Chapter 2 Leadership Effectiveness CHAPTER 2 LEADERSHIP EFFECTIVENESS CHAPTER OBJECTIVES After this chapter, students shall be able to: ** Know the concepts and definition of effective leadership “ Appreciate the role of management and the TQM council “ Identify and internalize core values, quality concepts, strategic planning CONTENT OUTLINE Concepts and definitions of leadership Implementation of TQM process The role of management Quality council of TQM * Core values of TQM TQM statements * Strategic planning “+ Characteristics of effective leaders Total Quality Management - Concepts and Practices 29 canned wit LamScaChapter 2 Leadership Effectiveness CONCEPTS AND DEFINITIONS OF DERSHIP Leadership needs a strong understanding of the oe of human being: the hasie needs, wants, interest and abilities. To be effective and efficient, a leader needs to fw and understand the following as stated by D. H. Besterfield: 1. People, paradoxically, need security and independence at the same time. 2. People are sensitive to external rewards and punishments and yet are also strongly self-motivated, People like to hear a kind word of praise. 4. People can process only a few facts at a time, thus, a leader needs to keep things simple. 5. People trust their gut reaction more than statistical data. 6. People distrust a leader’s rhetoric if the words are inconsistent with leader’s action or deeds. A good leader will find ways to reward and thereby inspire mployees. Employees must believe a task is important if they are to be committed to it. Employees must also be given some personal control over the task in order to make the task their own and, therefore, something to which they can commit. A leader, by giving the employees a measure of control over an important task, will tap into the employee’s inner drive. Employees, led by the manager, become excited participants in the business organization. A leader, in the face of complexity, will always focus on a few key values and objectives. Focusing on a few values or objectives gives the employees the opportunity to discern on a daily basis what is necessary and what is not 30 Total Quality Management - Concepts and Practices 4 ocalineu WILT ScaChapter 2 Leadership Effectiveness According to James MacGregor Burns, “A /eader is one who instills purposes, not one who controls by force and intimidation”. A Jeader strengthens and inspires the followers to omplish shared goals. Business leaders shape the organization’s values, promote the organization’s nization’s values, and exemplify the values, protect the o organization’s values. Leadership is defined as: L— Leadership is /oyalty to God, country and people E—_ Itis enthusiasm and effort to help and secure others. A— Itis advocacy, action and accomplishment. D-— It is dedication, discipline, dignity, decency. devotion to duty and decisiveness for the general welfare. E- It is excellence and exemplary work for others to follow and emulate. R-— Itis reliability, responsibility, respect for the law and the rights of others, and reconciliations for peace and unity. S — It is sincerity, service, self-sacri make life better for mankind. H = It is Aumility, honesty, honor, helpfilness, and hard work for accomplishment and fulfillment. I— Itis integrity, interest, initiative, and idealism. P — Finally, leadership is patience, perseverance, beyond partisanship, religion or creed; it works for peace, progress and prosperity to mankind. ice, social justice to Finally, Burns stated, "Leaders and followers raise one another to higher levels of — motivation — and morality,......leadership becomes moral in that it raises the level of human conduct and ethical aspii 1 of both the leader and the led, and thus, has a transforming effect on both...” Total Quality Management ~ Concepts and Practices 31 Scarined wit LamScaChapter 2 Leadership Effectiveness 2.2. IMPLEMENTATION OF THE TQM PROCESS The implementation of the TOM process begins with management and, most important, the CEO's commitment. Leadership effectivene: sential during every stage of the implementation process and particularly at the start. In indifference and lack of involvement by management in reasons for the failure d activities. If management has not been properly educated in the TOM concepts, that should be done right away. In addition to formal education, managers should visit successful TOM business organizations, read selected articles and books, attend seminars and conferences, and join professional organizations for quality assurance. fact, are frequently regarded as the mai of quality improvement programs an of the implementation process is very important. Is adopt the Timing the business organization ready to embrace and total quality journey? There may be some foreseeable problems, such as a reorganization, change in management personnel, interpersonal conflicts, a current crisis, or a time consuming activity. These problems may postpone implementation to a more conducive time. Next stage is the organization of the quality council. Initiation of these duties is an’ important part of the implementation of TQM. The formulation of core values, a vision statement, a mission statement, and a quality policy statement, with input from all employees, should be first undertaken. The active involvement of managers and supervisors is very important to the success of the TQM activity. “hey are responsible