Leadership and Strategic Planning

Leadership The ability to positively influence people and systems under one’s authority to have a meaningful impact and achieve important results

Strategic Planning The process of envisioning an organization’s future and developing the necessary goals, objectives, and action plans to achieve that future.

The Baldrige “Leadership Triad” Strategic Planning Operations Leadership Customer and Market Focus

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

Key Idea Effective leadership requires five core leadership skills: vision, empowerment, intuition, self-understanding, and value congruence. Dale Crownover, President, Texas Nameplate Co.

Leading Practices – Leadership Create a customer-focused strategic vision and clear quality values Create and sustain leadership system and environment for empowerment, innovation, and organizational learning Set high expectations and demonstrate personal commitment and involvement in quality Integrate quality values into daily leadership and management and communicate extensively

Leading Practices – Leadership Review organizational performance Create an environment and governance system that fosters legal and ethical behavior Integrate public responsibilities and community support into business practices

Leadership Theories Trait approach Behavioral approach Contingency (situational) approach

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 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

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

Leadership and Social Responsibilities Ethics Health, safety, and environment Community support

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: Do the “point north” thing Goals to be achieved Policies to guide or limit action Action sequences, or programs, that accomplish the goals

Leading Practices - Strategic Planning Active participation of top management, employees, customers, suppliers Systematic planning systems for strategy development and deployment Use of 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

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 Strategic Objectives Things to change or improve Action Plans Implementation

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.”

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”

Values (Guiding Principles) Define attitudes and policies for all employees, which are reinforced through conscious and subconscious behavior at all levels of the organization. Pepsico: integrity, honesty, teamwork, accountability, balance

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

Strategy Deployment Developing detailed action plans, defining resource requirements and performance measures, and aligning work unit, supplier, or partner plans with overall strategic objectives.

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 5.6!

The Seven Management and Planning Tools Affinity diagrams Interrelationship digraphs Tree diagrams Matrix diagrams Matrix data analysis Process decision program charts Arrow diagrams

Leadership and Organizational Structure Basic types of organizational structures Line organization Line and staff organization Matrix organization