CHAPTER TWO

LEADERSHIP
TOPICS OF DISCUSSION

 Understand the definition of a leader and the characteristics of a quality leader

 Importance of principle-centered leadership based on character ethics rather than personality
ethics
 Role of leadership in building a foundation of ethical standards in the organization
 Appreciate and understand Deming’s philosophy and 14-points as a framework for TQM
 Importance of commitment and involvement of leadership and management in TQM
implementation
 Understand the structure and functions of quality council in order to drive TQM implementation
 Setting direction for TQM efforts, creating vision, mission, quality policy and establishing strategic
objectives
LEADERSHIP

 “A great leader is one who is not only good in creating vision, creating the
big picture, but also ensuring that he goes into the nitty-gritty, into the
details of making sure that his vision is actually translated into reality
through excellence of execution.
 In other words, great leaders have great vision, great imagination, great
ideas but they also implement these ideas through hard work,
commitment and flawless execution. In doing so, they motivate thousands
of people
CRITERIA OF LEADERSHIP
 The criteria of Ramkrishna Bajaj National Quality Award (RBNQA) are based on Malcolm Baldrige Award. These are
built upon the following set of interrelated core values and concepts:
 Visionary leadership
 Customer-driven excellence
 Organizational and personal learning
 Valuing employees and partners
 Agility
 Focus on the future
 Managing for innovation
 Management by fact
 Social responsibility
 Focus on results and creating value
 Systems perspective
CHARACTERISTICS OF QUALITY LEADERS

They give priority

They empower, rather They emphasize
attention to external
than control, improvement rather
and internal customers
subordinates. than maintenance.
and their needs.

They encourage They train and coach,

They emphasize
collaboration rather rather than direct and
prevention.
than competition. supervise.
CHARACTERISTICS OF QUALITY LEADERS

They continually
They continually
They learn from demonstrate their
try to improve
problems commitment to
communications
quality.

They choose They establish

They encourage
suppliers on the organizational
and recognize team
basis of quality, not systems to support
effort
price. the quality effort.
REQUIREMENT OF LEADERSHIP

 In order to become successful, leadership requires an intuitive understanding

of human nature—the basic needs, wants, and abilities of people. To be
effective, a leader understands that:
 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.
 3. People like to hear a kind word of praise. Catch people doing something
right, so you can pat them on the back.
 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 the
leader’s actions.
THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE

 A habit is the intersection of knowledge, skill, and desire. Knowledge is the what to
do and the why; skill is the how to do; and desire is the motivation or want to do. In
order for something to become a habit you have to have all three.
 The 7 Habits are a highly integrated approach that moves from dependency (you take
care of me) to independence (I take care of myself) to interdependence (we can do
something better together).
 The first three habits deal with independence—the essence of character growth.
Habits 4, 5, and 6 deal with interdependence—teamwork, cooperation, and
communication. Habit 7 is the habit of renewal.
HABIT 1: BE PROACTIVE

 Being proactive means taking responsibility for your life—the ability to choose the
response to a situation.
 Proactive behavior is a product of conscious choice based on values, rather than
reactive behavior, which is based on feelings.
 Reactive people let circumstances, conditions, or their environment tell them how to
respond.
 It’s not what happens to us but our response that differentiates the two behaviors.
 No one can make you miserable unless you choose to let them.
HABIT 2: BEGIN WITH THE END IN MIND

 The most fundamental application of this habit is to begin each day with an image, picture, or paradigm
of the end of your life as your frame of reference. Each part of your life can be examined in terms of
what really matters to you—a vision of your life as a whole.
 All things are created twice—there’s a mental or first creation and a physical or second creation to all
things.
 To build a house you first create a blueprint and then construct the actual house. You create a speech
on paper before you give it.
 If you want to have a successful organization you begin with a plan that will produce the appropriate
end; thus leadership is the first creation, and management, the second. Leadership is doing the right
things and management is doing things right.
HABIT 3: PUT FIRST THINGS FIRST

 Habit 1 says, “You’re the [Link] are in charge.”

