Leadership in Excellent Organizations

Excellent organizations don’t just happen. A key aspect to their development is leadership, which is the topic for today’s blog.

Who is the best leader you have personally seen? I want you to get a mental picture of her or him. Think about how she or he acted, talked, thought. Do you have that picture in your mind? Okay; what are the characteristics that made him or her a great leader to you?

A recent article in HR World by John Hakala (http://www.hrworld.com/features/top-10-leadership-qualities-031908/) listed the top ten leadership qualities: vision, integrity, dedication, magnanimity, humility, openness, creativity, fairness, assertiveness, and a sense of humor. How does this list compare with the characteristics you identified for your ideal leader?

Someone once said that the best example of leadership is leadership by example. This brings an important aspect of leadership to mind: a great leader lives the espoused values of the organization he or she is trying to lead. Given that, the definition of a great leader is at least partially dependent on the organization being led. Exaggerating to make a point, the behaviors of an ideal gang leader is no doubt different than those of an ideal leader of a religious order. What both would have, I believe, is the embodiment and personification of the organization’s values and culture. They would lead by example because their most closely held and lived values and culture were perfectly aligned with the aspirations of the members of the organization they lead, or very nearly so.

Edgar Schein, one of the premier thought leaders about culture, made the point in his book Organizational Culture and Leadership that while leaders represent their organization’s culture, they also pay a major role in establishing the culture through their actions and how they interpret events. It is also their responsibility to redirect the organization if it drifts from the ideal:

But if cultures become dysfunctional, it is the unique function of leadership to perceive the functional and dysfunctional elements of the existing culture and to manage cultural evolution and change in such a way that the group can survive in a changing environment.

In fact Schein stated that one of the key differentiators between a manager and a leader is the issue of culture. Leaders help mold culture while managers or administrators operate within it.

Peter Vaill, in an article in Organizational Dynamics, cites three characteristics that all leaders of excellent organizations posses: they put in an extraordinary amount of time; they have very strong feelings about the organization’s purposes; and they focus on key issues and variables. It seems to me that these three variables transcend culture. I can’t imaging a great leader that didn’t spend an extraordinary amount of time thinking about and acting in behalf of the organization; that wasn’t passionate about why the organization exists and what it was trying to accomplish; finally, focusing on key issues and variables, rather than getting bogged down in the mundane or distracted by the extraneous. I agree with Vaill that these characteristics seem to be essential for an effective leader. They probably also transcend culture, although how the characteristics are actually manifest in behavior would undoubtedly differ.

One final thought on leadership. Leadership does not come only from the titular head of an organization. John Quincy Adams is quoted as having said, “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” You will notice this statement makes no reference to organizational status. My guess is as you think about the traits that make a great leader, you will find they are also (at least in large part) the same traits that make a great organizational member. All of us have the opportunity, and responsibility, to develop and use leadership characteristics in making our organizations excellent, no matter our title or formal role.

Fifteen Key Behaviors of Excellent Organizations

Today I would like to discuss the findings of research on high performing teams that I conducted with outstanding teams in India, France, and the United States. The purpose of my research was to distill the essence of high performing teams, irrespective of culture, and to see if there were characteristics or manifestations of that essence that were different in teams from the three countries. To hold as many variables the same as possible, I used three customer support teams from Mentor Graphics, each identified by executive management, their directors, and human resources as being excellent. I used open ended interviews with team members to collect the data and phenomenology as my method of analysis. In this blog entry, I will not discuss cultural differences, only the essence of high performing teams that my research uncovered.

Based on my research, I believe the essence of high performing teams can be described as: a passionate, deep abiding, interest in and concern for teammates, customers or end users of the team’s output, key constituencies external to the team, and the work or output of the team.

So what does this really mean? I believe that high performing teams – and by extension excellent organizations – focus on four things: the quality and quantity of their work/output – why they exist organizationally; the success and professional development of organization members; the needs and expectations of their customers; and key constituencies and variables in the environment, external to the team itself. Each focus represents a value that outstanding organizations and teams hold most dear.

