Leadership for Operational Excellence

Leadership for Operational Excellence

“Everything rises and falls on leadership” ~John C. Maxwell

Leadership for Operational Excellence is essential for achieving sustainable success in today’s competitive business landscape. As a senior leader, are you actually sabotaging your organisation’s Operational Excellence efforts? I’m not suggesting anything malicious here, more that your words and actions may have “unintended consequences” that are working against creating the necessary conditions for OpEx to thrive rather than supporting it. It can be easy to think that the responsibility for OpEx lies elsewhere in the organisation – with the Operations Director, the Production Manager or even the Continuous Improvement team – and that, having put the necessary structures in place, the senior leaders can continue with their important work of determining strategy and managing the business as a whole.

This can be particularly true where OpEx is seen as a series of methods and tools that are applied to various operational processes. Why would the senior leaders need to become involved in that? However, study of high-performing organisations like Toyota shows that OpEx is far more than a set of methods and tools. It also needs the right environment for those tools and methods to be applied successfully and sustainably.

Consider what might happen, for example, if senior leaders:

• issue directives “from above” with little explanation of why the actions are important.
• look for who is to blame when something goes wrong.
• are dismissive of ideas for improvement originating from front line staff.
• respond defensively to feedback on their ideas or behaviours.
• seem to act as though others are simply “assets”, just like items of equipment, and can be acquired or disposed of as needed.
  

  Leadership for Operational Excellence

I hope it doesn’t take too much reflection to see that the result of such behaviours will have a huge adverse impact on the willingness of others to speak openly about issues and on their motivation and willingness to engage with improvements to the business. Even worse, think what that means for the ability of senior management to actually manage the business. Valuable information is hidden and KPIs are manipulated to “look good”, so they have little idea what is really going on in the business. And most others are doing just enough to get by, so the business is wasting a huge percentage of its human potential. Problems go unsolved, performance goes down and great ideas for improvement are lost. All of which have a significant impact on the bottom line!

By contrast, examination of the behaviours of senior leadership at Toyota and similar high-performing organisations shows a very different set of behaviours grounded in a radically different set of beliefs and values. There, senior leaders:

• communicate a clear vision for the organisation and involve everyone on setting goals and making plans to achieve it.
• recognise that mistakes and failure are inevitable and – with rare exceptions – are generally the fault of “the system”, and that they are responsible for the system! Problems are investigated to find underlying causes and corrective actions put in place.
• encourage contributions from everyone and make sure that procedures are in place to evaluate them and take action where appropriate. Experiments are encouraged with an expectation that some will fail, yet all will result in valuable learning.
• are open to feedback from anyone in the organisation and respond with curiosity, always willing to learn and improve themselves.
• treat everyone in the organisation as a valuable individual with unique talents, skills and aspirations. Their development needs to be encouraged and supported, even when sometimes that means they have to part ways.

In all, they see the value in dealing honestly with reality, rather than how they might like things to be, and put in place the structures and systems to enable them to manage that effectively so they continue to improve in a sustainable manner. So, which of the above do you recognise in your business? What unhelpful attitudes or behaviours do you need to confront in yourself and your organisation? What helpful ones do you need to reinforce and make more of? If you’re unsure, whose opinions could you seek? Who do you trust to “tell it like it is” and whose views you will respect and be willing to take action on? What will they tell you?

Then once you know, you can determine what actions you need to take as senior leaders to generate the results that you aspire to. To help you, the following sections explore each of the themes identified above in more detail.

Setting the Right Climate

We talk a lot about “creating culture” yet, in reality, it’s a really hard thing to define and take action on. I have found it much more helpful to consider action in the context of creating the right “climate”, as shown in the illustration. Imagine a tree as a representation of the working of the organisation. The foliage or fruit of the tree is the “observable” part – the behaviours (actions and words) exhibited by everyone. Whether this is healthy or unhealthy is a function of the “roots” – the values, beliefs and attitudes of everyone in the organisation. The health of the roots is, in turn, determined by the “climate” – the actions and words of leaders – which also lead to the right care being given to the “soil” – working conditions, policies, procedures and so on. All of the themes identified earlier are elements of the climate that leaders need to create for a high-performing culture, so let’s explore each of them in more detail.

It starts with different thinking!

Before we start considering behaviours (actions and words), I’d like to spend some time on underlying thinking and mindset – the values, beliefs and attitudes that drive those behaviours. There are three aspects I believe leaders need to be thinking differently about.

