Importance of Good Leadership in the Organisation

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This paper represents the importance of good leadership in the organisation. Excellent leadership has been defined as the process of social influence.

It was Alan Keith from Genentech that made the following comment, “Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen. ” (Kouzes and Posner: 2008) The Trophy project was plagued by a dearth of leadership which directly contributed to a lack of trust, a dearth of respect and bad decision making. 2 Death of Effective Communication Reichart, the newly elected project manager was set for failure from the start. His role and expectations were not clearly communicated. Important vision and mission goals were left to chance.

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A breakdown in communication left Reichart helpless as he could not express the concerns and all the danger signs as he was told not to meddle. It is clear that this organisation functions with a top down directive approach as Reichart is often told what to do. According the Ohio State Study, this organisation exhibits low structure and a low consideration culture. 3 Recommendations This organisation is in dying need of a radical culture change. Resistance to change is inevitable but can be combated if there is a level of personal interest exercised by top management. A new value system is required to be introduced into the organisation.

This value system must focus on three key areas, namely: speed, simplicity and trust. A greater level of awareness is required, this pertains to communication, vision and mission statements and the organisations values. Good leadership will ensure that the right person is selected for the right role. We suggest that the role of top management play a large part of the radical culture change. The introduction of change leaders will be required to generate a culture of change throughout the organisation, but it is imperative to note that culture change must have executive buy-in or run the risk of defaulting to the old organisational culture.

Anallysing the causes 1 Problem Identification Figure 1 depicts the Ohio State Study quadrants. Organisations perform at an extremely productive level when a state of high consideration and high initiating structure has been implemented. In the case study it is evident that the Trophy project is operating at the low consideration and low initiating structure. We will utilise the section below to table the identified problems and root causes. [pic] Figure 1: Ohio State Study The majority of the problems identified in Table 1, are behavioural problems based primarily on poor organisational performance and improvement. No |Problem |Category |Cause | |1. |Dearth of Leadership |Behavioural |Project manager’s leadership skills not strong enough to manage the project| | | | |– lack of experience. This is evident by the lack of respect shown by the | | | | |functional manager’s to the project manager. | | | |In a project driven organisation, operating within a matrix structure, it | | | |Behavioural |is imperative that project manger’s have very strong leadership skills as | | | | |resources still report to the functional managers and are not direct | | | | |reports of the project manager. This is clearly not the case in terms of | | | | |the Trophy project. | | | |Project manager allowed the assistant project manager to make a key | | | | |decision to acquire a new computer program to track problems and progress. | | | | |This is poor judgment on behalf of the project manager and shows up he’s | | | |Behavioural |lack of experience. | | | | |Poor leadership on behalf of top management. 1) Assigning a project | | | | |manager in a project driven matrix organsation with poor leadership skills. | | | | |(2) Trying to resolve the behavioural problems by ‘throwing’ more staffing | | | | |resources at it. (3) Creating a climate of fear (top down, old economy, | | | | |bureaucratic approach) by threatening the project manager. | |2. Lack of Value System |Behavioural / |Seems to be a lack of corporate strategy (pattern of vision, goals, | | | |Structural |objectives and policy). | | | | |Leadership within organisation not living the value system – no role | | | | |modeling resulting in lack of integrity of the part of the functional | | | | |managers and rest of the organisation. | |3. Dysfunctional Matrix |Structural/ |The issue regarding dual responsibilities of resources which is a key | | | |Behavioural |feature of a matrix type organisation is clearly evident in the Trophy | | | | |project. The project manager is not able to successfully negotiate | | | | |resources to work 100% on the project. | | | | |Project manager seems to have lack of authority over resources and budget. | | | |The project manager having to report to the operations manager after | | | | |highlighting all of the problems. | |4. |Poor Psychological Climate |Behavioural |Lack of trust between (1) the project manager and functional managers (2) | | | | |between the client and the project manager (3) between the customer and the| | | | |vendor. | | | |Customer appointed an “on-site” representative at the project on a daily | | | | |basis. | | | | |Constant scope changes caused deterioration of relationship between | | | | |customer and vendor. | | | | |Lack of cohesion and team work on the part of the functional managers and | | | | |assigned resources.

This takes away efficiency and brings down the | | | | |performance of the organisation. | | | | |Unethical behaviour on the part of the functional managers for charging | | | | |direct labour time to the Trophy project while working on “pet” projects. | | | | |Lack of accountability on behalf of the functional managers for unethical | | | | |behaviour. |5. |Poor Project Planning and |Behavioural/ |Seems to be no formal communication structure in place between (1) project | | |Control |Operational |manager and functional managers (2) project manager and top management (3) | | | | |project manager and vendors (4) project manager and customers. | | | | |Control of budget was not in the hands of the project manager. | | | |Scope changes not properly documented and signed off which had financial | | | | |impacts on the project. | |6. |Poorly Functioning Project |Behavioural/ |It took six months before top management was aware of all of the issues | | |Office |Structural |highlighted by the project manager.

