Equipping Process Professionals with Leadership Skills

"The principle aim [of leadership] is to help people do a better job, improving quality in everything," says Hazel Cannon of the UK-based Deming Forum. This means improving "your product, your services, your employees, stakeholders, customers, suppliers."

In this interview, an edited transcript from a recent podcast with Hazel Cannon,discusses the importance of treating leadership as a skill or capability to be developed, the specific capabilities required to lead effective change, and even recommends steps that process professionals could do right now in their jobs to be more effective leaders. Listen to the original podcast here: "Wanted: Leadership Skills for Business Transformation"

Want to find out more about leading business transformation or how the works of W. Edwards Deming still apply today? The Deming Forum hosted a online Q&A on the PEX Week LIVE blog about how Deming applies in the twenty-first century. See the results of the Q&A on the live blog on www.pexnetwork.com/pexweeklive.

Do you think it's true that often in quality or process improvements or continuous improvement or whatever else we may call it, that sometimes those who are supposed to be leading business change really aren't equipped with the leadership skills that are necessary to lead it?

Hazel Cannon: Yes, I think that's true in some cases. People will have been trained in process skills or be experts in a particular discipline like Six Sigma, but not necessarily in the leadership and management skills or attributes. It's an interesting phenomenon to me that many people are promoted because of their abilities in a previous job or project that they worked on. Somehow between the promotion letter on the Friday and sitting at the leader's desk on the Monday, we expect them to understand the key issues and have developed the appropriate management skills to deal with their new position. That's one of the first things that I think that we need to consider.

I also believe there's a myth around the definition of true leaders and the belief that they're born rather than made. That may be accurate when you think of some great historical characters, but while I believe the leaders of changing organisations do need some innate characteristics, I also believe that they need training and development in management skills and given guidance and mentoring in the necessary leadership attributes. I see that skills and attributes are slightly different things. The issue for me is that some organisations don't even see leadership as a specific discipline or attribute that needs to be taught, developed and honed.

Why do you think that is? Picking up on your last point, why do some organisations not even understand leadership as a specific discipline?

Secondly, many business skills are not teaching the leadership skills that are necessary for an organisation. Rather, they teach how to manage by the visible numbers.

It's interesting to stop for a moment and look at how the business school model developed.

In the brilliant book The Puritan Gift,Will and Kenneth Hopper tell the history of how the chairman of General Electric in the late 50s, Ralph Cordiner, scoured the business schools looking for those that would provide him with so-called management experts. These were flexible managers who could present and argue the right numbers. Cordiner published a book called The New Frontiers in Professional Management, which, in fact, was an early manifesto for the business school counter-culture. This was the concept that wonderfully mobile "professional managers" trained in the classroom could manage any kind of business without really knowing very much about it.

Later, Dr Deming, the management guru who helped transform Japan, he described those business degrees as a cruel hoax. He said, quite curtly, that an MBA teaches managers how to take over companies and not how to run them.

In their book, the Hopper brothers stress the importance of domain knowledge – i.e. understanding the industry that you're in. And they also talk about the essential components of effective leadership. They describe managers and leaders using three headings. The first one is a generalist, the person who genuinely possesses skills of general management. They are skilled in handling people – they’re the so-called "people persons" - who are required in any organisation. The second is a well rounded person who has a profound understanding of the sector they work in, and that gives them a sound foundation on which to develop and build their leadership skills. And the third is the "professional" who's neither generalist nor rounded and lacks the domain knowledge and who principally sees the world of business in statistical and financial terms.

The fallacy that's taught by many business schools is that management can still be learned in theory or abstract in almost an academic setting and then practised in any organisation. So, in fact, process professionals who understand the industry they're in are really well placed to become effective leaders of organisations in the future.

What's lacking now though? What are the skills that process professionals need to better lead change within their organisations?