Their role

First and foremost, is the senior leader’s role to serve or be served? From my experience and research, the best leaders are those who see themselves as there to serve the organisation and those in it rather than it being “theirs” to control and direct as they wish. Thus, they are aware of the responsibility that comes with the position and power that they have been given.
Such leaders generally see themselves as “first among equals” (as in “the buck stops here”), and assemble around them a team of others with complimentary knowledge and skills. They see their role as enabling that team to do their best work. These are the type Jim Collins identifies as “level 5” leaders (those associated with the most sustainably successful companies) in his book “Good to Great”, as opposed to “level 4” leaders, where it’s all about them and what they can do/get.

Their view of others in the organisation

This one is primarily about their belief in the potential of others to contribute. I’ve already mentioned the difference between seeing others in the organisation as “assets to be exploited” vs. “unique and valuable individuals with huge potential to develop”.
Which of these two perspectives they adopt has a huge impact on many, if not all, of the behaviours we will talk about shortly.
Perhaps the one “belief” about others that sums this up for me is the idea that “(almost) everyone wants to do a good job”, and there are generally good reasons why this intention doesn’t always translate into reality. A great leader with the right mindset will build on that intention and take action to enable them to turn that intention into result more effectively.

Their focus

Is the leader’s focus on the task – getting the job done – or on the people – ensuring that they are well-cared for and set up to succeed. Of course, there are strong arguments for both, and the question is perhaps more one of balance. I suspect that most organisations err too much on the side of task focus, whereas the more successful, such as Toyota, focus more on the people side, as summed up in a famous quote by former Toyota chairman Fujio Cho, “first we make people, who then make cars”, emphasising his belief that the organisation’s primary role was to create capability. That’s not to say that the “task” dimension should be neglected completely. To do so would surely result in confusion and a level of anarchy, even if the work environment itself was very nice. For me, it’s more about providing clarity on what needs to be done, why it matters and how success will be measured, then being able to delegate effectively to capable individuals to take action.

Thinking drives behaviour

The different dimensions of mindset above influence how leaders act in a variety of circumstances, perhaps most significantly in how they respond to challenging situations.

Response to problems and mistakes

Perhaps one of the most telling aspects of a leader’s mindset is how they respond when things go wrong.
It seems to be a particularly British trait to want to find “someone to blame”, as if somehow that makes things better. Or, at least, it means it’s not us!
However, none of this helps to get to the real cause of the mistake. Such a response is more likely to obscure the truth and results in problems and mistakes being buried until the reality is too painful to ignore, by which time the cost of putting things right is far higher than if the issue had been dealt with when it first became apparent. Better if we set aside the idea of blame and ask ourselves “what allowed this problem/mistake to happen?” then look objectively to answer that question without making it personal.

Response to ideas from front line staff

All too often ideas from front line staff are too readily dismissed. I’ve heard statements like “if it were that good an idea, we’d already have thought of it!” Or they disappear into a black hole of a suggestion scheme and are perhaps never heard of again. In better cultures, ideas are demonstrably valued and welcomed. The process for taking action on them is visible and clear, involving the person or team making the suggestion where possible and appropriate, and carried out in a timely manner.

Response to challenge and feedback

The best leaders are those who are self-aware and curious enough about themselves to want to learn and grow. As such, they are willing to be vulnerable and are open to challenge and feedback, wherever in the organisation it comes from. Rather than deny, defend or reject the challenge/feedback, they respond with concern and curiosity, demonstrating that they care for the person offering it and are willing to reflect and take action where appropriate.

Creating the right climate for success

There are a number of areas where leaders – having adopted the right mindset – need to take action to create the right climate to enable everyone else in the organisation to succeed.

Inspirational Leadership

Senior leaders in an organisation are largely responsible for setting the direction of the organisation and determining strategy. They are also responsible for leading the process that establishes a vision and meaningful goals for everyone to deliver that strategy. In the best organisations, leaders communicate a clear vision in a way that will inspire others to engage with the vision and commit themselves to working towards it. They will also seek feedback from others in the organisation to test, refine and add detail to the vision so that it becomes even more powerful in the drive towards operational excellence. A similar process can be applied for setting short and medium term goals then creating plans to achieve them in a very interactive way. This includes letting ideas filter back from the front line of the organisation (“lower down” in the traditional hierarchical organisational model), including the aspirations and ideas, in ways that adjust the plans further back.

By working in this way, leaders are modelling behaviours that demonstrate the right mindset for the transformation, for example, showing they are open to feedback, demonstrating a willingness to learn and encouraging others to give of their best.

