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July 2010

Leading at the “Leading Edge of Validated Management Practice”

Last month I wrote about ten recommendations for governance boards to govern at the leading edge of validated management practice. It seems only fair, and in keeping with my willingness to wade into murky (if not troubled) waters, to look at the other key contributor to good governance: the CEO or senior leader of the enterprise. But let me first pay homage to a great leader from the history of the Baldrige Program, Arnie Weimerskirch, who chaired our Panel of Judges in the early 1990s and initiated the concept that the Baldrige Criteria should always reflect “the leading edge of validated management practice.” His guidance has been our mantra ever since. And I believe Baldrige Award recipient organizations’ CEOs exhibit leading-edge leadership. In fact, a few years ago we took a retrospective look at the scoring profiles of our Award recipients across all sectors (business, education, and health care) and found that the single highest-scoring Criteria Item for all these organizations was Item 1.1, which deals with senior leadership.

I have a strong belief in the critical role of senior leadership. I recall a study by Marshall Goldsmith in which he reported on the challenges of being a good senior leader, including the ego challenges senior leaders face. He asked over 50,000 leaders to rate themselves relative to their peers. About 60 percent rated themselves in the top 10 percent of their peer group, almost 85 percent rated themselves in the top 20 percent, and over 98 percent rated themselves in the “top half.” According to Goldsmith, successful people tend to attribute good results to their leadership without “validating” the assertion.

So what does it take to lead at the leading edge of validated management practice? Here is my list of 11 recommendations and considerations for senior leaders ten years into the 21st century:

  • Set the vision and think strategically. Understanding your organization’s current situation but not shying away from a bold vision and achieving a realistic strategy for sustaining the enterprise is the role of the CEO—and the expectation of your employees. Successful leadership requires an ability to execute strategy and an understanding of the core competencies the organization needs to enhance, develop, and sustain itself.

  • Live by your stated values and ethics. It is not enough to have a list of values and an ethics policy; you must be the role model for adhering to them and using them as the ultimate decision tool in difficult situations. Trust is built when you demonstrate that you lead a values-based organization. And trust builds loyalty.

  • There is no such thing as business as usual. That concept is history. Today you have to be prepared for ambiguity and agility. Design your management systems to accommodate uncertainty and change. Be prepared to take intelligent risks that will build the organization if actions are successful and not devastate it if unsuccessful.

  • Manage by fact. Data, information, and analysis are the bases for making good decisions and taking intelligent risks. Metrics are needed not only for outcomes measures but also for in-process and leading measures so that you know when to change course or stop an exploratory effort.

  • Leave time for reflection and crises. McKinsey & Company has stated that you should expect at least one potentially career-threatening event a year. Time pressures are always great, and reserving time for thinking is necessary but hard to do. A corollary is to decide which activities do not require your time and will be delegated.

  • Build a trusted executive team. You must be able to rely on this team in difficult situations. Abraham Lincoln built a cabinet that was composed of a team of rivals. While a team of rivals is not essential, the opportunity to disagree and debate is important to achieving good decisions. Once decisions are made, trust and loyalty are important.

  • Build a relationship with your board. Know your board members individually and their individual strengths. Build a professional relationship with each of them that is based on mutual respect.

  • View situations through the eyes of your customers and stakeholders. They are critical to sustaining your enterprise. Anticipate their reactions, needs, and desires. How would they advise you if they had to make your decisions?

  • Celebrate and reward success. We often are too quick to punish failure (rather than analyze and learn from it) and concentrate on challenges. We need to spend more energy on celebrating successes, even interim milestones, to build morale and commitment to continue. Stretch goals are achieved through extraordinary commitment.

  • Develop talent and continue to learn. Your biggest legacy may well be the talent you develop to permit continuity in leadership and innovation to flourish. Capitalizing on the insights of that talent keeps them engaged, accelerates growth, and fosters your own learning.

  • Communicate, communicate, communicate! Communication with all stakeholders should be regular, not episodic or solely event-driven. Communication requires speaking, listening, and hearing what is on employees’ and other stakeholders’ minds. Take advantage of face-to-face, written, and electronic modes of communication. Communication can be an important leverage point.

In case you would like to consider some of these ideas further, here are some of my recent readings on the topic: Rethink Your Strategy: An Urgent Memo to the CEO, Letter to a Newly Appointed CEO, Celebrating Peter Drucker, My Transition Story, and Capitalizing on Complexity: Insights from the 2010 IBM Global CEO Study. Of course, I also learn from Baldrige Award recipients and always try to reflect our validated learnings in the Criteria for Performance Excellence.

This is my fourth Insights column since we introduced the new Baldrige Web site. Please give me some feedback. Have a good summer!

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Dr. Harry Hertz, Director
Baldrige Performance Excellence Program


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