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Leadership and Strategic Planning This chapter describes the role of leadership and strategic planning for quality

y and performance excellence, with an emphasis on the application of leadership concepts in a total quality (TQ) environment and the process of formulating and implementing TQ-based strategies. Leadership Is the ability to positively influence people and systems under ones authority to have a meaningful impact and achieve important results. Leaders create clear and visible quality values and integrate these values into the organizations strategy. Strategic Planning Is the process of envisioning the organizations future and developing the necessary goals, objectives and action plans to achieve that future. Strategy is the pattern of decisions that determines and reveals a companys goals, policies and plans to meet the needs of its stakeholders. Strategic Planning Through an effective strategy, a business creates a sustainable competitive advantage. The principal role of strategic planning is to align work processes with strategic directions, thereby ensuring that improvement and learning reinforce organizational priorities. Leadership For Quality Despite the countless articles and books written about it, leadership is one of the least understood concepts in business. In practice, the notion of leadership can be as elusive as the notion of quality itself.

When we think of leadership, we generally think of executive leadership, which focuses on the roles of senior managers in guiding an organization to fulfill its mission and meet its goals.

The many activities that senior executives perform include the following: Defining and communicating business directions Ensuring that goals and expectations are met Reviewing business performances and taking appropriate action Creating an enjoyable work environment that promotes creativity, innovation and continual improvement Soliciting input and feedback from customers Ensuring that employees are effective contributors to the business Motivating, inspiring and energizing employees Recognizing employee contributions Providing honest feedback Six Competencies for Leadership 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. Collection of Personal Leadership Characteristics

Accountability Courage Humility Integrity Creativity Perseverance Well-being Good leaders should lead for Quality- that is, they should ensure that the principles of TQ are adopted and used throughout their organizations. Some actions might include the following: Gathering data before expressing an opinion and backing up actions with facts Being aware that quality is defined by customers and acting on that awareness Using quality tools when appropriate and making their benefits visible to all Expecting and driving commitment and accountability throughout the organization Leading Practices for Leadership In firms committed to total quality, various leadership practices share common elements. True leadership promote quality and business performance excellence in several ways:

1. They set a strong organizational vision and values that create and balance value for customers ad other stakeholders, and they deploy them throughout the leadership system and to all employees, suppliers, customers and stakeholders. 2. They create a sustainable organization on an environment for performance improvement, accomplishment of the organizations mission, innovation, agility and organizational and employee learning. 3. They demonstrate substantial personal commitment in the organizations values, participate in the succession planning and development of future organizational leaders and take an active role in reinforcing high performance and a customer and business focus through employee reward and recognition. 4. They create a focus on action to accomplish organizational objectives, improve performance, and attain the vision, and they communicate with, empower and motivate all employees throughout the organization. 5. They address organizational governance to include management accountability, fiscal accountability, independence in audits, and protection of stockholder and stakeholder interests, and they evaluate the performance of senior leaders and the governance board to improve the leadership system. 6. They create an environment that fosters legal and ethical behavior. 7.They integrate public responsibilities, resource-sustaining processes, and community support into their business practices. Leadership Theory and Practice Leadership can be defined as a process by which one individual influences others toward the attainment of goals/ organizational goals.

Leadership involves: People Measurement Control Systems Thousands of leadership studies have been published and thousands of pages on leadership have been written in academic books and journals, businessoriented publications, and general-interest publications. Despite these the exact nature of leadership and its relationship to key variables such as subordinate satisfaction, commitment, and its performance is still uncertain. Thats why a prolific researcher in leadership Fred Luthans said in his book Organizational Behavior (2005) that it (leadership) does remain pretty much of a Black Box or unexplainable. The purpose of leadership theories is to explain differences in leadership styles and contexts. Leadership theory Great man model Pioneer/ developer Ralph Stogdill Type of theory Trait

Ohio State Studies Michigan Studies Theory X-Theory Y Model Managerial Grid Model Leadership effectiveness model Supervisory contingency decision model Situational

E.A. Fleishman, E.A. Harris, et al. Rensis Likert Douglas MacGregor Robert Blake; Jane S. Mouton Ralph Stogdill V.H. Vroom & P.W. Yetton V.H. Vroom & A.G. Jago Hersey and Blanchard

Leader Behavior

Contingency (Situational)

Managerial roles

Henry Mintzberg

Role Approach

Leader-Member Exchange Charismatic Theory Transformational Theory Substitutes for Leadership Emotional Intelligence

George Graen et al. R.J. House; J.A. Conger James M. Burns; N.M. Tichy and D.O. Ulrich; B. M. Bass Jon P. Howell et al. Daniel Goleman et al.

