Excellence and the Leadership Imperative

Dr. Rick L. Edgeman, Professor & Director

SABER Institute for Self-Assessment & Business Excellence Research
College of Business, Colorado State University, Fort Collins, CO 80523, USA
Phone: 1-970-491-5098
Fax: 1-603-250-7771
E-mail: Rick.Edgeman@mail.biz.colostate.edu

Suggested Running Head: Excellence and the Leadership Imperative

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

 Abstract

This special issue of the Journal of Management Systems is dedicated to

Leadership for Business Excellence. Business Excellence is, on the whole, an emerging

area -- nevertheless, leadership is regarded globally as its pre-eminent enabler.

Understanding of leadership in this context is also emerging and has to date focused more

intently on activities than attributes.

In this issue, the topic of Leadership for Business Excellence is approached from

varying perspectives. Included among these are consideration of the contribution of

gender differences, the importance of values and ethics, the balance of core values and

core competencies, identification and deployment of values at the corporate level, and

application in the public sector. Contributing authors to this issue bring not only differing

business and academic backgrounds, but also differing cultural experiences since

contributing authors include citizens of Denmark, Ireland and the United States.

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

 Introduction

In Europe it is generally referred to as Business Excellence and in the United

States it is known synonymously as Performance Excellence. Most of the remainder of

the globe refers to it by one or the other of these two terms. But whatever Business or

Performance Excellence may be, it is generally acknowledged that it is enabled in large

by leadership, hence the topic of this special issue of the Journal of Management Systems

wherein the term Business Excellence is generally employed.

The concept of Business Excellence is recognized around the world and is at the

core of various national quality award programs as well as organizational self-assessment

models applied by numerous business entities, whether they be public or private (Conti,

1997). Business Excellence can be regarded as the overall way of working that balances

stakeholder concerns and increases the probability of long-term organizational success

through operational, customer-related, financial and marketplace performance excellence

(Edgeman and Scherer, 1999). But what is this “overall way of working” and how can we

make it as portable as possible, so that its benefits can be more broadly distributed? More

specifically, what contribution does leadership have to make to this “overall way of

working?”

These are important considerations since, indeed, highly efficient and effective

organizations driven by exceptional leadership contribute to communities through

exemplary citizenship, to consumers through outstanding products and services, and to

economies through enhanced competitive position. Of course, not all environments are

competitive per se (Cox, 1999) and this is perhaps more well-known elsewhere around

the globe than it is in the United States, that is, in regions where the public sector forms a

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

greater part of the national social and economic profile this phenomena is more

recognizable.

While various elements are recognized as legitimate enablers of Business

Excellence, its heart and soul is leadership, which is herein regarded as systemic to the

extent that an organization’s ability to anticipate and counter threats on the local level

renders it immune to unresolved crises that must be brought to central attention.

Transforming systemic leadership from concept to reality is an especially critical

Business Excellence consideration because it deals with the foremost of the stakeholder

segments whose expectations must be balanced -- the customer. As such, systemic

leadership is fundamental to customer relationship management (Galbreath and Rogers,

1999).

With regard to Business Excellence, one key leadership consideration is the

identification and mapping of values and competencies to the aforementioned “overall

way of working.” Further, which of these can be deployed throughout the organization

and how is the effectiveness of that which is deployed, assessed?

While effective leadership styles may vary dramatically across markets and

circumstances, some “universal” aspects of effective leadership mapping to Business

Excellence may be identifiable. Once identified, an important issue becomes approach,

deployment, implementation results and assessment thereof. Herein, leadership as

addressed by the self-assessment models underlying various international quality awards

is examined. This is followed by identification of “universal” leadership core values and

competencies and discussion of their relation to Business Excellence. Prominent among

these core values are principles practiced by Leonardo da Vinci, regarded by some as

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

humankind's greatest genius (Buzan and Keene, 1994), and the expression these find in

Leadership for Business Excellence.

