 2)
Address organizational governance to include management and fiscal accountability, protection of stakeholder interests, and conduct evaluations to improve the leadership system
Create an environment that fosters legal and ethical behavior
Integrate public responsibilities, resource-sustaining processes, and community support into business practices
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

10. Key Idea
The purpose of leadership theories is to explain differences in leadership styles and contexts.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

11. Leadership Theories Classic theories:
Trait approach
Behavioral approach
Role approach
Contemporary and emerging theories:
Situational leadership
Transactional leadership theory
Transformational leadership theory
Substitutes for leadership theory
Emotional intelligence theory
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12. Key Idea
Emerging leadership theories build on or enlarge traditional theory by attempting to answer questions raised, but not answered, by earlier approaches.
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13. Leadership System
Leadership system – how decisions are made, communicated, and carried out at all levels; mechanisms for leadership development, self-examination, and improvement
Effectiveness of the leadership system depends in part on its organizational structure
CRI Steering committee of 4
sets directions, frequent interaction with employees, review performance daily, formal monthly evaluations and OFIs
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14. Key Idea
An effective leadership system respects the capabilities and requirements of employees and other stakeholders, and sets high expectations for performance and performance improvements.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

15. Example: Solar Turbines, Inc.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

16. Governance
Governance – the system of management and controls exercised in the stewardship of an organization.
Approving strategic direction
Monitoring and evaluating CEO performance
Succession planning
Financial auditing
Executive compensation
Disclosure
Shareholder reporting
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

17. Leadership and Social Responsibilities
Ethics
Health, safety, and environment
Community support
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

18. Key Idea
Practicing good citizenship refers to leadership and support — within the limits of an organization’s resources — of publicly important purposes, including improving education, community health, environmental excellence, resource conservation, community service, and professional practices.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

19. Strategic Planning
“A strategy is a pattern or plan that integrates an organization’s major goals, policies, and action sequences into a cohesive whole.”
Formal strategy includes:
Goals to be achieved
Policies to guide or limit action
Action sequences, or programs, that accomplish the goals
Do the “point north” thing
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

20. Leading Practices - Strategic Planning
Systematic planning systems for strategy development and deployment
Understand the competitive environment and the factors and strategic challenges that determine success, and gather and analyze a variety of external and internal data
Align short-term action plans with long-term strategic objectives, communicate them, and track progress
Derive human resource plans from strategic objectives and action plans
Identify key measures and indicators for tracking progress, reinforce organizational alignment, and compare performance with competitors
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

21. Strategic Planning Process
Reason for existence
Future intent
Attitudes and policies
Mission
Vision
Guiding Principles
Environmental assessment
Capabilities and risks
Broad statements of direction
Strategies
Things to change or improve
Strategic Objectives
Action Plans
Implementation
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

22. Mission
Definition of products and services, markets, customer needs, and distinctive competencies
Solectron: “…to provide worldwide responsiveness to our customers by offering the highest quality, lowest total cost, customized, integrated, design, supply chain, and manufacturing solutions through long-term partnerships based on integrity and ethical business practices.”
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

23. Vision Where the organization is headed and what it intends to be
Brief and memorable - grab attention
Inspiring and challenging - creates excitement
Descriptive of an ideal state - provides guidance
Appealing to all stakeholders - employees can identify with
Solectron: “Be the best and continuously improve”
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

24. Values (Guiding Principles)
Define attitudes and policies for all employees, which are reinforced through conscious and subconscious behavior at all levels of the organization.
Alcoa: integrity, environmental health and safety, customer, excellence, people, profitability, accountability
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25. Environmental Assessment
Customer and market requirements, expectations, and opportunities
Technological and other innovations
Organizational strengths and weaknesses
Financial, societal, ethical, regulatory and other potential risks
Changes in global or national economy
Factors unique to the organization, such as partner and supply chain needs
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

26. Key Idea
Strategies are broad statements that set the direction for the organization to take in realizing its mission and vision.
Strategic objectives are what an organization must change or improve to remain or become competitive.
Action plans are things that an organization must do to achieve its strategic objectives.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

27. Strategy Deployment
Developing detailed action plans, defining resource requirements and performance measures, and aligning work unit, supplier, or partner plans with overall strategic objectives.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

28. Policy Deployment (Hoshin Kanri)
Top management vision leading to long-term objectives
Deployment through annual objectives and action plans
Negotiation for short-term objectives and resources (catchball)
Periodic reviews
See Figure 5.5!
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

29. Key Idea
Strategic objectives and action plans often require significant changes in human resource requirements, such as redesigning the work organization or jobs to increase employee empowerment and decision making, promoting greater labor/management cooperation, modifying compensation and recognition systems, or developing new education and training initiatives.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

30. Link Human Resource Plans and Business Strategy
Examples
Redesign work organization to increase empowerment
Promote greater labor/management cooperation
Foster knowledge sharing and organizational learning
Establish partnerships with education to better prepare future employees
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

31. The Seven Management and Planning Tools
Affinity diagrams
Interrelationship digraphs
Tree diagrams
Matrix diagrams
Matrix data analysis
Process decision program charts
Arrow diagrams
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

32. Leadership and Organizational Structure
Basic types of organizational structures
Line organization
Line and staff organization
Matrix organization
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33. Key Idea
As more and more companies accept the process view of organizations, they are structuring the quality organization around functional or cross-functional teams.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

34. Team-Based Organization Chart
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

35. Leadership in the Baldrige Criteria
The Leadership Category examines how an organization’s senior leaders address values, directions, and performance expectations, as well as a focus on customers and other stakeholders, empowerment, innovation, and learning. Also examined is the organization’s governance and how the organization addresses its public and community responsibilities.
1.1 Senior Leadership
a. Vision and Values
b. Communication and Organizational Performance
1.2 Governance and Social Responsibilities
a. Organizational Governance
b. Legal and Ethical Behavior
c. Support of Key Communities
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

36. Strategic Planning in the Baldrige Criteria
The Strategic Planning Category examines how an organization develops strategic objectives and action plans. Also examined are how chosen strategic objectives and action plans are deployed and how progress is measured.
2.1 Strategy Development
a. Strategy Development Process
b. Strategic Objectives
2.2 Strategy Deployment
a. Action Plan Development and Deployment
b. Performance Projection
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing