Webinar for the Wisconsin Center for Performance Excellence on May 14, 2019.
The [re]design of organizational systems requires that the designer combine systems thinking with design thinking in a process that is both creative and inductive and, at the same time, scientific and deductive. This presentation applies the design framework from Latham (2012) to the design of a custom leadership system.
Speaker Notes
– Some of the Notes are from Chapter 6 in the [Re]Create book.
1. Purpose and Requirements
An explicit leadership system (LS) has several purposes: aligning and integrating the enterprise management systems, making leadership decisions and actions explicit so they can be communicated, and developing leaders at all levels.
Align and Integrate
A key aspect of leadership is the ability to influence the actions of people and engage leaders and the workforce in purposeful activities that are aligned with and contribute to the improvement of the organization’s performance. An explicit leadership system enables the alignment and integration of various other management activities, practices, and processes into a coherent and congruent approach. As one CEO noted, it provides the glue that holds the more extensive system together. As another CEO mentioned, “I think that most people don’t understand all the pieces… They understand them, but they don’t fit them together…and show how they all fit together to work together.”
Also, when performance measurement is integrated into the leadership system, it helps to drive results that include both breakthroughs and incremental improvements. As one CEO responded when asked about the purpose of his LS: “…number one, I think it drives results.” So one purpose of the LS is to integrate and align the organization’s strategy, action, and results.
Make Leadership Decisions and Actions Explicit
Another purpose is to make the decisions and actions of leaders explicit so they can be communicated, assessed, and improved. As one CEO said, “You got to stay in touch, you’ve got to have the employees engaged, and you’ve got to make sure that the systems tools are being used.”
One purpose of the LS is to provide a framework for the purposeful interaction of leaders with people throughout the organization. A formal LS enables leaders to systematically review progress and work with people to adjust their actions to improve performance and progress. Another CEO mentioned, “Deming says if you can’t…describe what you’re doing as a process, then you don’t know what you’re doing.” Another CEO recalled when the consultant asked him to describe his leadership system: “I began to describe it, and she said now draw it for me. I really couldn’t draw it.” Without an explicit system, it is challenging to communicate your leadership approach to others, examine your approach, reflect on it, improve it, and teach it to others.
Develop Leaders at All Levels
An explicit LS enables the development of leaders by helping them think about how they integrate their leadership style with the leadership activities described in the leadership system. Several CEOs have found that an explicit leadership system “made it easier for people to understand how to lead and what we meant by it.” One CEO noted that “after we came up with the leadership system, we realized we had all the pieces, but we didn’t have a way to train people and make this a living leadership system, one that you could point to and say this is how we think, and this is how we do things.” Developing a pipeline of leaders helps ensure continuity when leaders turn over. This continuity helps to keep your organization from being dependent on any individual leader.
2. Nature of the System
A leadership system is a combination of knowledge and creative components that requires a high level of customization depending on the particular leader and follower combination. Some have proposed that you can’t systematize leadership. However, knowledge and creative systems often do not require formal steps in a rigid sequence.
Physical – When designing physical systems such as those that bend metal, mix chemicals, or assemble parts we identify the physical nature of the system. Those are the components that obey the immutable natural laws of science. The physical dimension is NOT APPLICABLE to leadership. Leadership is a social process. The physical laws of nature are not considerations for the design of a leadership system.
Knowledge and Information – Leaders need information to analyze problems, make decisions, and communicate those decisions. The central method leaders use to influence followers is communication. Leadership is essentially a communication process and, thus at its core, an information process.
Creative – Given the ambiguity and uncertainty in leading modern organizations, creativity is an essential aspect of developing strategies, solutions to organizational problems, etc., to proactively address the future and to adapt to unexpected events as they occur. It also impacts the type and amount of structure appropriate for the system design.
Bespoke – The wide variety of followers and situations calls for a system that supports custom and flexible leadership approaches.
A leadership system is, by its nature, a combination of knowledge processes, leadership practices, and cultural values and norms. Consequently, the design of an effective LS is characterized by flexible frameworks, principles, information, and activities that enhance the art of leadership. Once one understands the purpose, requirements, and nature of the system, the next question is: What do we already know about this type of system?
3. Theories and Concepts
The leadership system that is described in the [Re]Create book Chapters 2 through 10 is a result of both practice and a CEO study that was published in 2013 (Latham, 2013a, 2013b). According to our research, there were four critical leadership theories that were most likely to inform sustainable excellence, including transformation, transactional, servant, and spiritual leadership. For more on the specific links between these theories and the leadership system, see Latham (2013a and 2013b).
4. Inspiring Examples
In the beginning, which seems to date back to 1997 and Boeing Airlift and Tanker’s efforts to develop a leadership system, a few of the early adopters had to start from scratch without the benefit of examples to follow (e.g., Spong and Collard, 2009). These trailblazers developed leadership systems that were conceptual diagrams of the critical activities and their relationships using only their experience, ingenuity, the requirements from the Baldrige criteria, and advice from consultants.