Deployment is critical to systemic leadership and, among other means, may be

approached via the reward and recognition system and through organizational

performance measures. Closure is reached through discussion of the crucial issue of

“success in our endeavor”, that is, assessment of leadership for business excellence.

Leadership and International Quality Awards

Systemic leadership distributes leadership responsibilities and privileges across an

organization’s human resource. Most Business Excellence models limit the role of

leading to CEOs and senior executives and regard it as competence based. The legacy of

leaders across human history however, is written in terms of core values such as courage,

wisdom, sacrifice, stewardship (Block, 1993), servanthood (Greenleaf, 1997) and so on.

In an act of corporate nihilism, Business Excellence models typically ignore such values

(Edgeman and Rodgers, 1999).

Leadership criteria from various international quality award models indicate four

primary areas that are assessed (Edgeman and Conlan, 1998) – none of which map to the

sort of core value based legacies often associated with leadership. These commonly

assessed areas include:

• Leadership internal to the organization and particularly as it relates to total quality

management, recognition and reward, and resource commitment;

• Involvement with customers, suppliers and other external organizations;

• Leadership responsibility to society; and

• The system of leadership.

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

 The Future of Leadership in International Quality Prizes?

In a move signaling possible integration of leadership core values and

competencies, the European Foundation for Quality Management recently modified the

self-assessment model that underlies the European Quality Award (EFQM, 1998). The

so-called “improved model” is being applied for the first time in 2000 and adopts the

RADAR (Results, Approach, Deployment, Assessment and Review) method of self-

assessment. Enablers of Business Excellence, such as leadership, are examined for the

approach followed and its rationale, how the approach supports policy and strategy and

how it is focused on the needs of the stakeholders affected by it. Further, the extent of

deployment or pervasiveness of the approach, and how it is managed so as to ensure that

it is full and effective are investigated. Assessment and review activities that take place

include measuring approach and deployment effectiveness, undertaking learning

activities such as benchmarking, and, based on all these, identifying, prioritizing,

planning and implementing improvements. Specific to leadership, the improved model

places additional focus on the leaders’ personal role in ensuring that the organizations

management system is developed and implemented.

The improved EFQM model defines leadership as: How the behaviors and

actions of the executive team create the culture, values and overall direction required for

long term success. These behaviors and actions are appropriately reinforced and

deployed by all other leaders within the organization (EFQM, 1998). As an enabler of

Business Excellence, a key issue is how the approach to leadership is developed, with

particular attention devoted to:

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

• defining organizational approach to leadership including: purpose, direction and

objectives;

• integration of the approach to leadership into overall organizational policy and

strategy;

• defining the processes that generate the key leadership related activities;

• matching leadership to organizational maturity/structure, changing markets and

environment;

• establishing the organization culture and driving values;

• defining role models for leadership;

• stimulating innovative and creative thinking; and

• updating the approach based on assessment and review feedback.

Deployment -- the means by which leadership may be driven into the

organization, that is, made systemic -- is examined within the improved EFQM model

according to how the approach to leadership is deployed and mirrored in leaders’

behaviors and actions. Among issues addressed are the selection, cultivation and

development of leaders and organizational leadership structure. It would seem evident

that the EFQM perspective on Leadership for Business Excellence recognizes the time-

honored principle that “there is no success without a successor” (Maxwell, 1995).

The improved EFQM model considers a comprehensive list of leadership

behaviors and actions. These include: communication and modeling of organizational

values; setting and communication of direction and priorities; forging unity of purpose;

encouraging empowerment; recognition of people’s effort and achievements; promotion

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

of and support for learning and innovation; meeting, listening, understanding and

responding to stakeholders; driving ethical behavior into the organization; and updating

the deployment based on assessment and review feedback.

The EFQM Business Excellence Model also assesses leadership comprehensively.

