The Senior Leadership Challenge

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• The Senior Leadership Challenge
• David Spong

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• The Leaders Role

Captain The Leader
Uncharted Waters
Steering
Communications
Entertainment
Navigation
Catering
Engines
3
Leadership Impacts the Bottom Line
5M
20
19
Turnover Percent
Net Profit
4M
18
2.4 M
4.5 M
3M
16
2M
14
1M
14
0
12
-1M
9
10
-1.7 M
8
100
90
Intention to stay with Company
82
Customer Satisfaction
79
80
80
70
60
60
50
50
50
40
40
21
20
20
19
20
0
10
Leadership Effectiveness
Extraordinary Leader, Zenger Folkman (2002)
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Culture A Set of Shared Vision/Values/Beliefs/Go
als
Shared Value Filter
Integrity
Learning
The Organization
Corporate Citizen
Quality
Stakeholder Requirements Expectations
Diversity
Teamwork
INVOLVE AND COMMUNICATE
Safety
Innovation
Customer Satisfaction
Sharing Supportive
Agility
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How do you achieve a vision?
W h a t
H o w

Strategies/ High Level Implementation Plans
Detailed Implementation Plans
Strategic Intent
Execution
Vision
T h i n k i n g
P l a n n i n g
Doing
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The Challenge at Aerospace Support
Aerospace Support 2003 Recipient
Manufacturing
Service
Complex Bus./Sites/Functions
Primarily one program
Primarily one
Dispersed 130 locations
Stable
Chaos
Yes
Not recognized
None
Some
Few
Many
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State of the Inherited Leadership Team

• Prior Leader Autocratic
• Un-empowered
• Dispirited/untrusting
• Mostly Non-believers
• Did not understand my Leadership style

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What Spong thinks he did!

• Personal Commitment
• Knowledgeable
• Staffed BE Office with
• Believers
• Experts
• Consultants
• Lots of personal time
• Dealt with non-believers

Consistent Persistent with Passion
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All the Usual Stuff!

• Met with each member of the Leadership Team
• Met with the Customers
• Held meetings with the People
• Tried to understand the Business

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Initial focus

• Created a Leadership System and Operating
  Principles
• Identified and Deployed Overall Initiatives
• Employee Involvement
• Process Based Management
• Management by Information
• Assigned Executive Champions for Initiatives
  Criteria
• Adopted Baldrige Criteria as the Business Model
• Assessed the organization by sites and overall

• Customer Satisfaction
• Enterprise Planning Process

Established a culture of excellence and
continuous improvement
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Our Leadership System
GP30117.ppt
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Business Excellence Office
AS
Business Excellence Debbie Collard
Initiatives Deployment
Business Excellence Organization Reporting to the
Office of the President
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Business/Site/Functions RAA
CLEARLY DEFINED INTEGRATED ROLES FACILITATE
EFFECTIVE OPERATIONS
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The Leadership Shadow
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Executive Champion Requirements

• Learn understand the criteria for your assigned
  element
• Identify needed improvements
• Work with Business Excellence Office to drive
  improvements
• Communicate throughout the organization
• Champion world-class approaches lead by example
• Make a personal commitment to the Leadership Team
  for the improvement of your element

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Focused Offsites

• Not a Business Performance Review
• Business Model
• Internal Assessment
• Gaps
• Process to close gaps
• Progress

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Focused Survey

• Aerospace Support
• 58 Questions
• 3 Narrative questions
• 28 Focused questions
• Results to the Business, Program,
• Function, Site, to the manager level
• with 5 or more D/R
• Results actionable
• Summary for 17 key issues
• Exec summaries for each Bus,
• Site, Function

• IDS
• 58 Questions
• 1 Narrative question
• Results to only the Business,
• Function, Department? Level
• Results not actionable

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Leadership Drives the Employee Satisfaction Index
90
Great Leadership Results in Top Quartile
Satisfaction
80
78
73
70
71
66
Good Leadership Results in Okay Satisfaction
62
60
ESI Percent Positive
60
58
52
50
47
Poor Leadership Results in Low Satisfaction
40
39
30
10
9
8
7
6
5
4
3
2
1
Leadership Effectiveness Deciles
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Leadership in Action
Leaders expectations supported
Case I Leader supports thru visible actions
Word of mouth

• Leader
• communicates
• written/spoken
• expectations
• Vision
• Values
• Strategy
• Mission
• Initiatives

Case II Leader does not visibly support
Grapevine in action
Leaders expectations not supported
Poor Results
CC30181004
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Leadership Communication

• The first time you say something, its heard
• The second time its recognized
• And the third time, its learned
• William H Rastetter, CEO, Idec Pharmaceuticals
  Corp.