 Habit 2 is the first creation and is based on imagination— leadership based on values.
 Habit 3 is practicing self-management and requires Habits 1 and 2 as prerequisites. It is the day-by-day,
moment-by-moment management of your time.
 The Time Management Matrix:
Urgent means it requires immediate attention, and important has to do with results that contribute to
your mission, goals, and values. Effective, proactive people spend most of their time in Quadrant II,
thereby reducing the time spent in Quadrant I. Four activities are necessary to be effective. First, write
down your key roles for the week (such as research manager, United Way chairperson, and parent).
Second, list your objectives foreach role using many Quadrant II activities. These objectives should be tied
to yourpersonal goals or philosophy developed in Habit 2. Third, schedule time to complete the
objectives. Fourth, adapt the weekly schedule to your daily activities.
HABIT 3: PUT FIRST THINGS FIRST
HABIT 4: THINK WIN-WIN

 Win-Win is a frame of mind and heart that constantly seeks

mutual benefit in all human interactions. Both sides come out
ahead; in fact, the end result is usually a better way.
 It takes great courage as well as consideration to create mutual
benefits, especially if the other party is thinking Win-Lose.
 Win-Win embraces five interdependent dimensions of life—
character, relationships, agreements, systems, and processes.
 Character involves the trains of integrity; maturity, which is a
balance between being considerate of others and the courage to
express feelings; and abundance mentality, which means that
there is plenty out there for everyone.
HABIT 4: THINK WIN-WIN

 Relationships means that the two parties trust each other and are
deeply committed to Win-Win.
 Agreements require the five elements of desired results, guidelines,
resources, accountability, and consequences.
 Win-Win agreements can only survive in a system that supports
it—you can’t talk Win-Win and reward Win-Lose.
 In order to obtain Win-Win, a four-step process is needed: (1) see
the problem from the other viewpoint, (2) identify the key issues and
concerns, (3) determine acceptable results, and (4) seek possible
new options to achieve those results.
HABIT 5: SEEK FIRST TO UNDERSTAND, THEN TO BE UNDERSTOOD

 Seek first to understand involves a paradigm shift since we usually try to be understood first.
 Empathic Listening is the key to effective communication. It focuses on learning how the other person
sees the world, how they feel. The essence of Empathic Listening is not that you agree with someone;
it’s that you fully, deeply understand that person, emotionally as well as intellectually.
 Next to physical survival the greatest need of a human being is psychological survival—to be
understood, to be affirmed, to be validated, to be appreciated.
 The second part of the habit is to be understood. Covey uses three sequentially arranged Greek
words— ethos, pathos, and logos. Ethos is your personal credibility or character; pathos is the
empathy you have with the other person’s communication; and logos is the logic or reasoning part of
your presentation.
HABIT SIX: SYNERGY

 Synergy means that the whole is greater than the parts. Together, we can accomplish
more than any of us can accomplish alone. This can best be exemplified by the
musical group The Beatles, who as a group created more music than each individual
created after the group broke up. The first five habits build toward Habit 6.
 It focuses the concept of Win/Win and the skills of empathic communication on
tough challenges that bring about new alternatives that did not exist before. Synergy
occurs when people abandon their humdrum presentations and Win/Lose mentality
and open themselves up to creative cooperation. When there is genuine
understanding, people reach solutions that are better than they could have achieved
acting alone.
HABIT 7: SHARPEN THE SAW (RENEWAL)

 Habit 7 is taking time to Sharpen the Saw so it will cut faster.

 It is personal PC—preserving and enhancing the greatest asset you have, which is you. It’s renewing
the four dimensions of your nature—physical, spiritual, mental, and social/emotional.
 All four dimensions of your nature must be used regularly in wise and balanced ways. Renewing the
physical dimension means following good nutrition, rest and relaxation, and regular exercise.
 The spiritual dimension is your commitment to your value system. Renewal comes from prayer,
meditation, and spiritual reading.
 The mental dimension is continuing to develop your intellect through reading, seminars, and writing.
These three dimensions require that time be set aside—they are Quadrant II activities.
 The social and emotional dimensions of our lives are tied together because our emotional life is
primarily, but not exclusively, developed out of and manifested in our relationship with others. While
this activity does not require time, it does require exercise.
ETHICS