It is hard to see a value. One’s values can be inferred by the behaviors that are displayed as well as by what is said. Accordingly, the four areas of focus were actually inferred by behaviors that were evident in each of the teams. As noted below, for each focus, there were consistent, identifiable behaviors displayed by the team. These fifteen behaviors are what organizational leaders should both be looking for and trying to foster. It is through discussing the importance of the four foci and implementing and reinforcing these key behaviors that an organization builds and reinforces a culture of high performance.

Use these fifteen behaviors to measure how your organization is doing. Does your organization display these key behaviors associated with excellence? Are there areas missing? If all the elements are present, is there room for improvement? I believe an audit based on these fifteen behaviors will help establish the degree of excellence an organization has attained and where there is room for growth.

Fundamental Foci and Associated Behaviors
Found in High Performing Teams

Focus: Concern for Teammates

Associated Behaviors:
~ Using recruiting and hiring techniques to maintain values and culture
~ Using techniques to resolve conflicts that preserve the sense of team and personal integrity
~ Saying and doing things that show concern for fellow team members while building and supporting them
~ Having formal and informal team building activities

Focus: Concern for Customers

Associated Behaviors:
~ Actively seeking to identify customer needs
~ Concern for how customers respond to service/product
~ Ongoing processes to establish two way communication with customers

Focus: Awareness of External Constituencies

Associated Behaviors:
~ Scanning the environment for threats and opportunities
~ Seeking expert assistance to resolve problems when the skills of the team were insufficient
~ Using techniques to maintain the boundary between the team and the external environment
~ Developing synergistic relationships with other internal teams to increase value to the company and to customers

Focus: Concern for the Output of the Team

Associated Behaviors:
~ Focusing on and concern for the productivity of the team and the quality of its work
~ Engaging in ongoing development and learning (individual and team) so both depth and breadth of skills are enhanced
~ Displaying flexibility and adaptability in meeting challenges that face the team
~ Management that establishes clear roles and goals, supports the team in achieving its goals, and focuses on building the team and its members

Process Control and Improvement

Last week I wrote about sustainability from the perspective of organizational members and leadership. In response to my blog, a friend and former manager, Tom Floodeen, wrote, “Another aspect that needs to be considered is the stability of the processes the organization follows. If the processes are correct, stable and sustainable, the people can change but the end result stays the same. It also allows new people that join the organization and come up to speed faster, if the processes are well defined and documented. I agree you have to groom your replacement, but if your replacement changes everything, or if my success was solely based on my abilities, sustainability is at risk.”

This is a great point and a good lead into the topic I want to write about today: process and systems theory. I’ll actually approach them in reverse order.

Ludwig von Bertalanffy and others developed systems theory from the study of living organisms. Systems theory has not been applied to a wide range of topics, including organizational theory. This theory includes the idea that there were two kinds of systems, open and closed. An open system interacts with its environment, is affected by it, and also affects it. Closed systems exist with no external feedback loop. There are few if any completely closed systems; even systems typically given as examples of closed systems (a watch for example) require some external input to sustain them. I won’t discuss the concept here more fully.

I, and most systems thinkers, envision organizations as open systems. As such, they have the characteristics of an open system: 1) elements of the system interact with each other in such a way they can only be fully understood within the context of that interaction; 2) understanding the parts in isolation is not sufficient to understanding the whole; 3) parts of the system are more than a fraction of the overall system – they have an existence on their own; 4) to fully understand the system it has to be examined from an external or meta perspective; 5) it must change input resources into output products or services; and, it posses structure and processes.

My experience with and research about high performing organizations indicate a couple of characteristics apropos this discussion. First, high performing organizations have, as one of their primary foci, an emphasis on productivity. Concern and effort is shown to ensure that the organization operates effectively. As Tom implies in his comment, that includes a focus on processes to ensure they are “correct, stable, and sustainable.” I would modify Tom’s list to note that processes need to produce results that meet or exceed customer/client requirements. I believe Tom would include that in “correct”, but it is an important enough point that I wanted to highlight it.

Today, in order to ensure their processes meet the customers or end users needs, and they are stable and sustainable, many companies are implementing some form of process control. Six-sigma, lean manufacturing or production, TQM [total quality management], SPC [statistical process control] and Kaizen all have at their heart an effort to create and maintain processes that meet the criteria that Tom identified. These process control methods are all valuable because they help organizations systematically examine their processes and identify where there are opportunities for improving, quality, speed, or cost savings. I believe these process control activities can be effective, particularly in manufacturing settings. Their use can become more problematic in services based organizations but here too, if care is taken, I have seen successful application of principles of process control.

