Leadership’s Role in Sustaining Excellence

Last week, I was honored to participate in ASQ MN Section’s Executive Roundtable, exploring the role of leaders in creating a culture of quality.  The day-long forum investigated the links between employee engagement, customer focus, measurement and overall enterprise excellence.  Over lunch, I was asked to talk about the role of leaders in creating a culture of quality that leads to high performing outcomes.  In my research, I found about eight things that all leaders must do to ensure and sustain strong organizational results…

The conclusions I offered were based on three independent sources.  I suppose I could have pulled from dozens of sources, but the three were all published this year (so were current), had credibility, and had such tight consistency, I think we can safely draw conclusions.  Before I offer the results, the sources were a 2014 ASQ/Forbes study, a Conference Board CEO Challenge 2014 Study, and the 2014 Baldrige Criteria for Performance Excellence.  I’ll list the main highlights from each, then summarize what I think are the eight common leadership traits across them.

In the ASQ/Forbes study, researchers found that leaders in world class organizations did five things particularly better than those in “average” organizations:

• They clearly articulated a vision for improvement
• They clearly communicated organizational values
• Organizational values were consistently applied (to decision making, reward/recognition, etc.)
• Senior management supported a culture of quality and continuous improvement, and
• Senior management lives the values – they “lead by example.”

Those five areas had the biggest differential between what Forbes/ASQ found as high performing organizations and the overall ratings of all organizations (in other words, “average” organizations).

In addition, the ASQ/Forbes research identified 10 warning signs that an organization has a weak culture of quality.  Said another way, in lower performing organizations, leaders did a poorer job at establishing, nurturing, and sustaining a culture that supports high performance when these things happen:

• The CEO and other senior executives rarely discuss quality—let alone performance against quality objectives
• The company’s quality vision is either non-existent or has minimal linkage to business strategy
• Managers throughout the organization either fail to consistently emphasize quality or are resistant to quality initiatives
• The organization has few if any feedback loops for continuous improvement of processes
• The company lacks formal mechanisms for collecting and analyzing customer feedback
• Metrics used for performance evaluation feature little-to-no mention of quality goals
• Employees are not familiar with the company’s quality vision and values—or perhaps worse, view them as mere slogans
• Training and development do not emphasize quality/improvement
• New hires are not formally introduced to the organization’s quality vision and values
• The organization experiences frequent, though often minor, setbacks owing to inconsistent quality

Similarly, the 2014 Conference Board CEO study found 10 challenge areas facing today’s organizations.  If you reverse the thinking, these challenges – if addressed – also represent ingredients in achieving and sustaining a culture of quality or high performing.  The top five are:

• Human capital – having the right people, trained and competent, motivated and engaged to do high quality work.
• Customer relationships – a strong, systematic focus on customers’ needs that leads to short-term customer satisfaction and longer-term customer engagement (loyalty, advocacy).
• Innovation – a systematic way to make meaningful change to an organization’s products, services, processes, and/or business models that create value for stakeholders.
• Operational excellence – systematically focused on evaluation and improvement of key processes to improve productivity, efficiency, and effectiveness of operations.
• Corporate brand and reputation – protecting and/or leveraging enterprise brand for market awareness, customer engagement, and positive referral.

This study also identified what it called “hot button issues” facing organizations, which presumably also impacts their ability to achieve high performance:

• Big Data
• Economic depression in Europe
• Diversity in leadership ranks
• Current volatility
• Financial instability in China
• Labor relations
• Cyber security
• Volatility in energy markets
• Healthcare benefits
• Activist shareholders/stakeholders

And finally, the Baldrige Criteria for Performance Excellence, which represents validated management practices used by high performing organizations, outlines several best practices in effective leadership:

• Effective leaders set and deploy (and personally demonstrate) vision and values
• Effective leaders demonstrate and create an organizational environment that requires legal and ethical behavior
• Effective leaders encourage frank, two-way communication
• Effective leaders create a focus on action that will achieve the organization’s objectives, improve its performance, enable innovation and intelligent risk taking, and attain its vision
• Effective leaders balance value for customers and stakeholders
• Effective leaders create a sustainable organization by:
  • Creating an environment for the achievement of mission, improvement of organizational performance, performance leadership, and organizational and personal learning
  • Creating a workforce culture that delivers a consistently positive customer experience and fosters customer engagement
  • Creating an environment for innovation and intelligent risk taking, achievement of strategic objectives, and organizational agility, and
  • Participating in succession planning and the development of future leaders

Taken together, the research infers there are some consistent themes in the role leaders play in creating a culture of quality and ensuring high performance within organizations.  In fact, I think these eight cut across those three studies/sources.

Great leaders:

• Lead with your “why” – they have constancy of purpose; set and constantly reinforce vision, values, and direction; and never lose site of the “big picture” – of what’s truly important.
• Lead by example – they are personally involved in improvement (in sponsoring teams, in visiting with customers, in walking the floor); they model desired behavior and the organization’s values.
• Maintain high integrity – they view integrity and ethics as non-negotiable requirements of doing business inside and outside the organization; they reward ethical behavior and hold those accountable for unethical behavior.
• Build and nurture relationships – they know the importance of building and cultivating relationships with their workforce, their customers, their partners, and they take a long-term view regarding decisions involving their stakeholders.
• Engage, empower, and trust your people – they know their employees are the backbone of the organization: employees manage and improve organizational processes, they engage and build relationships with customers, and they create value for the enterprise and its stakeholders.
• Ask good questions…and listen – they are excellent communicators, constantly reinforcing vision, values and direction, but also are good at listening to their people, their customers, and the marketplace.
• Make excellence a priority – they don’t settle for mediocrity, but encourage and reinforce continuous improvement and performance excellence, but
• But don’t let perfection be the enemy of great – they encourage innovation, intelligent risk-taking, and action; they know that momentum is created by trying new things, failing, learning, and then refining and improving and trying other new things.

Creating a culture that encourages, accelerates, and sustains quality, improvement, and performance excellence is a challenging – yet critical – role for leaders.  But the research is consistent and compelling: if leaders focus on only a handful of key areas – those eight listed above – they’ll have a much greater chance of inspiring, cultivating, achieving, and sustaining high performance.

What other insights do you have in ethical decision making?  Want to participate in a discussion on this topic??  Visit our LinkedIn group and/or our blog our to post a comment!

Happy Thanksgiving,

Brian S. Lassiter

President, Performance Excellence Network (formerly Minnesota Council for Quality)

www.performanceexcellencenetwork.org

http://twitter.com/LassiterBrian

Catalyst for Success for 27 Years!