1. Leadership and Strategic Planning
Chapter 5
Leadership and
Strategic Planning

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

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

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

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

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

7. Leading Practices – Leadership (1 of 2)
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

8. Leading Practices – Leadership (2 of 2)
Review organizational performance
Create an environment and governance system that fosters legal and ethical behavior
Integrate public responsibilities and community support into business practices

9. Leadership Theories Trait approach Behavioral approach
Contingency (situational) approach
Role approach
Emerging theories:
Attributional theory
Transactional theory
Transformational leadership theory
Substitutes for leadership theory
Emotional intelligence theory

10. Key Idea
Some of the newer theories, such as attributional, transactional, and emotional intelligence theories, enter the realm of human emotions to explain how good leaders seem to succeed, and where mediocre ones show mixed results or fail to accomplish their goals.

11. 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

12. 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.

13. 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

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

15. 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.

16. 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

17. 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

18. 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

19. 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.”

20. 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”

21. 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

22. 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

23. 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.

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

25. 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!

26. 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.

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

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

29. 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.

30. 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 Organizational Leadership
a. Senior Leadership Direction
b. Organizational Governance
b. Organizational Performance Review
1.2 Social Responsibility
a. Responsibilities to the Public
b. Ethical Behavior
c. Support of Key Communities

31. 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