This should have filtered up from the | | | | |project office to top management from the start of the project. | | | | |Project manager had no support from project office regarding budget and | | | | |staffing problems and was told to “back off”. | |7. Lack of Customer Focus |Behavioural |Not enough emphasis on customer requirements. After issues were brought to | | | | |the fore, the main concern for top management was to get the project on | | | | |schedule as opposed to ensuring that that relationship with customer was | | | | |properly managed.

Project manager spent most of he’s time writing up | | | | |reports for top management instead of managing the project and keeping the | | | | |customer happy. | | | |Customer requested the division general manager and he’s staff to visit | | | | |customer however, division manager sent the project manger and functional | | | | |manager instead to placate the customer. | |8. |Bureaucratic Organisation |Structural/ |Top down approach displayed by top management. | | |Behavioural |No coaching and mentoring on behalf of top management for the project | | | | |manager. Threatened the project manager in an attempt to get the project | | | | |back on track. | | | | |Sense of complacency amongst top management. |9. |Poor Communication |Structural/ |No formalised structure when communicating with the functional managers – | | | |Behavioural |they were always unclear about their roles and responsibilities regarding | | | | |the Trophy project. | | | | Appears to be a missing link in communication between the project manager | | | | |and top management – it took six months before the issues raised by the | | | | |project manager regarding staff resources, budgeting and slippage in the | | | | |project schedule reached top management. | |10. |Lack of Systems Thinking |Operational |No performance measurement in place. | | | |Absence of a quality management system. | |11. |Unclear Roles and |Behavioural |Functional managers always seemed to be unclear of their roles right from | | |Responsibilities | |the start. They assigned team members to the project but allowed them to | | | | |work on other projects as well. Focus of functional managers remained in | | | | |“pet” projects. | | | |Functional managers still did not provide adequate staff as they assumed | | | | |the additional staff received by top management was enough. | Table 1: Root Cause Identification key affected business areas 1 Dearth of Key Business Areas Table 2 depicts Likert’s system of management (Online: n. d. ) whereby he surveyed hundreds of managers and discovered that the closer the system of management was to the fourth system, the more productive the department was.

Thus, the following equation is relative: “Productivity = Trust + Motivation + Interaction” [pic] Table 2: Organizational and Performance Characteristics of Different Management Systems When studying the Trophy Project it is evident that some of the Key Business Areas would include project management, customer focus, vendor interaction, project success and the ability to highlight any concerns. With reference to Table 3, we are of the opinion that the Trophy Project relates to System 1. Trust does not exist as managers continued with their “pet” projects while booking time against the Trophy Project.

A dearth of motivation suffocates Reichart as he was openly threatened by the vice president. Interaction was prohibited as Reichart was told not to meddle. System 1 guarantees productivity meltdown. The direct impact is the failure of the above mentioned key business areas. A bureaucratic leadership style prevails with the “I tell you do” mindset. Clearly there is no sense of a value system, thus it appears difficult to distinguish between right and wrong. Another key business area destroyer would be human talent. The correct talent must be placed in the correct role.

Reichart was never the man for the job. The decision to make him project manager identifies the weak bureaucratic leadership style which exits among senior management. recommendations If recommendations for the Trophy Project was put forward i. e. focused on in isolation, it would still be a failure. The focus must be placed on the organisation as a whole. The recommendations approach to the organisation would have to be one that focuses on the lowest level of organisations managements systems. John Kotter’s approach to changing an organisation (Kotter, 1996) has been identified.

Figure 2 depicts Kotter’s eight steps that are required to bring about an organisational change categorised into three phases. In the section to follow, the three phases will be discussed by incorporating its related steps. [pic] Figure 2: Kotter’s Eight Steps for Leading Organisational Transformation and Change 1 Creating a Climate for Change 1 Increase Urgency Kotter suggests that for change to be successful, 75% of an organisations management must buy in to the change. We would recommend that the organisation should knit together and identify potential threats and explore opportunities.

A culture change to remain honest and promote input from employees would be required. 2 Build the Guiding Team At this early stage, it must be highlighted that strong transactional leadership is required to be put in place. Bureaucratic leaders as in the case of the Trophy project would want to manage change but a transactional leader would lead the change. Team structures must also be visited as a productive team will require the correct talent for the correct role. The aim would be to move towards a System 4 management style while keeping up the momentum for change. Get the Right Vision As we are different individuals, we have different ideas. This will inhibit the willingness for change. The organisation will be required to develop a clear vision while taking into consideration the input of others. A good value system must be put in place which will outline which activities are acceptable in the organisation and those which are not. A simple value system like speed, simplicity and trust should be at the very heart of organisational decision making. 2 Engaging and Enabling the Whole Organisation Communicate for Buy In Often organisations make the mistake of creating a powerful vision, but it does not filter down to all levels in the organisation. The vision should be clearly communicated. This could take on different forms i. e. spoken about on a regular basis, print and hang posters of the vision throughout the organisation, ensure each staff member has a soft copy of the vision and road shows by leaders within the organisation with question and answer sessions. 2 Empower Action Human behaviour is often subjected to resistance to change.