and accountable for attaining many of the 32 = Total Quality Management — Concepts and Practices - ocalineu WILT U caChapter 2 Leadership Effectiveness business organization's goals and objectives, and they form enduring links in the communication channels from management to the front-line workers. Without management's early and active support, the TQM programs and activities could fail. Management needs to erisure that managers at all levels have an opportunity, as soon as possible, to develop ownership of the TQM programs and a chance to acquire the insight and skills necessary to become leaders. One way to attain this concept is to have a retreat. The retreat will focus on TOM training, leadership | skill, and active involvement in the development of the business organization’s statements. In case there is a union, there should be early discussions with the representatives on TOM. Managers should involve union officers by sharing with them implementation plans and programs for TOM. As the quality effort progresses, managers and union officers may work together on quality improvement programs and activities. At this stage of the implementation process, it is important to communicate TQM to the entire business organization. important not only during the Communication is communication must be a _implementation stage; continuous process. Communication is necessary to create TQM awareness, interest, desire and action. Surveys must be conducted among customers, employees, and suppliers to benchmark the attitudes of these three groups. Data from these surveys provide better information for quality improvements projects. Everybody needs to be educated in quality awareness and problem solving. Training and development is conducted when the employee is placed in a project team or the work group is ready for the training. Total Quality Management - Concepts and Practices 33 ocarined wit LamScar 4 Chapter 2 Leadership Effectiveness The quality council identifies and determines the qualit so that teams and work groups a confidence; the first projects should be simple ones. [n addition the council organizes the project teams and work d- monitors their progress. The implementation s is completed by following the other duties of the improvement project ouncil. nization has to be patient and not to rush The business org .s that don’t eliminate the root causes, the teams for solution: There is often a tendency to rush the implementation process which is not necessary to do. 2.3. THE ROLE OF MANAGEMENT Every personnel is responsible for quality, much more for management and the Chief Executive Officer (CEO). However, only the CEO can provide the leadership to achieve results. Management should participate in the jon process described earlier. They must also uuality council and perform all of its dicated in this chapter. These two implementati participate in the q duties which are in activities provide the core of the manager’s role. the philosophy of Management By Wandering Around (MBWA). They should go out of the office and visit customers, departments, and plants within the organization, and suppliers. Management must talk to the people or stakeholders. They will be able to know what is happening with a particular supplier or project. Management must practice MBWA can substantially reduce paperwork. Encourage subordinates to write only important messages that need to be part of the permanent record. An excellent example of MBWA is given by Kinko's executives. Periodically the 34 Total Quality Management — Concepts and Practices — ~ Scanned wi mScaChapter 2 Leadership Effectiveness regular employees go on vacation and their duties, for two or three days at the location, are performed by Kinko's executives which is an excellent technique for gaining first- hand information, Let employees think for themselves, Management's role is no longer to make the final decision, but to make sure the team’s decision is in line with the quality statements of the business organization. Push problem solving and decision making to the lowest appropriate level of delegating authority and responsibility. Managers must be informed on the topic of quality improvement by reading books and articles, attending seminars, and talking with other TQM leaders. The leader sends a strong message to subordinates when he or she asks if they have read a particular book or article. The needed resources must be provided to train subordinates in the TQM tools and techniques, the technical requirements of the job, and safety. Resources in the form of the appropriate equipment to do the job must also be provided. Managers must find time to celebrate the success of their business organization’s quality efforts by personally participating in award and recognition programs. This program is an excellent opportunity to reinforce the importance of the effort and to promote TQM. A handshake with a sincere “thank you and congratulation for a job well done” is a powerful form of recognition and rewards. One of the duties of the quality council is to establish or revise the recognition and reward system. In particular, management's incentive compensation must include quality improvement performance. Also, provisions must be made to reward teams as well as creative individuals. Total Quality Management ~ Concepts and Practices 35 i §§ Scrrifeu Witt LAMSCAChapter 2 Leadership Effectiveness