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

Leadership The ability to positively influence people and systems under one’s authority to have a meaningful impact and achieve important results MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Strategic Planning The process of envisioning an organization’s future and developing the necessary goals, objectives, and action plans to achieve that future. MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

The Baldrige “Leadership Triad” Strategic Planning Operations Leadership Customer and Market Focus MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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 MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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

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

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

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

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

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

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

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

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

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

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

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 MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Key Steps in Developing a Mission Have each person think about the team, its core purpose, reason for existence, methods, strategic/long-term function. Write down key words, figures, phrases or diagrams that communicate the essence of the core purpose; each person does this individually. Collect these ideas on a flip-chart in round robin fashion. Combine and clarify to identify only items which stand alone. Do priority ranking. Discuss criteria for rankings to get sense of what is valued and why. Each person writes a brief mission statement using the key ideas. Read all statements aloud. Discuss the draft statements and pick one to serve as a strawman. Revise as needed. Formally adopt the mission statement. MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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

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

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

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 MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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

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

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

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

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