There is another characteristic of high performing teams that seems, at least on the surface, to be in conflict with the goal of creating of stable processes. My research shows that high performing organizations have an outstanding awareness of both external conditions and constituencies, and internal capabilities. To maintain that awareness, they continually scan the environment for threats and opportunities, and scan internally for strengths and weaknesses. Based on those scans, excellent organizations make changes, including changes to processes. Some managers believe that once best practices are determined and processes implemented they should not be changed. However, I believe that in excellent organizations processes are subject to continual change and improvement.

Earlier I mentioned Kaizen, which is a Japanese word applied to a method of process control and improvement. However, the word itself has a broader meaning, continuous improvement with the implication that the direction of improvement is towards perfection (See Kaizen: The Key to Japan's Competitive Success, by Masaaki Imai). Although, as applied in the workplace, it uses many of the typical tools of process control such as statistical analysis and the scientific method, its foundational meaning offers a broader meaning of striving for perfection in all aspects of life. I believe that Kaizen offers the opportunity to engage people in a more thoughtful, organic, and holistic manner. This characteristic makes Kaizen an appropriate approach for a broader range of organizational types, including human services, and for all levels of the organization.

Sustainable Excellence

There is a lot of discussion these days about sustainability. Usually when sustainability is invoked, the subject is environmental sustainability. Not without cause, there is a great deal of discussion about and effort expended towards trying to make organizations and our society environmentally sustainable.

Not too many years ago, environmental sustainability was not an issue on most people’s minds. Then, if someone spoke of organizational sustainability, they were more likely thinking in terms of the financial audit assumption of "going concern": an organization’s ability to survive as an ongoing entity; that it will be able to enjoy its assets and meets its obligations. This view is also too narrow, although it begins to get at the issue, at least as expressed in the organizations financial statements.

Without diminishing the importance of either of those meanings, today I would like to focus on a different aspect of sustainability, that of the organization itself.

What I am thinking about is an organization’s ability to sustain itself through its people. Jim Collins spoke to this point in his book Good to Great. He noted that a characteristic of great organizations is the ability to sustain themselves, and outstanding levels of performance, beyond the tenure of a given leader or even leadership team. I am concerned that too few organizations pursue this aspect of sustainability thoughtfully and purposefully.

Again drawing on Collins’ metaphor in Good to Great, if an organization has achieved excellence, it is safe to assume they have the right people in the right seats, at least for the most part. That is a great and notable accomplishment but insufficient. That coveted state can be changed in an instant through illness, accident, retirement, or a key person leaving to join another organization. In order to sustain greatness I believe two things have to happen. First, the culture of excellence has to be so ingrained, so fully and organically absorbed that it is not dependent on the efforts of any one person or few people to sustain it. Excellence has to have become embedded in the organizational DNA. Second, there needs to be a well thought out plan of succession and building of redundant skills, knowledge, and aptitude. I believe focusing on the second characteristic can help an organization develop the first.

The first step in this process is to identify potential successors for key organizational members. I have charged organizational leaders with identifying two or three possible successors to their role. This can be threatening, if sufficient trust has not been established. Some people may feel that asking them to identify possible successors is akin to asking a condemned man to dig his own grave. On the contrary, I believe it is an important aspect to leadership. Leaders train and nourish future leaders. How can you do that effectively if you have not identified who those future leaders are? One caveat: although I think it is important to identify possible successors, I would not tell a person he or she was next in line for a given position unless such a change was imminent. There are too many possible ways that knowledge could lead to problems.

Once the possible successors are identified for each key position, it is important that a well thought out development plan be implemented. Although, as stated above, I would not tell any of the individuals that they have been identified as the successor for a given person, I would tell them that they are viewed as particularly important current and future leaders for the organization. As such, the organization is going to specifically invest in their development.

Now comes the fun part: creating and implementing development programs for those identified. This is more art than science but the range of possible actions could include things as: formal training and/or education, special assignments, participation in select committees or task forces, mentoring, coaching, even lateral assignments to build professional breadth. The best action or set of actions will be different in each case. The goal of the plan will be to develop/ensure the values, skills, knowledge, traits the individual will need to successfully assume the target position.