Managers must be visibly and actively engaged in the quality effort by serving on teams, advising teams, and teaching seminars. They should lead by demonstrating, communicating, and reinforcing the quality statements. As a rule of thumb, they should spend about one-third of their time on quality. \ very important role of managers is listening to internal and external customers and suppliers through visits, focus roups, and surveys. This information is translated into core values and process improvement projects. Another very important function of managers is communication. The objective is to create awareness of the importance of TQM and provide TOM results in an ongoing manner. Some of the internal communication techniques are the followin; Newsletters and other publications Posters, TOM bulletin boards Emergency departmental information meetings Memoranda : General meetings eae ay TOM must be properly “sold” to all employees, for if they don’t buy it, 70M will never be successful. In addition to internal efforts, there must be external activities with customers and suppliers, and media, advertising in trade magazines, and interaction with the quality community. By adopting the above-mentioned suggestions, managers should be able to drive fear out of the business organization, break down barriers, remove system roadblocks, anticipate and minimize resistance to change, 36 Total Quality Management - Concepts and Practices ocalineu WIL ScaChapter 2 Leadership Effectiveness and in general, change the culture. Only with the involvement of management can TOM be successful. 24 QUALITY COUNCIL OF TQM In order to establish a culture of quality and excellence in the business organization, a TQM council must be organized to provide overall direction. The council shall be the driver for the TOM engine. In a typical business organization the council is composed of the Chief Executive Officer (CEO), the managers of the functional areas, such as design, marketing, finance, production and quality, and a coordinator or consultant. In case there is a union, consideration should be given to have a representative in the council. A coordinator is necessary to assume some of the added duties that a quality improvement activity requires. The coordinator should be a bright young person with executive potential and shall report directly to the CEO. The duties and responsibilities of the coordinator is to build two-way trust, propose team needs to the council, share council expectations with the team and brief the council on team progress. In addition, the coordinator will ensure that the teams are empowered and know their duties and responsibilities. The coordinator’s activities is to assist the team leaders share lessons learned among teams, and have regular leaders meeting with team leaders. In smaller business organizations where managers may be responsible for more than one functional area, the number of members will be smaller. Thus, a consultant would be most welcome instead of a coordinator. Total Quality Management — Concepts and Practices 37 ——————sScanneu wit CamScapo Chapter 2 Leadership Effectiveness According to Dale H. Besterfield, the basic duties of the council are: 1. Develop, with input from all personnel, the core values, vision statement, mission statement, and quality policy statements. Develop the strategic long-term plan with goals and the annual quality improvement program with objectives 3. Create the total education and training and development plan. 4. Determine and continually monitor the cost of poor quality. 5. Determine the performance measures for the business organization, approve those for the functional areas, and monitor them. 6. Continually determine those project and departmental or work group teams and monitor their progress. 7. Establish multifunctional project and departmental or work group teams and monitor their progress. 8. Establish or revise the recognition and reward system to account for the new way of doing business. In large business organizations TQM councils are organized at lower levels of the firm. Their duties are similar but related to their particular level in the organization. Initially these activities will require additional work by council members; however, in the long run their jobs will become easier. These councils are the instruments for accepting the idea of continuous quality improvement. Once the TQM program is well organized, a typical meeting agenda may be followed: 1. Progress report on team 2. Customer satisfaction report 38 Total Quality Management — Concepts and Practices carne wit CamscaChapter 2 Leadership Effectiveness 3, Progress on meeting goals 4, New project teams 5, Recognition dinner 6. Benchmarking report Henceforth, within three to five years the TQM council activities Will become so integrated in the culture of the business organization that they will become a regular part of the executive meetings. When this stage is attained, a separate TOM council is no longer needed. Quality and excellence becomes the first item on the executive meeting nda or the executive meeting becomes part of the TOM council. 