This could be caused by individuals who built an empire for themselves and now feel vulnerable due to change. In these circumstances as commitment to change is required, a good option is to introduce change leaders in the organisation. The leaders must be trained to understand the vision of the organisation and how they can influence others positively. 3 Create Short Term Wins In order to keep up the momentum of change, it is highly recommended that short term achievements are put in place which eventually builds up over a period of time to the ultimate goal.

With regards to the Trophy project, the ultimate goal would be a System 4 management capability. The short term goals would include open communication thus ensuring the ability to raise any concerns. Leadership should implement leading the change and not managing the change. 3 Implementing and Sustaining Change 1 Don’t Let Up A review step in any process or vision indicates continual improvement. It is not optional to skip this step. Changes to the organisation cannot be viewed as a project, it must be viewed as a journey.

A time cannot be stipulated up front which dictates when the process should end. All wins and losses along the way must be revisited as this will ensure that the journey continues. A review step also ensures that the momentum of change is carried on. 2 Make it Stick Increasing productivity is dependent on trust, motivation and interaction. This comes under pressure when new people enter the organisation. To ensure that the legacy of change is not lost, it must be deeply embedded within the organisations culture.

When hiring new staff it is imperative that HR introduces the culture to the new recruits as this will form their foundation for the benefit of the organisation. Taking cognisance of the approach described above, Table 3 outlines recommendations prioritised and cross referenced against the problems and causes in Table 1. |No |Proposed Solutions / Recommendations |Problem Addressed |Priority | |1. |Implement a Strategic Transformation and Change Management Programme 1, 2, 4, 7 |High – | | |Implement a Strategic Transformation Programme Office | |implement immediately | |2. |Become a BSPM Learning Organisation |7, 8, 9, 10 |High – | | |Move to cross-functional programme portfolio management | |implement within first 3 months | | |Implement a Balanced Scorecard (BS) | | | |3. Employ a new Chief Portfolio Officer (CPO) |3, 5, 6, 9, 11 |High – | | | | |implement within first 3 months | |4. |Implement a Continuous Improvement Programme Office |9 |Medium – | | | | |implement within 6 to 12 months | |5. Become ISO 9001 compliant |8, 6 |Medium – | | | | |implement within 6 to 12 months | Table 3: Recommended Solutions 4 Implement a Strategic Transformation and Change Management Programme It is evident from the case study that the organisation requires a radical change in terms of corporate strategy to be implemented via a change management programme.

The organisation seems to reflect a number of the early warning signs of organisational decline (Steyn, 2010:) – Disproportionate staff power – Scarcity of clear goals and decision benchmarks – Loss of effective communication – Outdated organisational structures – Resistance to change – Special interest groups are more vocal – Decreased innovation The organisation also seems to lack a sound value system linked to the organisations strategy. The value system is the constitution of the organisation that everybody lives by.

Leaders in particular should live the value system and serve as role models to the rest of the company. In order for change management to be effective, it must be noted that it’s vital that the behaviour of the people needs to change. Effective change requires reinforcing new attitudes, behaviours and organisational practices. Successful change management programmes therefore requires the following elements to be present – refer to Figure 3: [pic] Figure 3: Elements of Successful Change Management Programme

In order to facilitate this change, it is recommended that a programme office for strategic transformation and change be set up. Due to the nature of the change i. e. radical as opposed to innovative/improvement, it is suggested that the office consist of external staff. This office should be a non-permanent office. It is envisaged that the office will remain for a period of 6 to 12 months due to the radical transformation required. Thereafter, a handover to a continuous improvement project team should be done. 5 Become a Balanced Scorecard Programme Management (BSPM) Learning Organisation

According to Steyn (2010:2), traditional bureaucratic organisations of today are becoming obsolete. This is mostly due to the fact that these organisations are unable to cope with the pace of transformation and change exerted by the economic environment of today. This fast rate of change requires agility and high levels of co-ordination which can be achieved through effective and efficient programme management. It is recommended that the organisation move towards a model of utilising cross-functional programme portfolio management coupled with a Balanced Scorecard (BS).