Emerging Theories

Contemporary and Emerging Leadership theories Many of the theories we classify as emerging were proposed in the 1970s and 1980s because adaptation takes decades and new theories have to be tested very well. Situational Leadership offers an insight into the interaction between subordinate ability and leadership style and is taught in many executive seminars. This theory was introduced in 1969 and revised by Hersey and Blanchard in 1977. Subordinate Maturity is defined in terms of the ability of subordinates to accept responsibility for their own task-related behavior. The theory classifies leader behaviors into two (2) broad classes: Task-oriented behaviors Relationship-oriented behaviors

(4) Four Levels of Follower Maturity (Readiness) Unable and Unwilling Unable but Willing Able but Unwilling Able and Willing (4) Four Leadership Styles Directing Coaching Supporting Delegating Transactional Leadership Theory Leaders inspire their subordinates to exert extraordinary effort to achieve organizational goals by giving a reward/punishment. Passive Management giving punishment for every mistake done. Active Management Setting rules to avoid mistake. Transformational Leadership In this theory adopt many behaviors like: Idealized Influence Individualized Consideration Inspirational Motivation Intellectual Stimulation

Leaders who take on a transformational style have: Long-term Perspective Focus on customers Promote a shared Vision and Values Work to Stimulate Their Organization Intellectually Invest in Training Take Some Risks Treat Employees as Individuals

Bass differentiated Transformational Leadership from Transactional Leadership Transformational focuses on the improvements. Transactional Self-interest and maintain of organizational status. Substitute for Leadership Theory provides explanation for the lack of strong empirical support for the relationship between leader behavior and subordinates satisfaction and performance. continuous organizational change and

Newest of the emerging leadership is called the Emotional Intelligence Theory by Goleman He defines 5 (Five) Components of emotionally intelligent leaders 1.) Self-awareness 2.) Self-regulation

3.) Motivation 4.) Empathy 5.) Social Skill Three Types of Challenges Facing Present and Future Management Technical Challenges from the past that leaders and organization faced that built competence in solving Adaptive Current challenge where leadership skills had to be improve or extended and adapted for the new environment. Critical those required to meet discontinuous or crisis conditions never before faced by the leader or organization. Applying leadership theory in a total quality environment Applying leadership in a new hotel start-up using Transformational Leadership Theory. When there is a low leadership effectiveness. (Substitute for Leadership Theory). Business proposals (Emotional Intelligence Theory). CREATING THE LEADERSHIP SYSTEM LEADERSHIP SYSTEM Refers to how leadership is exercised, formally and informally, throughout the organization. Leadership System includes: Structures and mechanisms for decision making Selection and development of leaders and managers Reinforcement of values, directions, and performance expectations Loyalties and teamwork

An effective leadership system respects the capabilities and requirements of employees and other stakeholders and set high expectations for performance and performance improvement ESSENTIAL ELEMENTS Leadership Planning Implementation Review

LEADERSHIP, GOVERNANCE, AND SOCIAL RESPONSIBILITIES JEFFREY R. IMMELT FOUR THINGS TO KEEP THE COMPANY ON TOP: Execution Growth Great People Virtue An important aspect of the leadership system is governance, which refers to the system of management and controls exercised in the stewardship of an organization. Governance processes may include approving strategic direction, monitoring and evaluating CEO performance, succession planning, financial auditing, executive compensation, disclosure, and shareholder reporting The Public Company Accounting Reform an Investor Protection Act of 2002, commonly known as the Sarbanes-Oxley Act The Business Roundtable, a respected group of CEOs from many of the fortune 500 corporations, developed a set of Principle of Corporate Governance to provide guidelines for compliance Practicing good citizenship refers to leadership and support-within the limits of an organizations resources-of publicly important purposes, including improving education, community health, environmental excellence, resource conservation, community service, and professional practices.

STRATEGIC PLANNING Through strategic planning, leaders mold an organizations future and manage change by focusing on an ideal vision of what the organization should and could be three, five, or more years in the future. The objective of strategic planning is to build a posture that is so strong in selective ways that the organization can achieve its goals despite unforeseeable external forces A strategy is a pattern that integrates an organizations major goals, policies, and action sequences into a cohesive whole. A well-formulated strategy helps to marshal and allocate an organizations resources into a unique and viable posture based on its relative internal competencies and short comings, anticipated changes in the environment, and contingent moves by intelligent opponents. LEADING PRACTICES FOR STRATEGIC PLANNING 1. They have systematic planning systems for strategy development and deployment. 2. They understand the competitive environment, the principal factors that determine success, and strategic challenges business, operational, and human resource related associated with organizational stability and gather and analyze relevant data and information pertaining to these factors as part of the strategic planning process. 3. They align short term action plans with long- term strategic objectives and organizational challenges and communicate them throughout the organization. 4. They derive human resource plans from strategic objectives and action plans. 5. They identify key measures or indicators for tracking progress on action plans, ensure that the measurement systems reinforces organizational alignment, and project performance of these key measures compared with competitors or comparable organizations to identify gaps and opportunities.