 Ethics is a body of principles or standards of human conduct that

govern the behavior of individuals and organizations.
 It is knowing what is the right thing to do and is learned when one is
growing up, or at a later date during an organization’s ethics training
program.
 Ethics can mean something different to different people, especially
given an organization’s international workforce and the varying
cultural norms.
 Because individuals have different concepts of what is right, the
organization will need to develop the standards or code of ethics for
the organization.
THE ROOT CAUSES OF UNETHICAL BEHAVIOR

 Much of the unethical behavior in organizations occurs when:

 1. Organizations favor their own interests above the well-being of their customers,
employees, or the public.
 2. Organizations reward behavior that violates ethical standards, such as increasing
sales through false advertising.
 3. Organizations encourage separate standards of behavior at work than at home,
such as secrecy and deceit versus honesty.
 4. Individuals are willing to abuse their position and power to enhance their interests,
such as taking excessive compensation for themselves off the top before other
stakeholders receive their fair share.
THE ROOT CAUSES OF UNETHICAL BEHAVIOR

 5. Managerial values exist that undermine integrity, such as the pressure managers
exert on employees to cover up mistakes or to do whatever it takes to get the job
done, including cutting corners.
 6. Organizations and individuals overemphasize the short-term results at the expense
of themselves and others in the long run; for example behavior is good based on the
degree of utility, pleasure, or good received, regardless of the effect on others.
 7. Organizations and managers believe their knowledge is infallible and miscalculate
the true risks, such as when financial managers invest organizational funds in high-risk
options trading.
ETHICS MANAGEMENT PROGRAM

 An ethics management program needs to address pressure, opportunity, and [Link]

ethical behavior requires commitment, new policies and procedures, continuous improvement, and
investments in appraisal, prevention, and promotion.
 The first step is appraisal, which is the analysis of the costs associated with unethical behavior. These
costs can be divided into the three root causes of pressure, opportunity, and attitude
 The second step is prevention, which is the development of a system that will minimize the costs.
Because management has a good idea of the appraisal costs, this step can proceed concurrently with
Step 1.
 The third step is promotion, which is the continuous advertising of ethical behavior in order to
develop an ethical organizational culture that is clear, positive, and effective.
1. APPRAISAL

Costs from Costs from Costs from

Pressure Opportunity Attitude
2. PREVENTION

Pressure can be addressed by being involved in the development of goals and values and
developing policies that allow for individual diversity, dissent, and decision-making input.

Opportunity can be addressed by developing policies that encourage and protect

whistleblowers and require the existence of ombudsmen who can work confidentially with
people to solve ethical problems internally.

Attitude can be addressed by requiring ethics training for all personnel, recognizing ethical
conduct in the workplace, requiring performance appraisals to include ethics, and encouraging
open discussion concerning ethical behavior issues.
3. PROMOTION
To be clear the philosophy needs to be written, with input from all
personnel, and posted. Standardized ethics training should be given to
everyone to:
• (1) teach them how to clarify ethical issues,
• (2) encourage them to get the facts before acting,
• (3) encourage them to consider all the consequences before acting, and
• (4) show them how to test their actions in advance. This testing can be accomplished by asking (1) Is it legal?
(2) Is it right? (3) Is it beneficial for all involved? and (4) How would I feel if it was published on the front page
of the newspaper?

To be positive, the culture should be about doing what is right, encouraging

principled organizational dissent, and rewarding ethical behavior.

To be effective, the philosophy must be set and adopted by senior management, with
input from all personnel. Senior management should act as they would want others
to act and make no exceptions.
THE DEMING PHILOSOPHY
THE DEMING PHILOSOPHY
 Deming’s philosophy is given in his 14 points. Most of these points were given in a seminar for 21 Presidents of
leading Japanese industry in 1950. The rest were developed and the original ones modified over a period of three
decades.