Once these early examples were published and presented at the annual Quest for Excellence Conferences, other organizations were able to leverage these examples and creatively adapt the concepts to their organizations. One CEO noted that he “…then read every Baldrige application I could get because those intrigued me because I really got into these categories and specifically leadership, customer market focus, and process management – it really, really intrigued me a lot.” Leadership System examples are available from a variety of sources, including Award Application Summaries for the MBNQA recipients since 1999, which are available free for download from the NIST website.
5. Unique Context
While leadership systems often include similar components across a variety of organizations and industries, the details of these components vary depending on several context factors.
Workforce profile – The types of work and qualifications of the workforce will influence the appropriate leadership approach, including empowerment, communication, etc.
Culture – Current and desired culture (mission, vision, values), stakeholder segments, and needs all influence critical components of the leadership system.
Organization size and geography – Are leaders and followers in the same physical location, or are they virtual? What country cultures are included?
The context of the organization not only indicates what is relevant and important to the particular organization but also helps inform the identification of key characteristics in the design of the leadership system. These characteristics are often called design principles.
6. Design Principles
Balance – The leadership system has to balance the needs of the stakeholders throughout the activities, including the critical cornerstones of stakeholders, strategy, systems, and the scorecard. The concept of balance is integrated into decision-making throughout the leadership system.
Congruence – The nine critical components of the leadership system described in [Re]Create Chapters 2 through 10 are all interrelated.
Convenience – While it is easy to make the leadership system complex, if you want people to use it, you will want to keep the fundamentals as simple as possible. The good news is the details of systems are documented and do not need to be remembered if leaders embed the leadership system in the culture from top to bottom.
Coordination – The alignment and integration notes in the [Re]Create book Chapters 2 through 10 address the alignment (congruence) and integration of the components.
Elegance – The leadership system is a system of systems and, thus, challenging to simplify at the strategic level. However, the fundamentals of each activity can be designed to be only as complicated as required by the context. In the case of the leadership system, leadership at the top of the organization is complex, but you can take the same basic leadership system structure and apply it in much less complicated ways at lower levels in the organization.
Human – The design of the leadership system must be sufficiently flexible to allow for individual leaders to make it their own. While all work is personal, leadership is particularly personal for both the leader and the follower. The leadership system needs to allow for this flexibility so the leader can use it effectively with a wide variety of people and situations.
Learning – The leadership system has learning built into several key components, and it is specifically built into the organization’s performance review process and the learning and improvement processes.
Sustainability – The leadership system integrates stakeholder value for all six stakeholder groups into all the leadership activities.
7. System Integration
The leadership system is supported by and integrated with several other major management systems, including the strategic management system, information and analysis system, customer and stakeholder knowledge system, operations system, human resource system, enterprise scorecard, performance review system, and governance system. As one CEO noted, “The first thing, I think you’ve got to see the connectivity in these things. I think you got to be a systems thinker so that you see that if I push in here, it’s going to push out somewhere else, so these things are related, and you got to see them as a system.”
The nine elements of the leadership system presented in the [Re]Create book Chapters 2 through 10 are all interconnected with their more extensive system. For the details, see the section titled “Align and Integrate” near the end of each of those chapters. The leadership system at the upper echelon is directly linked to the strategy development and deployment systems. Some CEOs have difficulty separating the leadership system from the strategic management system. As one CEO noted, “In fact, for me, I don’t think you can really separate category 1 [Leadership] and category 2 [Strategic Planning] because to me they are so closely intertwined that I pretty much view them as the leadership process for us.”
One of the areas often missed by the design team is the linkage to and congruence with the compensation and incentives systems. Incentives can be powerful influences on human behavior but are often at odds with the overall direction of the organization. Successful implementation and sustainability of the new design are dependent on the design of the related human resource systems and, in particular, the incentive system. It is this discovery activity that has the most significant impact on the design team’s ability to LEAP the maturity levels and develop an aligned and integrated design.
References
Latham, J. R. (2013a). A Framework for Leading the Transformation to Performance Excellence Part I: CEO Perspectives on Forces, Facilitators, and Strategic Leadership Systems. Quality Management Journal, 20(2), 22.
Latham, J. R. (2013b). A Framework for Leading the Transformation to Performance Excellence Part II: CEO Perspectives on Leadership Behaviors, Individual Leader Characteristics, and Organizational Culture. Quality Management Journal, 20(3), 22.
Latham, J. R. (2012). Management System Design for Sustainable Excellence: Framework, Practices, and Considerations. Quality Management Journal, 19(2), 15.
Spong, E. D. and D. J. Collard (2009). The making of a world-class organization. Milwaukee, ASQ Quality Press.
John Latham 