Measures of Performance

Leadership is one of the most prominent aspects of the organization-al context. However, measures of leadership effectiveness are difficult to quantify. Leadership is a critical catalyst for driving change in the organ-ization to add value. To measure the impact (effectiveness) of leadership, we need to understand to what extent it influences and drives perform-ance. Leadership is basically the capacity of someone to bring about change; in turn, it allows us to leverage it for greater organizational per-formance.

An accepted model for measuring leadership comes from James M.

Kouzes and Barry Z. Posner, authors of the book “The Leadership Challenge: How to Keep Getting Extraordinary Things Done in Organ-izations”. Kouzes and Posner have devised the so-called Leadership Practices Inventory (LPI). The LPI Measurement Model uses a series of questions to assess leadership effectiveness. People under designated leaders are observers, evaluating leaders on a series of qualities, such as:

• Discusses future trends regarding how they (the leaders) can change their work

• Provides positive feedback on accomplishments

• Follows through on promises

• Treats others with respect

• Solicits feedback and opinions from others

Leaders are also required to assess their leadership based on several behaviors, such as:

• Sets a good personal example

• Actively listens to other viewpoints

• Supports others in their decisions

• Willing to take certain risks and experiment

Performance measures in Leadership can be classified into four cate-gories: People Initiatives, Collaboration Initiatives, Organizational Initiatives, and Professional Success Indicators. People Initiatives describe the measures which leader-managers take to enhance employee engagement. It includes factors like Reduced Turnover, Improved Safety, Succession Planning, and Employee Effectiveness.

Collaboration Initiatives include KPIs (key process indicators) like Collaboration with stakeholders and shareholders, Information Sharing, Problem Solving Time, and Consensus Building Exercises. It indicates the factors which describe the initiatives taken by the leader for improving collaboration and flow of information in the organization.

Organizational Initiatives take into consideration indicators such as Goal Achievement, Key Processes, Change Management, and Evaluation and Assessment. These factors help define the future direction of the organization. Professional Success indicators include Qualification Level, Experience Level, Successful Projects Undertaken, and Industry Contacts of a leader-manager. They indicate the power, influence, and knowledge of the leader.

Tacy Byham and Audrey Smith of Development Dimensional Institute (DDI) identified four distinct attributes of a leader in their research paper “Optimizing Your Leadership Pipeline for: STRATEGIC LEADERS.” They state that promising leaders / executives exhibit a dis-tinctive mix of skills / competencies, knowledge, experience, and person-ality attributes.

Competencies

Typical critical skills/competencies for executives include:

• Demonstrating an understanding of the competitive global busi-ness environment as well as an awarebusi-ness of economic, social, and political trends that impact the organization’s global strategy.

• Establishing and committing to a long-term business direction based on an analysis of systemic information and consideration of resources, market drivers, and organizational values.

• Leading change, from identifying opportunities for improvement

and supporting a better approach for addressing work process issues to advocating for organizational transformation.

• Entrepreneurship, which is demonstrated by actively using knowl edge to create or seize new business opportunities.

• Vividly communicating a compelling view of the future state in a way that helps others understand how business outcomes will be different when the vision and values become a reality.

Knowledge

Depending on their role, senior leaders need:

• Background on how to build a long-range strategic plan.

• Intimate understanding of customers’ requirements, markets, and key competitors.

• Working knowledge of talent management functions, including compensation, employee training and development, performance management and measurement, recruitment, selection, promotion, succession management, union contracts, and bargaining.

• Knowledge of product design and management, research and development, distribution, and supply chain management.

• Keen insight into how to best create relationships with boards of directors, analysts, and investors.

Experience

Before assuming leadership roles, leaders might require experience in:

• Creating a corporate culture.

• Managing a diversity of functional areas.

• Having profit/loss responsibility for a business.

• Global leadership assignments.

• Managing a large operation.

• Playing a key role in a joint venture or merger.

Personal Attributes

Some of the key attributes successful leaders should demonstrate include:

• Ambition, initiative, competitiveness, and leadership potential.

• Inquisitiveness, imagination, gregariousness, and a need for social interaction.

2.8 Summary

Corporate success depends on the vision articulated by the organiza-tional leaders and management. For a vision to impact the employees of an organization, it has to be conveyed in a dramatic and enduring way.

The most effective visions are those that inspire, usually asking employ-ees for the best, the most, or the greatest. A vision explains where the organization wants to be and is an important element of creating a relia-bility culture.

Culture refers to an organization’s values, beliefs, and behaviors. In general, this culture is concerned with the beliefs and values of people based on their interpretation of experiences and how they behave, both individually and in groups. Cultural statements become operationalized when leaders articulate and publish the values of their organization which provide patterns for how employees should behave. Organizations with strong reliability cultures achieve higher results because employees sus-tain focus both on what to do and how to do it.

When we visualize, we are able to materialize; to convert our vision into goals and then into reality. Leadership is an enabler in this process by providing direction and resources to make this happen.

Creating a sustainable reliability culture is a long journey that requires sound change management practices. Many organizations get impatient and stop supporting reliability change or implementing best practices in the organization; they fail to understand it takes many years to create a sustainable reliability culture.

To sustain a reliability culture, the reliability/maintenance leaders in an organization must continue to provide the right tools, training, and edu-cation to both the operators and maintainers together as a team. They need to ensure that the workforce is always current on:

• Knowledge — of best practices

• Teamwork — to assure communication and understanding

• Focus — on the right goals for business success

• Planning — to create a roadmap for knowing where they are and where they want to be

• Processes — documentation, adherence, and discipline

• Measurements — to provide feedback and control and to ensure that they, the leadership, continue to support the continuous improvement environment and are creating a conducive, sustain-able culture

2.9 Self Assessment Questions

Q2.1 What are the key attributes of a leader?

Q2.2 Why is vision important?

Q2.3 Define MBWA. Why is it considered one of the key leadership practices?

Q2.4 Define an organizational culture.

Q2.5 What are the key benefits of having a mission statement?

Q2.6 Why are mission and vision statements important for an organization?

Q2.7 Define reliability culture.

Q2.8 Why is change management an important part of creating the right reliability culture?

Q2.9 Define the role of a change agent. Who is best qualified to perform this role?

Q2.10 State the differences between a manager and a leader.

2.10 References and Suggested Reading

Bennis, Warren and Burt Nanus. Leaders. HarperCollins Publishers, 1985.

Burns, James McGregor. Leadership. Harper Perennial Modern Classics, 1982.

Covey, Stephen R. 7 Habits of Highly Effective People. Simon &

Schuster, Fireside Edition, 1990.

Covey, Stephen R. First Things First. Simon & Schuster, 1994.

Harari, Oren. Leadership Secrets of Colin Powell. McGraw-Hill, July 2003.

Kouzes, James M. and Barry Z. Posner. The Leadership Challenge,4th Edition. Jossey-Bass, August, 2008.

Peters, Tom and Nancy Austin. A Passion for Excellence. Grand Central Publishing, 1989.

Peters, Tom and Robert Waterman. In Search of Excellence: Lessons from America’s Best Run Companies. Warner Books, 1982.

Phillips, Donald. Lincoln on Leadership: Executive Strategies for Tough Times. Warner Business Books, 1992.

Schwartz, David, PhD. The Magic of Thinking BIG. Simon & Schuster, Fireside Edition, 2007.

Thomas, Stephen. Improving Maintenance & Reliability through Cultural Change. Industrial Press, 2005.

Chapter 3