According to Steyn (2010:5), this approach provides the ability to effectively and efficiently coordinate and integrate cross-functional processes into a single system that delivers organisational benefits of strategic importance. This approach also allows for the effective measurement and monitoring of key performance indicators (KPI’s). The Balanced Scorecard created by Kaplan and Norton (Kaplan S, Norton, P: 1996) is a tool that is able to easily communicate the organisations vision and strategy. It is based on a system of Total Quality Management (TQM).

It allows for the identification of the organisations Critical Success Factors (CSF’s) linked to Key Performance Indicators to measure strategic benefits achieved within the organisation. See Figure 4. [pic] Figure 4: Balanced Scorecard Source: www. balancedscorecard. org [pic] Figure 5: BSPM Learning Organisation Value Chain Schematic Source: Steyn, P. 2010. The Need for a Chief Portfolio Officer (CPO) in Organisations. PM World Today, 12(7):5, July. The organisation should focus on the following key principles: Key Principle |Application Within the Organisation | |Translate strategy to operational terms |Implement a strategy map to link strategic objectives to operations | | |and budgets | |Align the organisation to create synergy |Implement a programme office | |Make strategy everyone’s everyday job |Link incentive bonuses to company strategy | |Make strategy a continual process |Implement a continuous improvement programme office | |Mobilise change through executive leadership |Leaders to live the company values and thereby obtain “buy-in” from | | |the rest of the company | 6 Employ a new Chief Portfolio Officer (CPO) It is suggested that a CPO be appointed to support the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief Operating Officer (COO). The CPO will ensure that a prioritised portfolio of projects based on strategic importance as agreed upon by the company or top management is maintained at all times. [pic]

Figure 6: The Emergent Role of Chief Portfolio Officer (CPO) Source: Steyn, P. 2010. The Need for a Chief Portfolio Officer (CPO) in Organisations. PM World Today, 12(7):5, July. 7 Implement a Continuous Improvement Programme Office One of the key aspects of the BSPM learning organisation is that of the continuous improvement of staff which ultimately leads to the creation of high performing teams. According to Steyn (2010:6), one of the main advantages of becoming a BSPM learning organisation is that of organisational effectiveness and efficiency as the company is focused on continuously improving human talent, processes, infrastructure, technology and systems. Become ISO 9001 Compliant By becoming ISO 9001 compliant, the company will be forced to implement continuous improvement projects in order to pass the ISO 9001 audits. This will essentially steer the company away from bureaucratic/old economy thinking towards new economy thinking. This will also ensure that the company will not require radical changes to be implemented. conclusion It is evident that the Trophy project is in dire need of an organizational shift. For the implementation of a strategic transformation and change management programme to be successful, 75% of the organisation management and employees must buy in to the change (Kotter, 1996).

Adapting to a balanced scorecard programme approach will allow for effective measurement of key performance indicators to be able to communicate the organization’s vision and strategy. Strong leaders by appointing a CPO are required with the aim to move towards a System 4 management style to get the right vision in place and to promote a good value system by introducing change leaders in the organization. bibliograhpy • Balanced Scorecard Institute, a Strategy Management Group company. 1998-2011. [Online]. Available from: http://www. balancedscorecard. org/BSCResources/AbouttheBalancedScorecard/tabid /55/Default. aspx [Accessed 01/09/2011]. • Kaplan, Robert S and Norton, David P. The Balanced Scorecard.

Boston: Harvard University Press, 1996. • Kotter, John P. 2006. Leading Change. Boston: Harvard Business School Press • Kouzes J. M. , Posner B. Z. 2008. The Leadership Challenge. 4th edition. • Likert, R. Organisational Development Portal. [Online]. Available from: http://www. odportal. com/leadership/fastlearner/likert. htm [Accessed 01/09/2011]. • Mind Tools LTD. [Online]. Available from: http://www. mindtools. com/pages/article/newPPM_82. htm [Accessed 01/09/2011] • Steyn, P. 2010. The Need for a Chief Portfolio Officer (CPO) in Organisations. PM World Today, 12(7). Available from: http://www. pmworldtoday. net [Accessed 01/09/2011]. Steyn, P and Schmikl, E. Module M2 – Programme Managing Organisational Performance and Innovative Improvement (Study Guide). Cranefield College of Project and Programme Management, 2010. ———————– Programme Managing Organisational Performance and Innovative Improvement (M2) “We hereby declare that this assignment is entirely our own work, and that it has not previously been submitted to any other Higher Education Institution. We also declare that all published and unpublished sources have been fully acknowledged and properly referenced. This includes figures, tables and exhibits. Where modified by me, this has also been indicated. ” Name |Student Number |Signature | |Gavin Johnson |7707285108083 | | |Denaneer Rylands |7503310100082 | | |Abigail Carolus |7605190225085 | | |Roy Le Roux | | | |Sylvia Elago |75032010200 | |

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