In fact, assessment and review of leadership addresses implementation of a monitoring

system with early warning indicators and measures; identification and evaluation of

organizational strengths, weaknesses, opportunities and threats; active learning about

effective and ineffective leadership; use of upward evaluation, appraisal and assessment;

evaluation of the role of leaders in driving the innovation and learning process;

prioritizing and implementing the learning from all monitoring, assessment and review

activities to improve efficiency and effectiveness; and validation of the assessment and

review process.

Universal Leadership Core Values and Competencies

In January 1998 more than two dozen of the world’s most influential executives

gathered at CBS studios in New York and the BBC studios in London. Consensus on

three strategic and competitive business growth drivers emerged from this gathering,

billed as the first Best Practices for Global Competitiveness Summit (EFQM, 1998).

Mapping directly to leadership as identified in Business Excellence models underlying

international quality prizes, those drivers are:

• innovation through formal and informal processes for discovering and applying new

business ideas from both traditional and nontraditional sources (Bogan and English,

1994; Urban, 1998);

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• strategic alliances formation through development and maintenance of collaborative

business efforts that have both high risk and great benefit for all participating parties

(Segil, 1996); and

• stakeholder symbiosis – an emerging concept that recognizes the mutual

interdependence of all stakeholders as related to their success and financial well-

being.

Vital strands in the tapestry of Business Excellence that are consistent with ideas

espoused by those executives participating in the Summit include:

• value for the individual and knowledge issues, such as training, fast learning,

creativity and innovation;

• total engagement of employees through recognition and reinforcement, resource

allocation sufficient to employee needs, empowerment, and participation in

multidisciplinary teams;

• a balanced stakeholder perspective that recognizes the link between employee and

customer satisfaction that drives success and profitability, thereby creating

shareholder value;

• alignment of employee training with customer needs and of mutual interests in

formation and management of strategic alliances (Labovitz and Rosansky, 1997); and

• a strong strategic orientation with the ability to integrate an organizations’ many

concurrent initiatives (Dahlgaard, Nørgaard, and Jakobsen, 1998).

Whether directly or implied, various core values -- where “values” is meant in the

traditional ethical and moral sense -- map to these drivers of Business Excellence and

supporting ideas. These include fairness, honesty, respect for the individual and integrity

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

(LeClair, Ferrell, and Fraedrich, 1998; Lowe, 1998); stewardship of organizational

resources including its human resource (Block, 1993); servanthood to the organization’s

many stakeholders; listening, communication, empowerment and value for diversity

(Critelli, 1998; Price Waterhouse Change Integration Team, 1995); and a value for

reproduction, that is, commitment to the principle that leaders beget more leaders.

Business Excellence, Leadership Values and da Vincian Principles

Recently a new organization committed to the creation, dissemination and

application of knowledge relevant to Business Excellence was birthed (Dalrymple,

Edgeman, Finster, Guerrero-Cusumano, Hensler, and Parr, 1999). This organization,

called the Multinational Alliance for the Advancement of Organizational Excellence or

MAAOE, is an alliance composed predominantly of academics coming from

approximately 20 nations distributed throughout Africa, Asia, Australia, Europe, North

America and South America. The strategic intentions MAAOE are strongly related to

knowledge -- its derivation and, ultimately, application.

While Deming’s System of Profound Knowledge (Deming, 1986) contributes to

pursuit of MAAOEs’ strategic intentions -- since, indeed, Deming's ideas and methods

are regarded as central to quality management -- the womb from whence the babe of

Business Excellence sprang, it is possible that another line of pursuit might also be

beneficial. We now consider classical principles employed by Leonardo da Vinci.