It is possible that certain individuals will be identified as successors for more than one position. In that situation, careful discussions can ensure that there are not too many development resources applied to any one person or that gaps in experience are left because both parties thought the other was covering that area. Likewise in a large enough organization, cohorts of people who all need exposure to the same concepts or training in the same area could be formed to undergo the experience together. This has the added benefit of building vertical relationship networks that can pay untold and unexpected dividends to the organization over time.

In contrast to what I am proposing, spending time and money on developing people for a future eventuality that may never arise may seem foolish to some. There are those who have adopted a similar just-in-time attitude towards the people in the organization that they have for spare parts: don’t pay to keep them on hand, we’ll buy it when we need it. In this model, it is believed that little time or effort should be spent on developing people. Individuals should be brought in to do a specific job. If they do that well, fine - they should stay in that role until the organization either doesn’t need them anymore or until they are needed more in another role. In either case, promotion or discharge should be based on inherent goodness of fit with the job. Organizational resources should not be spent on development. If a person’s skills become outdated or no longer fit the needs of the organization, they should be discharged and a new person with the right set of skills should be brought in.

This type of transactional relationship between an organization and its members is the antithesis of organizational excellence. There may be short term gains, even flashes of brilliance that brings temporary success but sustaining excellence on the long term is not possible through that approach.

When we think of sustainability, let’s think of our organization, its culture and people, as well as the environment and profitability.

The Power of Trust

Today I want to write about a social lubricant that makes all aspects of creating a high performing organization easier – trust.

It seems as if we live at a time or at least in a society in which trust has broken down to a great degree. In what or in whom do you place your trust? Opinion polls indicate that we have little trust in government; nor do we place much trust in traditional pillars of our society such as doctors, bankers, attorneys, business leaders, or even in the clergy. With half of all marriages ending in divorce, can we even say that as a society we have trust in our personal relationships?

What is the cost of this lack of trust? Stephen M.R. Covey in his book The Speed of Trust: The One Thing That Changes Everything, wrote about the importance of trust and the cost when it is lacking. He makes the point that trust is more than a “nice to have social virtue, a so-called hygiene factor.” He presents a formula for trust: as trust increases, speed of transactions also increase and costs go down; likewise, as trust decreases, the speed of transactions decrease and costs go up. He says the lack of trust creates an unseen tax on organizations; it increases an organizations cost without any increase in productivity.

This is a good metaphor for the unseen cost of a lack of trust. I also like to use the example of an engine; this is an idea most of us can easily visualize. The engine in our car runs smoothly and efficiently, in no small part due to the oil that circulates through the engine lubricating key parts, reducing friction and thus reducing heat. If we don’t care for the oil properly: we let it run low or we fail to change it as directed, the effectiveness of the oil begins to diminish. As that happens, the benefits provided by the oil are also diminished. Friction increases, the engine begins to run inefficiently, wear and tear on parts increase, and ultimately, if the situation is not corrected, the engine will stop altogether.

Ideally in an organization, things would begin with trust levels high and clean. Honest, open discussion and actions would maintain the state and the engine of the organization would run smoothly and efficiently. Unfortunately, we do not live in an ideal world and there are no ideal organizations. People may come into an organization with mistrust towards others or those who have, or are perceived to have, authority. The trust level of the organization may already be compromised from the beginning. On the other hand, the trust level may have started out high or at least adequate but over time, actions and decisions taken by members of the organization have tainted or reduced the level of trust. The organizational engine begins to run a little rough. Perhaps it keeps running but not efficiently. Perhaps it gets rougher and rougher, begins to knock, and finally seizes up and stops.

What can be done to either clean and restore the level of trust or increase it, if it was not sufficient to begin with? Are we doomed to suffer from a lack of trust on an individual or an organizational basis?

It is possible that the lack of trust is so severe that major personnel changes are required. These are situations in which the level of trust is so low that a transfusion of trust is needed through changing organizational members. This is a relatively quick fix and it may solve the problem. However, unless underlying issues that caused the loss of trust are corrected, it is more likely that the organization will continue to, at a minimum pay, the “low trust tax”.

