Leaders who have successfully led organizations to achieve sustainable excellence focused their time on nine key activities (Latham, 2013). These nine key activities form a leadership system. Leadership is part “art” and part “science”; the leadership system could be considered the “science” of leading transformation. The Leadership System is the “centerpiece” of the framework for [re]creating the organization you want, and stakeholder value is the centerpiece (focus) of the Leadership System.
The focus of a transformation to sustainable excellence is to increase the value created for multiple stakeholders, including the workforce, customers, investors, suppliers and partners, the community, and the environment. The focus on stakeholder needs and relationships helps provide a common alignment point for the strategy, systems, scorecard, and overall organization design for sustainable excellence. In short, high performing organizations develop their workforce to create and deliver exceptional products and services which result in satisfied customers who buy more (repeat business) and tell their friends (referral business) which improves the top line which makes the investors happy. They also create an efficient system and value for other stakeholders such as suppliers and partners, society, and the environment. The task here is to understand the stakeholders’ needs, wants, and desires. | Read more
The needs of the stakeholders inform the creation of a compelling directive. The format of the compelling directive varies but typically consists of the organization’s purpose, mission, vision, values, and core competencies. The vision describes the “desired” reality. The vision is an essential part of creating positive tension, a fundamental force of change to overcome resistance to change. Richard Beckhard’s change formula describes how a compelling vision combines with dissatisfaction with the status quo to overcome resistance to change. The compelling directive builds a “bridge” between the stakeholders and the strategy. | Read more
By what method? How will the organization achieve the desired reality described in the compelling directive? The focused strategy translates the compelling directive and stakeholders’ needs into more specific goals, objectives, and clear expectations. The key here is to focus on a FEW critical goals at a particular point in time. Most organization transformations require hundreds of changes. Success depends on picking just a few of those to work on at a time and then actually executing the plan. Then working on the next priorities as the journey unfolds. The focused strategy is continuously evolving to meet current requirements and challenges. The focused strategy aligns the priorities through the organization and provides the foundation to enable, empower, and engage the workforce. | Read more
Enable, Empower, and Engage (E3) People
While many leaders say that their people are “their most important asset,” their actions often tell a different story. High performing organizations develop and engage their workforce to accomplish the strategy. Creating an engaged workforce consists of (a) acquiring and placing talent, (b) developing (enabling) and empowering people, (c) involving and engaging the workforce at all levels, and (d) addressing the whole person. Acquiring and retaining the best talent is a challenge for most organizations. The best people will only work for organizations where they feel valued, can enjoy their work, and achieve their full potential in a win-win arrangement. Note – If you don’t need the best people, then consider automating the work. | Read more
It is all in the follow-through! The focused strategy also drives the implementation of action plans to accomplish the strategy. The organization system is composed of three levels, including strategic leadership, execution excellence, and organizational learning and innovation. The deployment of the strategy focuses on the design/redesign and further development of one or more key systems to achieve an objective. The Design Framework, combined with a focus on system design provides structure to design, develop, and deploy any new or redesigned initiative or system in the organization. Even new product launches are organization systems that need to be designed or redesigned to achieve a particular goal. The only way we know if our redesign efforts are improving performance is to measure performance. | Read more
The progress and performance improvements resulting from the deployment of the action plans are measured and tracked by a comprehensive scorecard that measures the stakeholders, strategy, and systems. The comprehensive scorecard goes beyond a simple “bottom-line” to a deeper understanding of the organization as a system. This includes both current performance and performance trends over time. Measuring performance and comparing your organization’s performance to other high performing organizations helps create dissatisfaction with the status quo and critical part of creating tension which is central to Beckhard’s change formula. The scorecard is designed to facilitate a dialogue about the stakeholders, progress on the strategy, and a deep understanding of the organization system. | Read more
Organization Performance Review
Scorecard results are analyzed and periodically reviewed by the leaders at all levels who then revise the action plans and operations as necessary to accomplish the strategy. While much of the learning during these reviews is limited to single-loop learning and keeping things on track, occasionally the dialogue will result in an examination of the underlying assumptions and double-loop learning that enables the team to address root causes and prevent similar future problems. This fact-based approach to management includes organization performance analysis that informs the reinforcement of the desired behaviors. | Read more
There is an old saying, “what gets measured gets done and what gets rewarded gets repeated!” Reinforcing behavior is based on the progress towards the overall strategy and includes recognition, rewards, promotions, and sometimes the removal of individuals. All too often, the incentive systems are counter-productive and drive behaviors that are inconsistent with the overall compelling directive and strategy. So caution is warranted when evaluating and incentivizing performance. High performing organizations align their incentives to ensure individual performance is supporting the best overall system performance. | Read more
Learn + Improve
Successful leaders of transformation are never satisfied with the organization’s performance and learn from experience. To fully develop the organization’s systems, culture, and individual people requires that the organization learn not only from their successes but also from their failures. Organizations that have achieved sustainable excellence by learning from success and failure did so using four common methods or approaches, including strategic management cycle, organization assessment and improvement, benchmarking, and continuous improvement. These methods are often integrated into the other eight leadership system components. | Read more
This description presents the nine activities in a sequence. However, leading an organizational transformation is not a linear process. So, think about the leadership system of nine activities as a flexible framework that can be entered and exited at any place in the system. How a leader implements these nine activities varies widely and depends on the design of each system component and the leadership style. In the coming weeks, we will focus on each of the nine leadership system components.
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Enjoy the journey,