2.5 CORE VALUES OF TQM Core values and concepts promote TOM behavior and define the organizational culture. Every organization shall need to develop its own values. Given here are the core values for the Malcolm Baldridge National Quality Award. They can be used as a general framework for any business organization as it develops its own core values, such as: 1. Customer-Driven Quality Quality is determined by customer. Value, satisfaction, and preferences may be influenced by many factors throughout | the customer's overall purchase, ownership, and service experiences, These factors include the organization’s relationship with customers that helps build trust, confidence and loyalty. This concept of quality includes not only the product and service characteristics that meet basic customer requirements, but it also includes those characteristics that enhance them and differentiate them from competing offerings. Such enhancement and Total Quality Management - Concepts and Practices 39 canned wit LamScaChapter 2 Leadership Effectiveness differentiation may be based upon new Offerings, combinations of product and service offerings, rapiq response, or special relationships. Customer-driven quality is thus a strategic concept. It is directed toward customer retention and market-share gain, It demands constant arket requiremen e customer satisfaction and retention. It also demands awareness of developments in technology and of competitors’ offerings and rapid and flexible response to customer and market requirements. Success requires more than defect and error reduction, merely meeting specifications, and reducing complaints, However, defect and error reduction and elimination of causes of dissatisfaction contribute significantly to the customers’ view of quality and are important parts of customer-driven . quality. In addition, the organization’s success in recovering from defects and errors is crucial to building customers relationships and to customer retention, An organization’s customer-driven focus needs to address all stakeholders-customers, employees, suppliers, stockholders, and the general public, 2. Leadership Leaders in the business organization should create customer awareness, set a clear and visible quality values, and high expectations. Reinforcement of values and setting of expectations requires adequate personal commitment and involvement. The leaders’ core values ind commitment need to include areas of public responsibility and corporate citizenship. The leaders must Participate in the creation of strategies, systems, and methods for attaining excellence. 40 Total Quality Management — Concepts and Practices canned witn CainScaChapter 2 Leadership Effectiveness The systems and methods need to guide all activities and decis jons of the business organization. The leaders must commit to the growth and development of the entire personnel and should encourage participation and creativity by all. Through their regular personal involvement in visible activities, such as planning, communications, review of organization performance, and recognizing personnel for quality achievement, the /eaders serve as role models reinforcing the core values and encouraging leadership in all levels of. management. 3. Continuous Improvement Attaining the highest levels of quality and competitiveness requires a well-defined and well-executed approach to continuous improvement. The term continuous improvement Tefers to both incremental and “breakthrough” improvement. The approach to improvement needs to be included in the way the organization functions. Being included means: (1) improvement is part of the daily work of all work units; (2) improvement processes seek to eliminate problems at their. source; and (3) improvement is driven by opportunities to do better as well as by problems that must be corrected. Opportunities for improvement have four major sources: 1) employees ideas; 2) research and development; 3) customer input; and : 4) benchmarking of their comparative information on processes and performance. Total Quality Management ~ Concepts and Practices 4 ocarined wit LamScaChapter 2 Leadership Effectiveness Types of improvements: 1. Enhancing value to customers through new and improved produets and Reducing errors, def vices. , and waste. A 3. Improving responsivene: and cycle time performance, 4. Improving productivity and effectiveness in the use of all resources. 5. Improving — the organization’s performance and position in fulfilling its public leadership it as a role model in corporate responsibilities and serving citizenship. Improvement is driven not only by the objective of providing better product and service quality, but also by the need to be responsive and efficient-both conferring additional marketplace advantages. To meet all these objectives, the process of continuous improvement must contain regular cycles of planning, execution and evaluation. This activity requires a quantitative basis for assessing progress and for deriving information for future cycles of improvement. Such information should provide direct links between desired performance and_ internal operations. 