Visible Leadership

Another key leadership practice in high performing organisations is that senior leaders are highly visible throughout the organisation. A commonly used term is “going to gemba”, derived from the Japanese word for “actual place” and referring to the value of seeing things for yourself rather than relying on reports and second-hand information. Of course, it’s not just being visible, it’s also about showing up with an attitude of learning. Wanting to understand the situation and interact with others in a positive way and being willing to learn. This, in turn, means that leaders must be open to feedback – however critical – from everyone and model vulnerability. They must also be able to manage that fine balance of delivering feedback that combines the requirements of demonstrating genuine care for everyone with the challenge of holding them accountable for delivery. In this way, these visits become powerful coaching moments rather than just “being seen”.

Empowering, Enabling Leadership

The types of behaviours mentioned above are part of an overall approach that truly empowers and enables others to play a full part in the achievement of the organisation’s vision.

Creating a safe environment

Foundational to this is the creation a safe environment – both physically and psychologically. To really be able to contribute, everyone needs to know that they are well-looked after and trusted to take action without fear of negative consequences if they make mistakes or things don’t work out as well as they imagined. Trying things out with the certainty that there will be some failures is essential for learning and success. Key to this is the way that leaders react in such circumstances, as described earlier in this article. Fundamentally, this is about eliminating fear from the process, primarily fear of negative consequences, so that everyone is more willing to be open. Positive responses acknowledge the willingness to work on improvements and encourage learning so that success is more likely in future.

Establishing systems

“The bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce.” ~W. Edwards Deming

Deming’s quote above is well-known and frequently cited in the context of eliminating fear and blame. However, it also begs the question “what (or who) creates the system?” In practical terms, the “system” for most people is the organisation structure, policies, procedures, work instructions etc. And those are generally the responsibility of senior leadership. So, a key part of leadership creating the right climate is putting in place all of these elements in a way that is sympathetic to all of the other themes discussed to maximise the chances of success.

Enabling personal growth

Great leaders ensure that everyone in the organisation is equipped and enabled to play their full part – creating an environment that maximises the potential in everyone even when, in some cases, the focus for that is outside the organisation, for example working with a community group or coaching a sports team.
This isn’t just about acquiring knowledge and skill through training and practice, but also through creating opportunities for them to apply their learning as part of their routine and also to share their thoughts about what’s going on and how it might be improved. Practical support is the third ingredient for personal growth. This can be through access to more experienced practitioners when trying out new skills or through coaching – all too often seen as only a remedial activity – to enable them to truly take responsibility for their own development.

Leader as Coach

A key part of enabling the growth of others is to adopt a coaching leadership style based on asking effective questions rather than giving advice or telling others what to do. Our own personal experience surely demonstrates that we often resist being told what to do more than we follow instructions, almost as an automatic response. On the other hand, asking a good question engages the mind of the other person, raising their awareness of the situation and encouraging them to think it through for themselves. Followed through to the point where the other person decides for themselves what action to take, they are also enabled to take responsibility for the actions they have agreed to. My experience has led me to believe that creating this sense of “ownership” – accepting responsibility for one’s own actions, is perhaps the most significant aspect of the culture we are working to create for operational excellence. It contrasts sharply with the result when everyone is simply expected to “follow orders”. Here, responsibility stays with the person giving the instructions and, in the worst cases, results in what I call a “compliance culture”, where people do just enough to get by rather than willingly doing their best work.

True Servant Leadership

I believe all of the aspects above exemplify what true servant leadership looks like in practice – enabling everyone else in the organisation to succeed and therefore enabling the organisation to achieve its purpose. It is reflected in the studies of the key leaders in the history of Toyota and other sustainably successful cultures and is exemplified as the ultimate leadership style in Jim Collins’ book “Good to Great”, so there seems little doubt that consideration of the topics covered in this article will deliver significant benefit to your organisation.

Where next?

I hope that this article has encouraged you to take that leap of vulnerability and to look critically at your own leadership and more widely at your organisation.
What challenges and opportunities have you identified? And what action do you need to take as a result?

Want to go deeper?

In addition to this series of articles, we are preparing a series of related workbooks to be released progressively over the coming months. Watch out for them or, if you’d like to be notified when they’re available, drop me an email or complete the contact form on our website.
Can’t wait? If you need information or help more immediately, I’d be delighted to jump on a no cost, no obligation call. Again, drop me an email or complete the contact form on our website.

I look forward to journeying with you. Next time we’ll be digging deeper into the “People and Culture” element – watch out for it!

Email me: harvey@veracityoxford.com
Connect in LinkedIn: https://www.linkedin.com/in/jharveyleach