Da Vinci was no mere dreamer who schemed but did not act. This is well-

documented by his seminal work in human anatomy and the wealth of art and scientific

work that he bequeathed to civilization, including designs for creations that would be

technologically impossible for hundreds of years after his death, such as the submarine

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and helicopter. In particular, we now examine seven principles applied by da Vinci and

their applicability to creation, dissemination and application of knowledge relevant to

Leadership for Business Excellence. In the Italian, these seven principles are: Curiosità,

Dimostrazione, Sensazione, Sfumato, Arte/Scienza, Corporalita, and Connessione. These

principles are concisely defined by Michael J. Gelb (1998) as follows:

• Curiosità: an insatiably curious approach to life and an unrelenting quest for

continuous learning.

• Dimostrazione: a commitment to test knowledge through experience, persistence, and

a willingness to learn from mistakes.

• Sensazione: the continual refinement of the senses, especially sight, as the means to

enliven experience.

• Sfumato: a willingness to embrace ambiguity, paradox, and uncertainty. The literal

meaning of Sfumato is “going up in smoke”.

• Arte / Scienza: development of the balance between science and art, logic and

imagination – so-called “whole-brain” thinking.

• Corporalita: the cultivation of grace, ambidexterity, fitness and poise.

• Connessione: a recognition of and appreciation for the interconnectedness of all

things and phenomena – systems thinking.

With regard to curiosità, it worthwhile to note that many organizations now

include curiosity among their core values. It is not too strong a statement to say the

curiosity is at the core of being a learning organization (Senge, 1990). A detailed reading

of the Malcolm Baldrige National Quality Award Criteria for Performance Excellence

(1999) indicates that curiosità is highly consistent with Business Excellence and that an

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

organization’s leadership is expected to provide the motivation and means by which

continual learning takes place in the organization.

While innovation and new product development may be driven by curiosità and

may lead to marketplace success, it is dimostrazione that transforms curiosità’s ideas into

marketplace reality. This transformation is commonly an iterative fine-tuning process that

requires striking a balance between the patience needed to deliver a market-ready product

or service with the urgency inspired by opportunity and competitive pressures.

Organizational leadership must approach the dimostrazione process with meekness -- the

idea of which is similar to the “meeking” of a horse, that is, bringing the power of the

dimostrazione process under control, without breaking the curiosità spirit by which it is

driven.

While the definition of Business Excellence employed herein cites a balanced-

stakeholder perspective, it is certainly the case that the pre-eminent among stakeholders

is the customer. Organizations in pursuit of Business Excellence almost certainly employ

various means of “listening to the voice of the customer.” These means may include

customer surveys, benchmarking our competitor’s customer satisfaction and loyalty

levels, use of focus groups or application of the more formal technique of quality

function deployment. Regardless of the method or methods applied, the analogy between

“listening” and sensazione is an obvious one. It is worth noting that many means of

learning have been identified and that these commonly involve active use of our senses

with listening being among these. Listening can be regarded as both a competency and a

core value and it both the practice and promotion of listening is key to Leadership for

Business Excellence (Edgeman, Dahlgaard, Dahlgaard and Scherer, 1999).

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 “The best laid plans of mice and men …” in many ways captures the essence of

sfumato in that the nature of our existence is to find that which is predictable while at the

same time living within the larger framework wherein there is precious little that is

absolutely certain. The challenge of course is to embrace, rather than abhor, ambiguity.

From a leadership perspective, this can often be modeled through the policy deployment

process wherein leadership at the top of the organization -- from whom “big vision” is

often an expectation -- will state a vital few goals, called hoshins. It is generally held that

these hoshins must be accomplished if the organization is to prosper. This process

cascades down through the organization with individuals at each successive level

deriving their own hoshins that will in some way actualize those from the preceding

level. Important is that the individual is responsible for determination of the means by

which their hoshins are actualized, rather than having these means imposed. Clearly, it is

not that our desire is for anything to “go up in smoke” -- but we should note that the fire

that burns down the house and the fire that warms it both produce smoke. In this case, our

manifestation of sfumato is intended to warm the home and bring liberation, rather than

bondage -- but this will require welcoming, rather than fearing, ambiguity.