4, Employee Participation and Development Continuous improvement of organizational performance depends upon the abilities, skills and motivation of the employees. Employee success largely depends upon having meaningful opportunities to learn and to practice new skills. Organizations need to invest in the development of the employees through education, training, and creating opportunities for continuing growth, Such opportunities might include on-line or classroom and on-the-job training, job rotation, and pay for demonstrated skills. Training, 42 Total Quality Management — Concepts and Practices oOcalneu WILT CalChapter 2 Leadership Effectiveness development and work organizations need to be tailored to more diverse personnel and to more flexible, high performance work environments, There are primary challenges in the area of. personnel development, such as: (1) integration of human resource management-selection, performance, recognition, training, and career advancement; and (2) aligning of human ource management with business plans and strategic change processes. To address these challenges, we need to require and acquire the following data: skills, satisfaction, motivation, safety, and well-being of employees. Such data need to be related to indicators of organization or unit performance, such as: customer satisfaction, customer retention, and productivity. This human resource management approach can be better integrated and aligned with business diréctions, using continuous improvement process to refine integration and alignment. 5. Fast Response Faster and more flexible response to customers is now a more critical requirement in business organization. Major improvement in response-time often requires simplification of work organizations and work processes. To accomplish such improvement, the time performance of work processes should be measured. There are other important benefits derived from this focus. Response-time improvements often drive simultaneous improvements in organization, quality, and productivity. Therefore, it is beneficial to consider response time, quality, and productivity objectives together. Total Quality Management ~ Concepts and Pra 43 ocarined wit LainScaChapter 2 Leadership Effectiveness 6. Design Quality and Prevention problems at the design stage f correcting problems that y includes the creation In general, costs of preventing are much lower than costs 0 occur “downstream.” Design qualit of fault-tolerant (robust) or error-resistant processes and products. A main issue in the competitive environment js the design-to-introduction (product generation) cycle time, Meeting the demands of over-more rapidly changing markets requires that organizations carry out stage-to-stage coordination and integration of functions and activities from basic research to commercialization. From the point of view of public responsibility, the design stage involves decisions regarding resource use and manufacturing process. The growing demand by consumers and others for a cleaner environment means that business organizations will need to develop design strategies that place greater weight on environmental factors. Consistent with the theme of design quality and prevention, continuous improvement and corrective action need to emphasize interventions “upstream” at early stages in processes. This approach yields the maximum overall benefits of improvements and corrections. Such upstream intervention also needs to take into account the organization’s suppliers. 7. Long-Range Outlook Attaining quality and market leadership requires a business organization to have a strong future orientation and a willingness to make long-term commitments to all stakeholder customers; employees; suppliers; stockholders; the general public; and the government. Planning needs to determine or anticipate many types of changes, including those that may affect customers’ expectations of products and_ services, technological developments, changing customer segments, evolving \ 44 — Total Quality Management — Concepts and Practices carined wit CarnScaChapter 2 Leadership Effectiveness regulatory requirements and ~~ community/societal expectations, or thrusts by competitors. Plans, strategies and resource allocations need to reflect these commitments and changes. A major part of the long-term commitment is development of personnel and suppliers, fulfilling public responsibilities, and serving as a corporate citizenship role model. 8. Management by Fact There are many types of facts and data needed for quality improvement and quality assessment: customer, product and service performance operations, market competitive comparisons, supplier, employee-related, and cost and financial. Analysis refers to the process of obtaining a larger meaning. from data to: support evaluation and decision making at various levels within the organization. Such analysis may entail using data to reveal information, such as: trends; projections; and cause and effect-that might not be evident without analysis. Facts, data and analysis support variety of organization purposes, such as: planning; reviewing; organization performance; —_ improving operations; and comparing organization —_ quality performance with competitors’ or with “best practices” benchmarks. A primary consideration relating to the use of data and analysis to improve performance involves the creation and use of performance measures or indicators. Performance Measures or indicators are measurable characteristics of products, services, processes, and operations the organization uses to track and improve performance. The measures or indicators should be selected to best represent the factor that lead to improved customer satisfaction and operational performance. A system of measures or indicators tied to customer and/or organization performance Total Quality Management — Concepts and Practices. 45 carned wit LamSca