Often an effective “filter” can restore and maintain at least an operational level of trust. Carrying forward the engine metaphor, as the oil pumps through the engine, in addition to reducing friction and heat, it also carries away bits of debris, dirt, and contaminants. These get cleaned from the oil as it rushes through the filter. Likewise in organizations, bits of doubt, misunderstanding, anger and frustration are bound to arise. If a sufficient level of trust exists, these concerns are usually easily dealt with. However, even in excellent organizations, these bits of interactional debris can build up. The filter that can remove these potential toxins is open honest communication, which has the same effect in relationships and organizations (which can be seen as an extended matrix of relationships) as an oil filter has in an engine.

Honest, open communication through and between all levels of the organization will keep the oil of trust clear and running freely throughout the organization. As the oil filter restores the oil’s capacity to do its job, effective communication can restore trust and enable the organization to run more effectively.

As I said in a previous post, organizational culture develops naturally, even organically, from the actions and decisions of organizational members, especially those perceived as leaders. Trust is an important element of organizational culture and it develops in just the same way. If organizational leaders and members act with integrity, honesty, and openness with each other, with customers and vendors, and with the general public, trust will be high. People in and outside the organization can have confidence in the intent as well as actions of organizational members. However, especially given the low level of trust that exists in our society today, it is easy for an organization to lose the culture of trust. Once lost, repairing the loss will be harder than maintaining it in the first place.

What is the state of trust in your organization? Are you paying a low trust tax? If so, how much is the lack of trust costing in terms of extra staff, cumbersome procedures, missed work, lost opportunities, poor morale, and lack of motivation?

Creating A Culture of Excellence

Developing an excellent organization is essentially a task of growing an excellent culture.

Much has been written about culture within organizations, with some theorists doubting that such a thing even exists. Most people who have worked for more than one organization agree that something exists about an organization that is more than the sum of its assets or even its people.

Barnouw (1963) stated that culture is the way of life of a group of people; others have said that culture is just “how we do things around here.” I believe an organization’s culture covers a wide range of things that you see (what are buildings and furnishings like? How often do people meet? Are dress and/or language formal or informal? Are there separate executive facilities such as parking or dining or are such things more egalitarian?); as well as things you don’t see (values, attitudes, norms of behavior, and adopted roles). In fact I believe it is true that the most powerful aspects of culture are those underlying mental models and values, which are not seen but which shape what people think, say, and do.

Another important aspect of culture is it is something that older members (in terms of seniority and power) try to instill in new members. This self perpetuation is great if a healthy, even excellent culture has already been developed. On the other hand, if a toxic, non-productive or even destructive culture has developed, changing that will be made more difficult because of the inertia created by the existing, dominant culture.

Understanding how cultures develop helps us know what steps need to be taken early in an organization’s existence to ensure a culture of excellence. Likewise, that same understanding gives us clues about how to change a culture that is less than desired. Schein (1992) states that culture arises over time out of common experiences and shared meaning that is extracted from those experiences. As those shared experiences occur, the meaning of those experiences will emerge within the group and some form of organizational culture will develop. Additional experiences over a longer time will strengthen assumptions and reinforce values so that the organizational culture will become both more defined and differentiated from the larger cultural milieu and also more deeply embedded.

There are three important components an organization can use to develop a culture of excellence: recruiting, socialization, and developing congruency with and commitment to the organization on the part of the employees. In Jim Collins’ outstanding book, Good to Great, he makes the point that getting “the right people on the bus” is the first step towards excellence.

I believe that starts with organizational leadership. To create an excellent organization, the leaders must be excellent themselves: They must not only believe in but manifest in their actions a passion for the organization’s mission and its vision and values (see previous post on these topics). Assuming a deep commitment to the organization’s mission and alignment with the desired values exists in leadership, the next step is to hire and promote, in large part, based on those same characteristics. Sure function, technical, and professional skills are important, but excellence depends on deep alignment around the intangibles. Who is brought into an organization, over time, determines to a great extent what the organization will become

The next important component for developing a culture of excellence is socialization. Socialization occurs in families as children are born and raised; and it occurs in organizations as new members are inducted, mentored, fostered, oriented, and in all other ways formal and informal made part of the “team”. This is a very important step and more effort needs to be taken than having everyone go through a half-day orientation. If a culture of excellence is going to be developed, it is important to have someone who reflects the desired values mentor and guide the new member until he or she can function in the organization in a way that is culturally appropriate.