Common in organizations pursuing Business Excellence is the provision of

education and training in many areas, including use of quality improvement and

creativity methods -- methods that are in some cases “left-brain” and in other cases

“right-brain” so that, the development of the organization’s human resource is a more

holistic one. This is the goal of arte / scienza: the integration of “left-brain” thinking and

“right-brain” thinking to produce “whole-brain” thinking. Encouragement of and support

for education and training is generally assessed in the Human Resource Management and

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Development component of Business Excellence models, but is therein regarded as a

responsibility of leadership.

It is interesting to note that the Latin root for corporalita is corpus and that, in

essence, these words are used for corporation or organization or body. The primary idea

in the da Vincian context is one of completeness -- both personal and corporate -- through

flexibility or versatility. Among acknowledged contributors to Business Excellence that

promote such completeness are emphases on cross-functionality, cross-training, and

teamwork. The criteria of most Business Excellence models generally expect leadership

to support these emphases, both motivationally and from the perspective of resource

dedication.

In the Italian it is connessione and in the Latin it is nexus. In either case it is

interconnectivity, an appreciation for and understanding of complex interactions and

knowledge of the truth that maximum benefit to the whole is often derived from the

sacrificial action of one or more of its constituent elements. This is systems thinking in

the sense that Deming (1986) emphasized wherein optimization of the organization is not

of necessity equivalent to optimization of the various component parts (Harrington, Carr

and Reid, 1999). The Biblically familiar among readers of this article will recognize this

as analogous to the admonition of the Apostle Paul in his first letter to Christians who

were in Rome (Romans 12:12-31).

Deployment Principles

A time-honored principle is that of “what gets measured is what gets done!”

Based on this idea, the premise is that core value deployment can be facilitated via the

following means:

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

• the reward and recognition system; and

• a carefully crafted and integrated set of organizational performance measures.

Other methods not so keenly tied to measurement that have proved effective in deploying

core values include:

• codes of conduct; and

• a statement of values and guiding principles.

Examples of successful deployment of core values through these each of these

four approaches can be found in Paine (1994) as can examples of organizational failure

traceable to deployment of such values.

At individual and team levels, performance measures hold the potential of

integrating core values and competencies. On this premise, the reward and recognition

system provides a vehicle for deployment of both values and competencies -- indeed, this

is a common means of deployment. Deployment through the reward and recognition

system is especially promising since it is here that means and measures for deploying and

reinforcing values and competencies can be devised. The reward and recognition system

is the mechanism by which an organization’s culture is communicated and as such

performance measures are a strong force in shaping organizational culture and those

measures used should directly reflect core values identified for deployment.

Assessment of Leadership for Business Excellence

Organizational leadership is often regarded as the supreme function of ultimate

arbitration and decision-making and thus its topos is at the pinnacle of the organizational

pyramid. In advanced organizations, leadership is pervasive -- being embedded in all

members of the organization, down to the interface with the customer -- whomever is in

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direct working contact with the customer is empowered to secure customer enthusiasm

and, in some sense, loyalty in real-time. It is in this regard that empowerment is critical to

realization of organizational mission. The person involved in such transactions must be

capable of exercising this empowerment -- knowing, sharing, being committed to

corporate objectives and constraints. That person is, in essence, a leader. In this regard,

leadership is not constrained to individuals and has no singular place in the organization,

it is localized thus omnipresent -- it is systemic (Edgeman and Scherer, 1999).

How then do we measure the extent to which leadership has been driven into an

organization, the degree to which issues are being effectively dealt with at local levels?

At the organizational level the issue is in part one of determining the capacity to ‘forgive

and forget’ in those instances where an individual has made an honest mistake, for

advanced leadership systems do not personalize and, thus, do not persecute failures.