Relentless Repetition!
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Leadership Required
Projects are most successful when top management
takes ownership
Deming
How Good Others Think You Are
3
2
1
How Good You Think You Are
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Boeing Aerospace SupportsRevenue Performance
Started Baldrige
2000
2001
2002
2003
PLAN
ACTUALS
AVG GROWTH
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Boeing Aerospace SupportsEarnings Performance
Started Baldrige
2000
2001
2002
2003
PLAN
ACTUALS
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Boeing Aerospace Supports employees are more
motivated
Started Baldrige
66
ESI
62
EI
50
58
54
50
2003
2002
2001
1999
2000
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Summary
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Summary
CC40170002.ppt
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BACK-UP
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Leadership Effectiveness (LE)

• My immediate supervisor/manager seriously
  considers my ideas and opinions.
• My immediate supervisor/manager effectively
  addresses employee performance issues.
• Supervisor/manager regularly communicates needed
  information to our work group.
• Supervisor balances concern for productivity
  results with concern for individual needs.
• Supervisor/manager keeps people focused on the
  critical tasks to be accomplished.
• Supervisor/manager sets a good example and models
  desired behavior for his/her work group.
• Supervisor/manager makes constructive efforts to
  change and improve based on feedback from others.
• Supervisor is able to get people to stretch
  reach goals beyond what they thought possible.

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Employee Satisfaction Index (ESI)

• I have enough information to do my job well.
• Overall, I feel my immediate supervisor/manager
  is doing a good job.
• I am given a real opportunity to improve my
  skills in Boeing.
• I am satisfied with the recognition I receive for
  doing a good job.
• The people I work with cooperate to get the job
  done.
• Boeing does a good job in providing job security
  for people like myself.
• Conditions in my job allow me to be about as
  productive as I could be.
• The amount of pay I get on my job is good.
• Boeing is making the changes necessary to compete
  effectively.
• 68. My job makes good use of my skills and
  abilities.

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Employee Involvement (EI)

• I am satisfied with my involvement in decisions
  that affect my work.
• I am actively involved in decision-making at the
  level of my work group.
• I feel encouraged to come up with new and better
  ways of doing things.
• My immediate supervisor/manager seriously
  considers my ideas and opinions.
• 3. I have the authority to make decisions that
  improve the quality of my work.

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Definition of a Zealot

• A person who believes that using the
• Malcolm Baldrige Criteria will drive an
• organization to achieve world class
• business results
• and will lead their organization
• in its use

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Conversion to Zealots
Lets use our future leaders!
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Personal Quality Journey
10, Zealot/Proselytize
Baldrige Principles
5, Believer/Influence
0, Non-Believer/Resist
Time
Where Are You?
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Zealot Distribution
Mean 5.8
Number
Rating
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How best to achieve conversion to Zealots

• 2x4s ?
• Leadership Passion ?
• Start the Journey ?
• Have a Plan ?

• Get Trained ?
• Quest for Excellence ?
• Positive Results ?
• Go for an award

Yes to all of the above, except no 2x4s and
especially go for an award to get Feedback
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Aerospace Support Improvements
700
AS Baldrige-based Assessment Score State/Local/Bal
drige-based Score by Major Site Award Recipient
BAL
St L
600
Wichita
So Cal
500
Aerospace Support Baldrige Win
BASC
Ft Walton Beach
Mesa
Oklahoma City
400
Baldrige Mid-Range Score
300
400 Points!
Philadelphia
200
Oklahoma City
0
100
2001
2003
2002
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• Baldrige Criteria Table Exercise

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What is Baldrige?

• A structured framework to facilitate
• continuous improvement
• Emphasis is on processes

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The Malcolm Baldrige Framework
Business Results
Process Management
Using processes to manage continuous
improvement
Human Resource Focus
How an organization motivates and enables
employees to utilize full potential
Measurement, Anal, Knowledge Mgmt
Information management measurement and analysis
of performance
How an org builds relationships to acquire,
satisfy, and retain customers
Customer Mkt Focus
Strategic Planning
How an organization establishes and deploys
strategic objectives
Leadership
A leaders role in setting the current and future
environment
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Instructions

• The following slide provides sample questions
  from the Malcolm Baldrige Criteria about
  Leadership (there are 130 criteria questions in
  total).
• Answer the questions for your business. Remember
  the answers to the How questions should all
  start with
• The process.
• Rate the maturity of your process. Use a 1-5
  scale (5 being mature, widely deployed, achieving
  good results, 1 being immature, narrowly
  deployed, with minimal results)
• One team member to report out
• You have 15 minutes

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1. Leadership

• How do Senior Leaders
• set and deploy organizational values, short- and
  longer-term directions and performance
  expectations? (1.1 a(1) )
• include a focus on creating and balancing value
  for customers and other stakeholders in their
  performance expectations? (1.1 a(1) )
• create an environment for empowerment, innovation
  and organizational agility? (1.1 a(2) )
• review organizational performance and
  capabilities? (1.1 c(1) )

