Leadership for Performance Excellence 1
CHAPTER 13
Leadership for Performance Excellence
Teaching Notes
The keys to attaining an in-depth understanding of total quality organizations as integrated
systems are to have basic knowledge of organizing principles and organizational cultures and to
develop and use a sustainable model for performance excellence such as the Baldrige criteria as a
foundation for quality organization and continuous improvement. The Baldrige framework looks
at leadership as the driver for performance excellence. An understanding of basic leadership
concepts and their importance is vital for managers and workers at every level in a TQ focused
organization. Integrated systems have become more important in organizations that aspire to
high quality levels, and organizational leaders must understand how to deploy plans and quality
efforts throughout the organization.
This chapter focuses on leadership and the integration of concepts developed throughout
the text. This organizing focus is one that students may find easier to grasp than the cost of
quality or even planning for quality. However, you should point out that traditional views of
organizations is rapidly changing, as organizations and individuals are shaken out of their
complacency by events that surround them today. The strict hierarchy of the conventional
organizational pyramid is giving way to a matrix- or process-focused organization, self-managed
teams, massive part-time employment, and economic and technological dislocations. Numerous
attempts to align the corporate culture with the total quality management, global marketplace,
and “lean and mean” concepts, not all of which have been resounding successes, have brought us
into the second decade of the 21st Century.
Key objectives for this chapter are:
• To define leadership as the ability to positively influence people and systems under one’s
authority to have a meaningful impact and achieve important results. Leaders create clear
and visible quality values and integrate these into the organization’s strategy and
structure.
• To learn that the six key leadership competencies are: navigator, communicator, mentor,
learner, builder, and motivator. These competencies depend on a collection of personal
leadership characteristics: accountability, courage, humility, integrity, creativity,
perseverance, and well-being.
• To understand the perspective of strategic leadership, defined as “a person’s ability to
anticipate, envision, maintain flexibility, think strategically, and work with others to
initiate changes that will create a viable future for the organization, and its competitive
advantage to the organization in this way.” Activities that strategic leaders perform
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generally include creating and communicating a vision of the future, sustaining an
effective organization culture, making strategic decisions, developing key competencies
and responsibilities, managing multiple constituencies, selecting and developing the next
generation of leaders, and infusing ethical value systems into an organization’s culture.
Effective strategic leaders also have the capability to create and maintain what is termed
absorptive capacity (the ability for an organization to learn) and adaptive capacity (the
ability of an organization to change) in order to deal with increasingly hyper-turbulent
environments.
• To study the leadership system and how leadership is exercised, formally and
informally, throughout an organization. These elements include how key decisions are
made, communicated, and carried out at all levels. The leadership system includes
structures and mechanisms for decision making, selection and development of leaders
and managers, and reinforcement of values, directions, and performance expectations.
• To investigate the contemporary and emerging leadership theories include situational
leadership, transactional leadership theory, transformational leadership theory, substitutes
for leadership theory, and emotional intelligence theory. The purpose of leadership
theories is to explain differences in leadership styles and contexts. They can provide
guidance to senior leaders in pursuing performance excellence.
• To understand the importance of organizational governance and societal responsibilities
in modern organizations. Governance is 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. Corporate social responsibility (CSR) relates to responsibility to the public
through the practices of good citizenship and includes ethics, aspects of corporate
governance, and protection of public health, safety, and the environment. Corporate
social responsibility has become a strategic imperative and a competitive or marketplace
necessity.
• To show that organizations adopt TQ to react to competitive threats or take advantage of
perceived opportunities, however, threats are the most effective in providing an incentive
to act and change the organization’s culture.
• To develop an understanding of the need for commitment from organization’s senior
leadership that is critical to success, but is not easy. It requires aligning objectives with
the goals of senior leaders and stakeholders, using quantitative arguments, developing
sympathetic allies, and getting early wins.
ANSWERS TO QUALITY IN PRACTICE FEATURES
Leadership at Advocate Good Samaritan Hospital
1. How does GSAM reflect the concept of strategic leadership?
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Advocate Good Samaritan Hospital (GSAM) reflects the concept of strategic leadership by:
a. Establishing an inspiring vision: To provide an exceptional patient experience marked by
superior health outcomes, service, and value.
b. Enrolling leaders in the vision.
c. Creating alignment, ownership, and transparency to support the vision. Leadership
needed to create a sense of urgency, explain the “why,” and over-communicate by a
factor of 10.
Strategic leadership is defined as “a person’s ability to anticipate, envision, maintain flexibility,
think strategically, and work with others to initiate changes that will create a viable future for the
organization, and its competitive advantage to the organization in this way.”
2. What leadership behaviors, practices, and theories are evident in this example?
The GSAM leadership behaviors, practices, and theories became evident as they implemented
the Good Samaritan Leadership System model, as shown in Figure 13.2. See the arrows that
surround the stakeholder model.
3. How does the GSAM Leadership System model align with the categories in the Baldrige
Criteria framework?