1. Create and Publish the Aims and Purposes of the Organization

2. Learn the New Philosophy

3. Understand the Purpose of Inspection

4. Stop Awarding Business Based on Price Alone

5. Improve Constantly and Forever the System

THE DEMING PHILOSOPHY
8. Drive Out Fear, 9. Optimize the
7. Teach and
6. Institute Create Trust, and Efforts of Teams,
Institute
Training Create a Climate Groups, and Staff
Leadership
for Innovation Areas

11a. Eliminate 12. Remove

10. Eliminate 11b. Eliminate
Numerical Barriers That Rob
Exhortations for Management by
Quotas for the People of Pride of
the Work Force Objective
Work Force Workmanship

13. Encourage
14. Take Action to
Education and
Accomplish the
Self-Improvement
Transformation
for Everyone
IMPLEMENTATION

 From the book

QUALITY COUNCIL
 In a typical organization the council is composed of the chief executive officer (CEO), the senior
managers of the functional areas, such as design, marketing, finance, production, and quality; and a
coordinator or consultant. If there is a union, consideration should be given to having a representative
on the council.
 A coordinator is necessary to assume some of the added duties that a quality improvement activity
requires. The individual selected for the coordinator’s position should be a bright young person with
executive potential. That person will report to the CEO.
 The responsibility 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 responsibilities.
The coordinator’s activities are to assist the team leaders, share lessons learned among teams, and
have regular leaders ’meetings.
 In smaller organizations where managers may be responsible for more than one functional area, the
number of members will be smaller. Also, a consultant would most likely be employed rather than a
coordinator.
DUTIES OF QUALITY COUNCIL
 In general, the duties of the quality council are to:
 1. Develop, with input from all personnel, the core values, vision statement, mission statement, and
quality policy statement.
 2. Develop the strategic long-term plan with goals and the annual quality improvement program with
objectives.
 3. Create the total education and training plan.
 4. Determine and continually monitor the cost of poor quality.
 5. Determine the performance measures for the organization, approve those for the functional areas, and
monitor them.
 6. Continually determine those projects that improve the processes, particularly those that affect
external and internal customer satisfaction.
 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.
MEETING AGENDA OF QUALITY COUNCIL
 Once the TQM program is well established, a typical meeting agenda might have the
following items:
 Progress report on teams.
 Customer satisfaction report.
 Progress on meeting goals.
 New project teams.
 Recognition dinner.
 Benchmarking report.

 Eventually, within three to five years, the quality council activities will become so
ingrained in the culture of the organization that they will become a regular part of the
executive meetings. When this state is achieved, a separate quality council is no longer
needed. Quality becomes the first item on the executive meeting agenda.
CORE VALUES, CONCEPTS AND FRAMEWORK OF
TQM
 Customer- Organizational
Visionary
Driven and Personal
Leadership
Excellence Learning

Valuing
Focus on the
Employees Agility
Future
and Partners
CONCEPTS OF TQM

Public
Managing for Management by
Responsibility
Innovation Fact
and Citizenship

Focus on
Systems
Results and
Perspective
Creating Value
 QUALITY POLICY STATEMENT
 The quality policy is a guide for everyone in the organization as to how they should provide products
and service to the customers.
 It should be written by the CEO with feedback from the work force and be approved by the quality
council.
 Common characteristics are:
✓ Quality is first among equals.
✓ Meet the needs of the internal and external customers.
✓ Equal or exceed the competition.
✓ Continually improve the quality. Include business and production practices.
✓ Utilize the entire work force.
 QUALITY POLICY STATEMENT EXAMPLE

 Xerox is a quality company. Quality is the basic business principle for

Xerox. Quality means providing our external and internal customers
with innovative products and services that fully satisfy their
requirements. Quality is the job of every employee.
 A MORE ELABORATE QUALITY POLICY STATEMENT IS

 Tata Motors is committed to maximizing customer satisfaction and strives to achieve

the goal of excellence, by continual improvement, through ongoing design and
development, manufacture and sale of reliable, safe, cost-effective, quality products
and services of international standards, using environmentally sustainable
technologies, for improving levels of efficiency and productivity within its plants and
ancillaries. Tata Motors also has commitment towards improving the quality of life of
its employees, both within and outside its plants and offices, through improved work
practices and social welfare schemes.
 A MORE ELABORATE QUALITY POLICY STATEMENT IS

 Tata Motors is committed to maximizing customer satisfaction and strives to achieve

the goal of excellence, by continual improvement, through ongoing design and
development, manufacture and sale of reliable, safe, cost-effective, quality products
and services of international standards, using environmentally sustainable
technologies, for improving levels of efficiency and productivity within its plants and
ancillaries. Tata Motors also has commitment towards improving the quality of life of
its employees, both within and outside its plants and offices, through improved work
practices and social welfare schemes.
 QUALITY POLICY STATEMENT

