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Chapter 5
Leadership and
Strategic
Planning
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
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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
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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
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The Baldrige “Leadership
Triad”
Strategic
Planning
Operations
Leadership
Customer and
Market Focus
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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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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
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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, resourcesustaining processes, and community
support into business practices
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
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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
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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
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Leadership and Social
Responsibilities
 Ethics
 Health,
safety, and environment
 Community support
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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
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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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
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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
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Strategic Planning Process
Reason for existence Future intent
Mission
Vision
Attitudes and policies
Guiding Principles
Environmental assessment
Strategies
Broad statements of direction
Strategic Objectives
Action Plans
Capabilities and risks
Things to change or
improve
Implementation
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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
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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”
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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
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Key Steps in Developing a
Mission
1.
Have each person think about the team, its core purpose, reason for
existence, methods, strategic/long-term function.
2.
Write down key words, figures, phrases or diagrams that communicate the
essence of the core purpose; each person does this individually.
3.
Collect these ideas on a flip-chart in round robin fashion.
4.
Combine and clarify to identify only items which stand alone.
5.
Do priority ranking. Discuss criteria for rankings to get sense of what is
valued and why.
6.
Each person writes a brief mission statement using the key ideas.
7.
Read all statements aloud.
8.
Discuss the draft statements and pick one to serve as a strawman.
9.
Revise as needed.
10.
Formally adopt the mission statement.
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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
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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
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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
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Policy Deployment
(Hoshin Kanri)
 Top
management vision leading to longterm 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
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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
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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.
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Team-Based Organization
Chart
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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
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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
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