The leadership system aligns almost perfectly with the Baldrige categories. Specifically:
Understand Stakeholder Requirements – Customers, Category 3
Set Direction and Establish Goals – Leadership, Category 1
Organize, Plan & Align – Strategy, Category 2
Perform to Plan – Operations, Category 6
Develop, Reward & Recognize – Workforce, Category 5
Learn, Improve & Innovate – Measurement, Analysis, and Knowledge Management, Category 4
Leadership Changes at Alcoa
1. From a strategic management standpoint, why do you think that corporate management
at Alcoa delayed taking action for five years as the plant continued to lose money and
deteriorate in other operational measures?
From a strategic management standpoint, it is difficult to speculate on why corporate
management did not take definitive action for five years at the Addy plant. However, various
theories might be put forth. These might be termed the “stay-the-course,” “insufficient
measures,” and the maintaining “market presence” strategies. First, the company had invested in
innovative structuring that had caused the plant to become a showcase. At first, this approach
seemed to have worked well. However, systems (human and technical) which are not maintained
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and improved tend to deteriorate. The company may have felt that it would lose face as a
forward-thinking innovative firm if it closed down the showplace facility and admitted defeat.
Second, partially because of the innovative structure there may not have been sufficient measures
to track the components of cost, quality, and productivity. If those are not in place, it takes quite
a lot of effort to begin to build information systems and learn how to use them to impact
2. What type of leadership style did Simonic seem to follow? Does it fit any of the
leadership theories that were developed in the chapter?
Simonic seemed to use a mix of transformational and transactional leadership styles. The CEOs
and executive team members of nearly every Malcolm Baldrige Award recipient have generally
modeled this leadership behavior, and some empirical evidence found in research suggests that
transformational leadership behavior is strongly correlated with lower turnover, higher
productivity and quality, and higher employee satisfaction than other approaches. However, not
all managers in TQ organizations need be transformational leaders. An organization pursuing TQ
3. How easy or difficult would it be for other organizations to duplicate the leadership style
of Simonic and the organizational systems practiced at Addy, prior to, and after Simonic’s
tenure?
It would appear to be moderately difficult to duplicate the leadership style used by Simonic and
the organizational systems practiced at Addy. The basic management structure was built around
what might be called a socio-technical system design that included teamwork, informal,
democratic management style, and highly technical process management and control
requirements. As indicated in the text, organization structure has numerous facets, including:
1. Company operational and organizational guidelines. Standard practices that have
developed over the firm’s history often dictate how a company organizes and operates.
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2. Management style. The management team operates in a manner unique to a given company.
For example, management style might be formal or informal or democratic or autocratic. If
the organization operates in a highly structured, formal atmosphere, organizing a quality
effort around informal meetings would probably meet with little success.
ANSWERS TO REVIEW QUESTIONS
1. Define leadership. Why is it necessary for a culture of performance excellence?
Leadership is defined as the ability to positively influence people and systems under one’s
authority to have a meaningful impact and achieve important results. It implies the right to
exercise authority and the ability to achieve results. Strong leadership is necessary to
2. List and explain the key competencies and personal characteristics that strong leaders
possess.
Six competencies for leadership based on more than 50 authors’ thoughts on leadership are:
• Navigator – creates shared meaning and provides direction towards a vision, mission,
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• Mentor – provides others with a role to guide their actions. This competency requires the
development of personal relationships that help others develop trust, integrity and ethical
decision making.
• 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. This competency also entails assuming responsibility for ensuring necessary
resources are available and the evaluation of processes to ensure effective resource use.
• Motivator – influences others to take action in a desirable manner. This competency also
includes the evaluation of people’s actions to ensure they are performing consistently
with the mission, goal or end-result.
A collection of personal leadership characteristics underlie these six competencies:
1. Accountability – taking responsibility for the organization, community or self that the
leader serves. This provides the means for measuring performance and dealing with
performance that is not good.
2. Courage – the mental or moral strength to venture, persevere and withstand danger, fear
3. Summarize the key leadership practices for performance excellence.
Key practices for performance excellence leadership may be found in Table 13-1. They include,
in summary form:
a. Relating to visionary leadership, there is the need for organization leaders (especially Senior
Leaders) to set and deploy organizational vision and values, demonstrate those values through
person actions, promote an environment leading to legal and ethical behavior, and create a
sustainable organization.
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organizational agility; provide for organizational and workforce learning and participate in
succession planning and the development of future organizational leaders
c. Relating to communication, organizational leaders must communicate with the entire
workforce, encourage frank, two-way communication throughout the organization, and
communicate key decisions.
4. What is strategic leadership? How does it differ from the common concept of leadership?
Strategic leadership can be defined as “a person‘s ability to anticipate, envision, maintain
flexibility, think strategically, and work with others to initiate changes that will create a viable
future for the organization, and its competitive advantage to the organization in this way.”
Strategic leaders must be actively involved in creating and communicating a vision of the future,
5. Explain the concept of a leadership system. What elements should an effective leadership
system have?
The leadership system refers to how leadership is exercised throughout the organization, and
6. What is the role of steering teams in many leadership systems?
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Steering teams in leadership systems have the responsibility to provide leadership, planning,
implementation, and review direction. Leadership involves articulating a quality vision, and
ensuring that the business management process is aligned, deployed, and supported at all levels.