There are observable characteristics, measures for which may be derived, for assessing

progress of a specific enterprise on the continuum from a traditional leadership system to

an advanced leadership system. The implicit assumption is that advanced leadership

systems more nearly conform to systemic leadership and thus promote Business

Excellence more effectively than do traditional leadership systems. Edgeman and Scherer

(1999) suggest a variety of characteristics, measures for which must be derived, that can

be used to assess progress toward an advanced leadership system and hence, by

implication, leadership that promotes Business Excellence as Business Excellence is

herein considered.

Tito Conti, the man responsible for developing much of that constituting the

critieria of the EFQM Business Excellence Model provides excellent guidance on the

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

organizational self-assessment process, including assessment of leadership (Conti, 1997).

While not discussed explicitly herein, another means of assessing overall organizational

performance is the balanced scorecard (Kaplan and Norton, 1996). Assessment is critical

to characterizing an organization's performance and hence to making progress toward the

goal of Business Excellence. While many assessment tools and techniques exist, the

balanced scorecard and the criteria of various international quality prizes, such as the

European Quality Award or America's Malcolm Baldrige National Quality Award are

generally recognized as being of great value in the assessment process.

Conclusion

What is expected of organizational leadership? The answer is simple enough:

abundant foresight that retains its brilliance in hindsight. Leadership as historically

conceived indicates that competencies that augment principle-centered core values are

also expected. Organizational nihilism has led to increasing emphasis on competencies to

the neglect of core values. In an effort to restore balance this work has suggested both

values and competencies that an organization intent on Business Excellence should

deploy and assess.

Values and competencies identified were derived from a variety of sources.

Among these sources were the leadership criteria of the EFQM Business Excellence

Model that is used to assess applicants for the European Quality Award, ideas generated

during a 1998 meeting of leading executives, and classical principles applied by

Leonardo da Vinci.

Identification of leadership values and competencies key to Business Excellence

is not sufficient. These must be deployed and, once deployed, their effectiveness

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

assessed. Remembering that ‘what gets measured is what gets done’ -- deployment

through the reward and recognition system and through organizational performance

measures was recommended.

What is imperfectly measured is likely to be imperfectly executed. Still, in the

spirit of continuous improvement a legitimate start must be made and imperfect measures

can be honed over time. Critical to the honing process is assessment. Assessment within

the context of the aforementioned EFQM Business Excellence Model was discussed as

were ideas intended to capture the degree of progress made toward systemic leadership,

deemed herein as leadership that will promote Business Excellence.

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Biographical Sketch

Dr. Rick L. Edgeman is professor of computer information systems in the College

of Business at Colorado State University where he also serves as director of the SABER

Institute for Self-Assessment & Business Excellence Research. Rick earned the doctoral

degree in Statistics in 1983 from the University of Wyoming and has previously served as

a visiting professor in the Quality & Innovation Research Group at the Aarhus School of

Business in Denmark, the Management Science Division at the University of North

Texas, the Center for Quality & Applied Statistics and Graduate Statistics Department at

the Rochester Institute of Technology, and in the College of Business at Bradley

University. He has lectured extensively internationally, including in Scotland, Ireland,

England, Denmark, Sweden and Australia.

Rick’s research interest spans quality engineering and management, leadership,

business excellence, statistics, and statistical computing. He has authored or co-authored

more than 100 articles, many of which appear in such journals as Quality Progress, Total

Quality Management, The TQM Magazine, International Journal of Quality & Reliability

Management, IEEE Transactions on Reliability, The Leadership & Organization

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001

Development Journal, The American Statistician, Australian Journal of Statistics,

Communications in Statistics, and Communications of the ACM.

In addition to editorial activities, Rick currently serves as Executive Director of

MAAOE, the Multinational Alliance for the Advancement of Organizational Excellence.

MAAOE was founded in 1998 and has participation spanning more than 20 nations.

MAAOE is dedicated to the creation, application, and dissemination of knowledge

related to organizational excellence.

Journal of Management Systems, Vol. 13, No. 1, pp. 1-12, 2001