STRATEGY DEVELOPMENT Henry Mintzberg, an unconventional thinker when it comes to management and organizational structures argued that the competitive success requires strategic thinking by leaders in the organization. STRATEGY DEVELOPMENT Capturing what the manager learns from all sources and then synthesizing that learning into a vision of the direction that the business should pursue. The organizations leaders first explore and agree upon the mission, vision, and guiding principles of the organization, which from the foundation for the strategic plan. MISSION The mission of a firm defines its reason for existence; it answers the question Why are we in business? VISION The vision describes where the organization is headed and what it intends to be, it is a statement of the future that would not happen by itself. GUIDING PRINCIPLES Values or guiding principles, guide the journey to a vision by defining attitudes and policies for all employees, which are reinforced through conscious and subconscious behavior at all levels of the organization. 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. STRATEGY DEPLOYMENT Refers to developing detailed action plans, defining resource requirements and performance measures; and aligning works unit, supplier, or partner plans with overall strategic objectives. THREE INDICATORS OF POOR DEPLOYMENT Lack of alignment across the organization Misallocation of resources Insufficient operational measures

LINKING HUMAN RESOURCE PLANS AND BUSINESS STRATEGY Strategic human resource plans often include one or more of the following: Redesign of the work organization to increase empowerment and decision making or team-based participation Initiatives for promoting greater labor/management cooperation, such as union partnerships Strategic human resource plans often include one or more of the following: Initiatives to foster knowledge sharing and organizational learning Partnerships with educational institutions to help ensure the future supply of well-prepared employees.

The Seven Management and Planning Tools 1. Affinity diagram- a tool for organizing a large number of ideas, opinions, and facts relating to a broad problem or subject area. 2. Interrelationship diagram- a tool for identifying and exploring casual relationships among related concepts or ideas. 3. Tree diagram- a tool to map out the paths and tasks necessary to complete a specific project or reach a specified goal. 4. Matrix diagram- Spreadsheets that graphically display relationships between ideas, activities, or other dimensions in such ways as to provide logical connecting points between each item. 5. Matrix data analysis- a tool to take data and arrange them to display quantitative relationships among variables to make them more easily understood and analyzed. 6. Process decision program chart- a method for mapping out every conceivable event and contingency that can occur when moving from a problem statement to possible solutions. 7. Arrow diagram- a tool for sequencing and scheduling project tasks.

Leadership, Strategy and Organizational Structure Organizational Structure- the clarification of authority, responsibility, reporting lines, and performance standards among individuals at each level of the organization. Traditional organizations tend to develop structures that help them to maintain stability. Organizations in rapidly changing environments characteristic of modern organizations have to build flexibility into their organization structures.

Several Factors Relating to Organization 1. COMPANY OPERATIONAL AND ORGANIZATIONAL GUIDELINES 2. MANAGEMENT STYLE 3. CUSTOMER INFLUENCE 4. COMPANY SIZE 5. DIVERSITY AND COMPLEXITY OF PRODUCT LINE 6. STABILITY OF THE PRODUCT LINE 7. FINANCIAL STABILITY 8. AVAILABILTY OF PERSONNEL THREE BASIC TYPES THE LINE ORGANIZATION -is a functional form, with departments that are responsible for marketing, finance, and operations. THE LINE AND STAFF ORGANIZATION- is the most prevalent type of structure for medium- sized to large firms. MATRIX ORGANIZATION- developed for use in situations where large, complex projects are designed and carried out, such as defense weapons systems or large construction projects. LEADERSHIP SENIOR LEADERSHIP examines how senior leaders guide and sustain an organization by setting and deploying its vision and values; creating an environment

for performance improvement, organizational agility, organizational and employee learning, and legal and ethical behaviour; communicate with, empower, and motivate employees; and create a focus on action to accomplish objectives, improve, and attain the vision. GOVERNANCE AND SOCIAL RESPONSIBILITY address how the organizations governance system address management and fiscal accountability and protection of stakeholder interests; how performance of senior leaders is evaluated; and how senior leader use performance reviews to improve leadership effectiveness and the leadership system. STRATEGIC PLANNING STRATEGY DEVELOPMENT examines an organizations strategic planning process, how it uses key data and information in developing strategies and objectives, and how its strategic objectives address key organizational challenges. STRATEGY DEPLOYMENT looks at how an organization converted strategic objectives into action plans to accomplish the objectives, how resources are allocated, and how changes resulting from action plans are sustained. Six Sigma Leadership is a fundamental value of SIX SIGMA. Driving organizational change to create and sustain a Six Sigma cultural simply cannot be done without strong leadership. Six Sigma cannot be an add- on or a flavor of the month.