7. How do emerging leadership theories differ from traditional theories? Summarize them
and their importance in leadership for performance excellence.
Emerging theories — enhance or extend current theory by attempting to answer questions raised,
but not answered, by traditional contingency approaches. For example, Attributional Theory
states that leaders’ judgment on how to deal with subordinates in a specific situation is based on
their attributions of the internal or external causes of the behaviors of followers. One of the most
8. How does transactional leadership theory differ from transformational leadership
theory? Why is transformational leadership more relevant to quality and performance
excellence?
Transactional Leadership Theory assumes that certain leaders may develop the ability to
Transformational Leadership Theory holds that leaders adopt many of the behaviors including
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Bass differentiated transformational from transactional leadership behavior, stating:
“Transformational leaders have greater interest in continuous organizational change and
improvement transcending or aligning self-interests for the longer-range greater good of the
organization and its members. This is in contrast to transactional leaders, who are more focused
on the satisfaction of self-interests and the maintenance of the organization’s status quo.” In
practice, however, it is often difficult to distinguish between the two theories, and research has
discovered that they are distinct, but related processes. While transactional leaders may increase
9. What is corporate social responsibility and why is it important for organizations?
Corporate social responsibility (CSR) is the “responsibility of enterprises for their impacts on
society.” CSR implies that organizations must behave ethically and be sensitive to social,
cultural, economic, and environmental issues. This includes compliance with legal and ethical
standards, corporate governance, and protection of public health, safety, and environmental
protection. Senior leaders must act to prevent problems, make forthright responses when
problems occur, and make information available in order to maintain public awareness, safety,
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10. How does the ISO 26000:2010 standard guide organizations in CSR?
The International Organization for Standardization has developed a voluntary social
responsibility standard, ISO 26000:2010 – Guidance on social responsibility, attesting to the
importance of this issue. The standard provides guidance on
• concepts, terms and definitions related to social responsibility;
• the background, trends and characteristics of social responsibility;
• principles and practices relating to social responsibility;
11. Explain how CSR is reflected in the Baldrige Criteria.
CSR has been prominent in the Baldrige Criteria since its inception. In the initial 1988 Criteria,
public responsibility was focused narrowly on mechanisms used for external communication of
information concerning corporate support of quality assurance or improvement activities outside
the company. Over the next several years, this item was expanded to include how the company
extended its quality leadership to the external community and integrated its responsibilities to the
public for health, safety, environmental protection, and ethical business practice into its quality
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An organization’s leadership needs to stress its responsibilities to the public and needs to
practice good citizenship. These responsibilities refer to basic expectations of your organization
– business ethics and protection of public health, safety and the environment. Health, safety, and
the environment include your organization’s operations as well as the life cycles of your
products and services. Also organizations need to emphasize resource conservation and waste
reduction at the source. Planning should anticipate adverse impacts from production,
distribution, transportation, use, and disposal of your products. Plans should seek to prevent
problems, to provide a forthright response if problems occur, and to make available information
and support needed to maintain public awareness, safety, and confidence. For many
organizations, the product design stage is critical from the point of view of public responsibility.
12. What is governance? Why is it important that organizations have a strong governance
system?
An important aspect of any leadership system is governance, which refers to the system of
management and controls exercised in the stewardship of an organization. Corporate charters,
bylaws, and policies document the rights and responsibilities of owners/shareholders, board of
directors, and the CEO, and describe how the organization is managed to ensure accountability,
transparency of operations, and fair treatment of all stakeholders. Governance processes may
include approving strategic direction, monitoring and evaluating CEO performance, succession
planning, financial auditing, executive compensation, disclosure, and shareholder reporting.
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professional principles. Senior leaders must build stakeholders’ and employees’ trust in the
governance of their organizations and ensure legal compliance and ethical behavior. For any
organization, large or small, public or private, ethics should mean going beyond profit or loss
considerations, beyond simply distributing a code of conduct, to creating an organizational
culture that values sound governance, transparency, integrity, and social responsibility.
13. State some examples of how organizations address societal responsibilities.
Organizations may address societal responsibilities in a number of different ways. An important
aspect of CSR is safety in product design and manufacturing. Planning activities such as product
design should anticipate adverse impacts from production, distribution, transportation, use, and
disposal of a company’s products to protect the welfare of consumers and society. Another
ANSWERS TO DISCUSSION QUESTIONS
1. We emphasized that leadership is the “driver” of a total quality system. What does this
statement imply and what implications does it have for future CEOs? Middle managers?
Supervisors?
By saying that leadership is the “driver,” we try to emphasize the critical nature of leadership at
every level for successful TQ. The answer to Review Question 3 elaborates on the practices of top
2. Provide examples from your own experiences in which leaders (not necessarily managers—
consider academic unit heads, presidents of student organizations, and even family members)
exhibited one or more of the six key leadership competencies described in this chapter. What
impacts did these competencies have on the organization?
Answers will depend on who the student selects as his/her example leader. See Review Question 3
3. Explain how leaders can demonstrate each of the seven personal leadership characteristics
cited in this chapter.
Leaders can demonstrate the seven personal leadership characteristics of: accountability, courage,