This brings us to the third component for developing a culture of excellence: developing congruency with and commitment to the organization on the part of the employees. For people already in the organization, open and honest discussions about organizational direction, and the values and assumptions being fostered, are very important. Such discussions will allow people to reflect on how those values, assumptions, and the behaviors that flow there from, fit with what they think, believe, and hold most dear. These types of discussions routinely occur during planning sessions, team meetings, and in individual formal and informal discussions. They also occur as organizational leaders explain events, or frame them, in such a way as to help create a common understanding and response. This creation of a common organizational understanding is a key aspect of leadership because it helps foster a shared meaning that organizational members will have to key events – building the common culture.

Ideally, these discussions will reveal there is a great deal of consistency between the values of the individual and the organization. Failing that, the individual, upon reflecting on the culture that is being developed in the organization, will see the advantages to it and strive to align with the culture. Other times, for a culture of excellence to develop, the person and the organization will have to part ways. Interestingly, how this is decided and done can be, and often is, an important, perhaps defining, “common experience” that will help create the organization’s culture.

Foundational Pillar for Organizational Excellence

One of the major reasons that organizations fail to achieve excellence, I believe is a lack of clarity about why they exist, what they are trying to do, and what they need to do to be successful.

Among the first things founders of an organization should do is clarify the mission, vision, and values for the organization. This is equally true for existing organizations when there is a change of leadership or a change in direction or focus. Too often, in a rush to get to the work of the organization, or to respond to the demands of business in the case of existing organizations, these critical, foundational elements are skipped or glossed over. I believe that clear mission, vision, and value statements should serve as the pillars upon which future planning, budgeting, and operations rest.

W. Clement Stone is quoted as saying, “When you discover your mission, you will feel its demand. It will fill you with enthusiasm and a burning desire to get to work on it.” Thus it is for organizations as well. A clear, compelling mission has the effect of generating enthusiasm and releasing the energy of organizational members. Whether it is a new or an existing organization, ensuring that the mission is clear, and that people understand it and support it, is critical. Having discussions about the mission with organization members will reveal if the mission is clear and if there is general agreement and support. If either is missing, these same discussions can help resolve the situation. Through active listening, underlying, and perhaps unspoken, concerns can be addressed and resolved. I have found that discussions about organizational mission can regenerate enthusiasm among its members about why the work of the organization is important and why they became part of the organization originally. The process of clarifying the mission allows people a chance to reconnect to the organization based on their own values and interests.

The next foundational piece that is required for excellent organizations is a common vision of what the organization is trying to become. Proverbs 29:18 states, “Where there is no vision, the people parish.” This may be an overstatement for organizations but vision statements are an important communication tool to ensure there is clarity and unity within an organization. This vision statement is typically broader than a mission statement; also it is meant only for those inside the organization as opposed to the mission statement which may be more generally distributed. A vision statement expresses in vivid language and detail, painting a word picture, what the organization is striving to become five, ten or even more years in the future. This word picture should describe what you are trying to build and can serve as inspiration for action. It also serves as a measure against which an organization can measure its performance.

Ideally, a vision statement will have a powerful, attention capturing first sentence that will reinforce the mission and can serve as a powerful motivating slogan. Microsoft’s, "A personal computer in every home running Microsoft software" is a good example of such a slogan. Such a statement, if done right, can serve as a mini-vision statement: one that can be memorized, remembered, and thus more easily impact organizational behavior.

The third pillar upon which organizational unity rests is the values statement. A values statement cites the values the organization holds most dear and reflects how the organization expects its members to treat each other, customers, suppliers, and often the greater society and environment. Developing a values statement is a critically important process. Perhaps even more than the mission or vision statement, the values statement will be the measure against which behavior will be measured. Care should be taken to ensure that values incorporated in the values statement are those most deeply held and that will drive organizational action. Adopting a values statement that sounds good but does not reflect reality can be dispiriting and cause more harm than good. However, well crafted, and truly believed values statements provide solid guidance about how decisions should be made and what actions taken.

Together mission, vision, and values statements can help an organization achieve unity of purpose, clarity of vision, and a clear basis for action. They are, I believe, foundational elements needed to create an excellent organization.