Strategies for Success

ederal managers and executives may feel a bit like Dorothy and her friends in "The Wizard of Oz," fearing that "lions and tigers and bears" are all around them: Total Quality Management, reinvention, reengineering, the Government Performance and Results Act, the Information Technology Management Reform Act, the Federal Acquisition Streamlining Act, the Federal Acquisition Reform Act . . . oh my!

In just the past few years, several pieces of important management-related legislation have been passed, executive orders on management have been issued, and the bookshelves are filled with new titles offering "flavor of the month" management theories. What will best help your agency fulfill its mission? What will help deliver the best value for taxpayers? Which practices have enduring value-and which are likely to fade away?

To navigate successfully through today's complex and changing waters, leaders at all levels need to have a clear and powerful vision for their organizations and what they are seeking to achieve. They also must have a set of modern leadership skills that can translate that vision into action. Fortunately, they have at their disposal a proven blueprint for putting all of the pieces together-the criteria of the President's Quality Award Program.

Vision and Action

In his recent book, The Leadership Moment (Times Books, 1998), Michael Useem, director of the Wharton School's Center for Leadership and Change at the University of Pennsylvania, says "leadership is at its best when the vision is strategic, the voice persuasive, the results tangible." Useem tells the stories of nine people and their "leadership moments," distilling their experiences into management lessons.

One of the stories is about Arlene Blum, who in 1978 led the first successful ascent by an all-woman team of the 11th highest peak in the world, Annapurna. Assembling what was in effect a small start-up business, she led a team of 10 women and 235 porters and Sherpas up the mountain.

Blum had to deal with red tape, personnel problems, and logistics difficulties. Her first team made it to the summit, but a second attempt resulted in the deaths of two climbers. "I learned that a group of ordinary people, when they share a vision, can take on an incredible challenge and do things they never dreamed possible," Blum said. "If you can get a clear picture of your goal-really see it, feel it, taste it-then I'm convinced you can make it happen."

In distilling the lessons from all nine of his stories, Useem concludes that "the single most important lesson from these moments is the overwhelming significance of vision and action. Without a clear sense of destination, we are apt to flounder about, and without knowing how to get to that destination, we will never reach it even when we see it."

In their book Built to Last: Successful Habits of Visionary Companies (HarperCollins, 1994), Jim Collins and Jerry Porras also note the pivotal importance of balancing vision and action. Collins and Porras found that companies that have prospered for many years share certain common qualities: They have preserved their essential, core purpose through changing times, and have remained focused on the values in which they believe. At the same time, they have been willing to change all else: their culture, their operating practices, their specific goals and their strategies in order to stimulate progress.

A Blueprint for Excellence

Let's say you've clarified your purpose, you've identified the values that are important to your organization, and you know that you must now move to action. How can you put all the pieces together? The President's Quality Award (PQA) program offers a guide to achieving performance excellence.

The PQA program, administered by the Office of Personnel Management, is based on the highly successful Malcolm Baldrige National Quality Award. The Baldrige award, coordinated by the National Institute of Standards and Technology, is presented annually to high-performing business organizations. Bearing testimony to the success of the program, Baldrige award winners have outperformed companies in the Standard and Poor's 500 Index for the last five years by nearly 3-to-1.

Neither the PQA nor the Baldrige award operate on theoretical models. Instead, each is based on constant learning about what makes an organization successful. The award criteria are revised annually to incorporate new learning. While the central features of the criteria are common to government and business, there are some differences in the details.

An understanding of the seven basic PQA program criteria and how they work together as a system can go a long way in helping to understand where TQM, reinvention, reengineering, and all the other buzzwords and acronyms apply in your organization. Leadership, strategic planning, and customer focus combine to set the basic direction and action plans. Human resources and business processes are aligned with the organization's vision, values, strategy and action plans in order to get the results customers demand. Information is collected, analyzed and used throughout the organization to track performance and adjust plans, processes and human resources, as needed.

Sound familiar? This systematic approach is at the heart of the 1993 Government Performance and Results Act (GPRA), the "managing for results" effort of the National Partnership for Reinventing Government (NPR), and a number of other management improvement schemes. Let's dig a little deeper, then, to see how you might apply the program award criteria, as they have been revised for the year 2000, in your own organization.

For the purpose of this examination, imagine that you are conducting an organizational self-assessment, using the PQA criteria.

Leadership

Let's look first at the Leadership criteria. In this category, you will evaluate how your senior leaders guide your organization and review its performance. You will assess how leaders set and communicate organizational direction, values, performance expectations and a focus on creating value for customers and other stakeholders. You will examine how they establish and reinforce an environment for empowerment and innovation, and encourage and support organizational and employee learning.