 In summary, the quality statements consist of the core values and

concepts given in a previous section, the vision statement, the mission
statement, and the quality policy statement. The core values and
concepts should be condensed considerably for simplicity and
publication.
 A quality policy statement must includes vision, mission, quality policy,
and core values.
 STRATEGIC PLANNING
 Many organizations are finding that strategic quality plans and business
plans are inseparable.
 For instance, at Corning, the 1995 Malcolm Baldrige National Quality
Award winner, if you ask them to show you their quality strategy, they
will show you their business strategy; if you ask them to show you their
quality plans, they will show you their business plans. In fact, the term
quality is not used too much.
 The time horizon for strategic planning is for three to ten years, and
short-term planning is for one year or less.
 GOALS AND OBJECTIVES
 Goals and objectives have basically the same meaning. However, it is possible
to differentiate between the two by using goals for long-term planning and
objectives for short-term planning.
 The goal is to win the war; the objective is to capture the bridge.
 Concrete goals are needed to provide a focus, such as improve customer
satisfaction, employee satisfaction, and processes.
 Goals can force changes in leadership style from reward and punishment to
identifying and improving system problems.
 Goals must be based on statistical evidence. Without statistical knowledge of
the system, goals merely reflect the assumption that slogans, exhortations, and
hard work will miraculously change the system.
GOALS AND OBJECTIVES CONTINUED…
 Goals must be definitive, specific, and understandable, using concrete
results rather than behaviors or attitudes.
 The most important characteristic of goals is that they be measurable.
Only measurable goals can be evaluated.
 Goals must have a plan or method with resources for its achievement. If
there is not a cause-and-effect relationship between the goals and the
method, then the goal is not a valid one.
 In addition, a specific timeframe or deadline for achieving the goal should
be given.
GOALS AND OBJECTIVES CONTINUED…

 Goals must be challenging yet achievable. Those individuals, work groups,

departments, and functional areas that are affected by the goals should
be involved in their development.
 Stretch goals are satisfactory, provided they are based on benchmark
data.
 The characteristics of objectives are identical to those given
here for goals. They are operational approaches to attain the
goals.
 SEVEN STEPS TO STRATEGIC PLANNING
 There are seven basic steps to strategic quality planning. The process starts
with the principle that quality and customer satisfaction are the center of an
organization’s future. It brings together all the key stakeholders.
1. Customer Needs. The first step is to discover the future needs of the
customers. Who will they be? Will your customer base change? What will
they want? How will the organization meet and exceed expectations?
2. Customer Positioning. Next, the planners determine where the
organization wants to be in relation to the customers. Do they want to
retain, reduce, or expand the customer base? Products or services with poor
quality performance should be targeted for breakthrough or eliminated. The
organization needs to concentrate its efforts on areas of excellence.
 SEVEN STEPS TO STRATEGIC PLANNING
3. Predict the Future. Next, the planners must look into their crystal
balls to predict future conditions that will affect their product or service.
Demographics, economic forecasts, and technical assessments or
projections are tools that help predict the future. More than one
organization’s product or service has become obsolete because it failed to
foresee the changing technology. Note that the rate of change is continually
increasing.
4. Gap Analysis. This step requires the planners to identify the gaps
between the current state and the future state of the organization. An
analysis of the core values and concepts, given earlier in the chapter, is an
excellent technique for pinpointing gaps.
 SEVEN STEPS TO STRATEGIC PLANNING
5. Closing the Gap. The plan can now be developed to close the gap by establishing goals and
responsibilities. All stakeholders should be included in the development of the plan.
6. Alignment. As the plan is developed, it must be aligned with the mission, vision, and core
values and concepts of the organization. Without this alignment, the plan will have little chance
of success.
7. Implementation. This last step is frequently the most difficult. Resources must be allocated
to collecting data, designing changes, and overcoming resistance to change. Also part of this step
is the monitoring activity to ensure that progress is being made. The planning group should
meet at least once a year to assess progress and take any corrective action.
Strategic planning can be performed by any organization. It can be highly effective,
allowing organizations to do the right thing at the right time, every time.