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The Necessary Essentials
Business Results
Process Mgmt
Process Mgmt Model
Human Resource Focus
People System
Management by Fact
Measurement, Analysis, Knowledge Management
Comparative Mindset
Customer and Market Focus
Business Acquisition Model
Customer Satisfaction Model
Strategic Planning
Enterprise Planning Model
Goal Flowdown Model
Leadership System
Leadership
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time
Leadership Team Transformation
Forever Humble
Humble
Arrogant
First Assessment
Org Profile Preparation
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Plus the Sufficient Essentials
Business Results
Process Mgmt
HR Focus
Recognition
Diversity
Focused Survey
Measurement, Analysis, Knowledge Management
Customer and Market Focus
Strategic Planning
Vision Values
Empowerment
Focused Offsites
Leadership
Operating Principles
Employee Involvement
Exec Champions
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The Path Forward!
World Class
700
Site Visit Oct 03
Submit Application May 03
Complete
Not Complete
550
Baldrige Assessment
Today
Assemble Team Begin Application Process Jan 03
Feedback Oct 02
Assessment Sep 02
Prepare Internal Application
Internal Application Complete 08/09/02
BEC San Antonio
Leadership/ Org Training March 02
350
LT Offsite
Time
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
CY 2002
CY 2003
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Matrix A - Approach
AEROSPACE SUPPORT BUSINESS MODEL
APPROACH
RESPONSIBILITY MATRIX
Model
Category
Category Item
LT Item Champion
Element Focal
Element
Exec Champ
Org Profile
Debbie Collard
-

Jim Walden
1.1 Org Leadership
Debbie Collard
Jim Walden
Category 1
David Spong
1.2 Social Resp.
Paul Guse
Leslie York
2.1 Strat Development
Tony Robertson
Fred Mickel
Category 2
Tony Robertson
2.2 Strat Deployment
Jim Brunke
Fred Mickel
3.1 Cust/Market Knowledge
Tom Bell
Tom Conard
Category 3
Ben Park
3.2 Cust Rel Satisfaction
Norma Clayton
Jason Beckmann
4.1 Measurement Analysis
Jeff Deckelbaum
Bud Schlichting
Category 4
Jay Kappmeier
4.2 Info Know Mgmt
Raj Kanungo
Mike Lafser
5.1 Work Systems
Lissa Hollenbeck
Larry Simonds
5.2 Emp Lrng Motivation
Keith Hertzenberg
Greg Lemaster
Category 5
Ken Mraz
5.3 Well-being Satisfaction
Mark Sullivan
Kay Moorefield
6.1 Value Creation Processes
Tom Stringer/Tom Peterson
Susan Gregory
Jeff Deckelbaum
Category 6
6.2 Support Processes
Steve Blake
Susan Gregory
June 2003
1
47
Matrix B - Deployment
June 2003
48
Matrix C Results Tracking
June 2003
5
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Leadership Drives Employee Involvement
100
90
Great Leadership Results in Top Quartile EI
80
70
Percent Positive on Employee Involvement
Good Leadership Results in OK EI
60
50
40
Poor Leadership Results in Low EI
30
10
9
8
7
6
5
4
3
2
1
Managers Level of Leadership Effectiveness
(Deciles)
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Leadership EI ESI
Results of a multiple correlation between EI and
Leadership Effectiveness predicting ESI
.77 (.60)
LE Leadership Effectiveness
EI Employee Involvement
ESI Employee Satisfaction Index
.76
.75 (.59)
xx(yy) - Pearson Correlation Coefficients
(variance)
.69 (.47)
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Impact of Extraordinary Leader Training on
Leadership Effectiveness
Average Favorability Ratings for 1165 Leaders
Showed A Significant Improvement from 2002

• All leaders given feedback and training.
• If leaders had fatal flaws they worked to fix the
  flaw.
• Without fatal flaws leaders focused on a
  strength.
• Used companion behaviors as a new approach to
  development.

100
90
72
80
67
70
60
Leadership Effectiveness
Favorable
50
40
30
20
10
0
2002
2003
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Improved Leadership Effectiveness Improved
Employee Satisfaction at Aerospace Support
2002 Results
2003 Results
90
84
81
78
80
76
73
73
71
70
70
66
66
62
61
60
59
58
60
54
52
50
47
45
Employee Satisfaction
39
40
30
20
10
0
1 - 9
10 - 19
20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 - 79
80 - 89
90 - 100
Leadership Effectiveness
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Observations

• Baldrige winning organizations have great
  cultures
• Collaborative
• Integrated
• Aligned
• Sharing
• Trusting
• Caring
• There are no Silver Bullets

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