You will also rate how your senior leaders review organizational performance and progress relative to performance goals and changing organizational needs. In addition, you will examine how the findings of those reviews are translated into priorities for improvement and innovation.

Finally, you will assess how well the organization addresses the impact of its operations on society, and at how the organization practices good citizenship, supporting and strengthening the community in which it operates.

If this sounds familiar, it's because it mirrors the research findings of Michael Useem, Jim Collins, Jerry Porras and other experts on modern leadership. The criteria reflect the pivotal importance of vision and action, and they underscore the importance of new skills needed for leadership in today's world.

Customer Focus

Next, you turn your attention to your organization's customer focus. You will look at how well the organization determines the requirements, expectations and preferences of its customers and the markets that it serves, now and in the future. You examine how the organization builds and enhances relationships with its customers, how it determines customer satisfaction, and how it uses feedback from customers to improve performance.

The NPR has stressed from its earliest days the importance of focusing on customers-and it continues to do so today. Similarly, GPRA underscores the key importance of concentrating on outcomes for customers, not just on budgets and spending, the traditional focus of agencies-and Congress.

Strategic Planning

Next comes an examination of strategic planning. In rating your organization, you will assess its strategic planning process, including how it develops strategic objectives, action plans and related human resource plans, including diversity planning. You will look at how well it has developed an understanding of the customers and markets it serves, the environment in which it performs its mission, and the risks it is likely to face. You also probe the organization's understanding of human resource needs, operational capabilities and supplier and partner relationships. You will evaluate the key strategic objectives that have been identified and the timetable for their accomplishment.

You will then assess how plans have been deployed in your organization. You will look at the specific action plans your organization has created, checking to see how well they are aligned with its basic strategy.

Finally, you will look broadly at your organization's effectiveness in performance measurement. Plans are of little value unless you are able to measure how well you are meeting your objectives. You will rate your organization on how well it has identified key performance measures, how well those measures are tracked, and how performance is projected into the future. You will also examine how your organization benchmarks its performance against that of other organizations.

GPRA requires agencies to come up with strategic plans. In a manner consistent with the PQA criteria, GPRA requires all agencies to prepare five-year strategic plans, annual performance plans with performance measures and annual performance reports. Ultimately, it seeks to link budget decisions to performance and outcomes. Agencies already have submitted strategic and annual performance plans and must submit their first performance reports next March.

The success or failure of GPRA will hinge on how well each agency integrates its requirements into an overall management framework, such as that of the PQA program. The planning process must draw from leaders, employees, customers and other stakeholders. Human resources and organizational processes must be aligned with the strategy. Meaningful measures of progress must be identified, tracked and used to improve performance. The focus should be on outcomes. If GPRA yields only the required submissions-and nothing more-it is bound to fail.

Human Resources

Now you focus on a vital category of performance, human resources management. Many studies in recent years have shown that organizations are likely to fail if they do not address the human dimensions of their actions.

You examine how your organization enables its employees to develop and use their full potential and meet the organization's objectives. You also probe how well your organization builds and maintains a work environment and an employee support climate conducive to performance excellence, full participation and personal and organizational growth.

You examine how your organization's work and job design, compensation, career progression, recognition and related workforce practices enable and encourage all employees to achieve high performance. This includes the promotion of cooperation and collaboration, individual initiative, innovation and flexibility, and keeping current with business needs. It also includes an assessment of the employee performance management system, including feedback to employees.

You also assess how your organization's education and training approach supports the achievement of business objectives, builds employee skills and contributes to improved performance. And you examine how your organization contributes to the well-being, satisfaction and motivation of all employees.

In the early days of the NPR, Vice President Al Gore underscored the pivotal importance of human resources. In a lecture at Georgetown University titled "The New Job of the Federal Executive," Gore said: "Two relatively recent developments have dramatically shifted the premises on which traditional public and private sector management theory has been based: first, a new understanding of how best to employ human capacity; and second, the new role of information technology in transforming the manager's job."

The "new understanding of how best to employ human capacity" is radically changing the rules of the game for both leaders and workers. Rigid hierarchies are giving way to new and more flexible organizations. Concepts of leadership have changed, with more emphasis on enabling all employees to be heard.

There is also new focus on "learning organizations," where individual and organizational learning is valued. Finally, there is new focus on maintaining a better balance between personal life and work, and building individual resilience in a rapidly changing workplace.

Process Management

Process management, the next category for examination, has been the focus of many reform efforts of the past several years. While improving processes is important in and of itself, it is most effective when undertaken within the framework of an overall management approach, like that embodied in the PQA program criteria.

Following the criteria, you will look at how your organization addresses customer needs, how products and services are delivered, how processes are evaluated and improved and how learning is transferred among units in the organization. You will examine production and delivery processes, as well as support processes and those that involve suppliers and partners.

Words describing process management activities have become imbedded in the current lexicon. Process action teams, process improvement teams, continuous improvement and many other terms derive from quality management activities. Generally, the objective of all of these activities is to continuously improve organizational processes in order to achieve better product or service quality, improved timeliness and lower costs.

More recently, reengineering has entered the stage. While earlier activities focused primarily on continuous, incremental process improvement, reengineering strives for breakthrough change. Reengineering involves a "clean sheet of paper" approach, rethinking from scratch how a particular process might best work. It is vital in reengineering efforts to pay close attention to the human resource issues that accompany change.

Several laws and presidential directives have addressed process improvement issues. For example, the 1994 Federal Acquisition Streamlining Act and the 1996 Federal Acquisition Reform Act seek to improve federal procurement, while other laws mandate reducing federal paperwork requirements. The 1998 Federal Activities Inventory Reform Act and OMB's Circular A-76 deal with privatization of federal functions. The 1996 Information Technology Management Reform Act, also known as the Clinger-Cohen Act, seeks to modernize the management of information technology.

Process improvement efforts within an overall management framework are vital. A lot of time can be wasted improving an obsolete process or one that does not contribute significantly to producing the desired outcomes. And if the connection to human resource factors is lost, success can be threatened.

Business Results

It's now time to look at what your organization has actually achieved. Way back in your planning, you identified key business indicators and have been tracking them. You also identified key internal performance indicators, and are tracking them and drawing links to your business indicators. You will provide your first performance report to the President and Congress next March.

What business results are important? Following the criteria, you focus on customer satisfaction, product and service performance, financial performance, marketplace performance, mission accomplishment, human resources, supplier and partner relationships, operational performance, and how you stack up relative to your competition. This part of your evaluation is not about process; it's about what you actually have accomplished.

The 1990 Chief Financial Officers Act directs agencies to build a foundation for sound financial management and reporting. The act establishes one of the building blocks for the eventual linkage of financial information to what has been achieved-in other words, what the taxpayers get for their investment.

Much attention has been given recently to the work of Robert Kaplan and David Norton and their concept of a "balanced scorecard." Kaplan and Norton argue that an organization's future cannot be judged strictly on the basis of its financial health. They advocate the use of a four-part "scorecard" that includes not just financial measures, but assessments of customer satisfaction, internal organizational performance and the organization's capacity to learn and grow.

Information and Analysis

Finally, it's time for you to look at information and analysis, vital connectors between all of the criteria discussed so far. Information and analysis form the lifeblood of an organization, supporting decision-making, planning, human resources management, process improvement, focus on the customer and results orientation.

You will rate your organization's performance measurement systems and how they support understanding, alignment and improved performance at all levels. You will assess how it selects information to analyze, integrates it into useful measures and uses it to improve performance. You will also rate your organization on how well its analyses support senior executives, work groups and daily operations.

Putting It All Together

One of the most important tasks you can perform as a leader is to offer a clear and enduring vision for your organization, communicating and reinforcing it constantly. You should do the same for values and expectations. Taken together, a clear sense of purpose, an identification of the fundamental values of the organization, and a knowledge of what you expect will serve as a North Star for your employees, guiding them to take the right actions, even in changing times.

As Arlene Blum discovered in her ascent of Annapurna, your leadership should be strong, but not dictatorial. You should stimulate action and change, set high expectations, provide encouragement and support, demonstrate your own willingness to learn and create an environment for learning throughout your organization. Your role should be that of a steward and mentor.

You should think of your organization as a system, with many complex components and relationships. You can better understand your own system by capitalizing on the learning of others, as it is captured in the President's Quality Award Program.

As a minimum, you can use the PQA criteria as a simple but effective model for thinking about basic leadership and managerial processes in your organization. But you will derive much more value if you use its more detailed criteria to evaluate and improve your organization's performance.

Eventually, you may go through the formal process of applying for the award. One of the things that those who apply for the award find most valuable is the feedback that they receive from a PQA examination of their application. Even the award winners find significant room for improvement in light of the demanding award criteria.

C. Wayne Peal recently retired following 35 years of service with the Central Intelligence Agency, where he worked on intelligence community reform activities. He is now a private consultant.