Hazel Cannon: Well, there's a wonderful educator and author, Peter Scholtes, and he uses a great example in his book, The Leader's Handbook. He talks about the magic eye art, I don't know if you remember it. Initially, you see an array of colours and patterns. However, you can learn to focus your eyes in a special way that allows a three dimensional image to emerge from the array of colours. And suddenly, you'll hear some people saying "look, it's a car or it's a giraffe" or whatever the photograph has hidden. And it depends on how you focus, but you need to learn to focus differently. So two people can look at the same picture and only one will see the colours on the surface, but the other will see something entirely different; the 3-D image that's hidden deeper underneath the surface. And I think the same is true of leadership; you need to see different things, depending on which lens you focus through.

So the skills and attributes for leading change in an organisation includes those developed and researched by Scholtes, whom I mentioned, Dr Deming, definitely the Toyota Corporation and those outlined by Ken and Will Hopper. Those methods have stood the test of time and they give you a sense of constancy of purpose. And that's the one leadership commodity that I think is fairly scarce at the moment.

The need to search for the latest fad or quick fix is a huge industry and it's highly distracting. But real process professionals, recognise that it's only through discipline, involvement, development and rigorous process that you're going to achieve sustainable achievement. So constancy of purpose is essential to provide your long-range needs rather than short-term profitability, because that's going to allow you to become competitive and to stay in business and provide jobs.

Could you elaborate on exactly what those skills and attributes would be?

Hazel Cannon: I think there are probably six principle areas of competency that leaders can develop. I'll outline them and then give you some more detail. The first is the ability to think in terms of systems. Then the second is you need to understand the variability of work and planning and problem solving. The third is to understand how people learn and develop and improve, so that leaders can ensure there's true learning and sustainable improvement. Then we need to understand the psychology of change; why people behave the way they do. The fifth is to understand interactions and interdependencies. And then, finally, I think leaders need to give vision, meaning, direction and some kind of overall focus to the organisation.

So the principle aim is to help people do a better job, improving quality in everything: your product, your services, your employees, stakeholders, customers, suppliers. In fact, quality in all parts of your system. Leaders need to have the ability to think in terms of the big system and view the organisation as a flow diagram, flowing towards the customer rather than what you normally see, which is a hierarchical diagram. It's important that they not only improve the system, but they learn to innovate. You need to be able to break down barriers between the departments and functions and maybe create opportunities where different areas work together to design and improve, not just to tackle problems. And one of the things that's not really discussed very much, but which I think is very important, is that leaders need to be able to drive out the fear and anxiety that is rife in many organisations, especially today. They need to encourage effective multi-level communication, so everyone is informed and they can work cooperatively and optimise their efforts in the organisation. So helping people do a better job means that leaders need to understand the business that they're in and what goes on in their organisations.

Good leaders need to use their power or authority and their knowledge and their persuasive power to streamline flows and remove the things that genuinely frustrate people and take the pride and the joy out of their jobs. I said they need to have the knowledge to help understand variability. It's not just in things like parts and processes, it's understanding that people learn in different ways and that people are different, so you have that profound understanding, then you can stop ranking and rating individuals in departments. You can ditch arbitrary targets and, quite frankly, meaningless statements like zero defect.

Process professionals who are leaders can then have that freedom to use their knowledge to ensure the systems and processes are in control - your objective then becomes to continuously reduce variation.

That's what the Japanese car and electronic firms did. Once you understand that, you can move away from things like annual performance appraisal and have regular conversations with people, not to judge them, but to listen. And that gives you the agenda for the barriers that you need to remove. One of the big mistakes that General Electric made was to start ranking their people and then get rid of the bottom 10%. The trouble is that nobody knew if the bottom 10% were better or worse than people in other organisations. They lost all those employees. Cooperation must have gone right out of the window. So process professionals are well skilled in leading and teaching skills and methods for improvement and if we add some deeper knowledge of the psychology of people and the psychology of change, then we've got flexible learning organisations that are able to continually adapt and improve.

It's not easy to create the levels of trust in an environment that will encourage freedom and innovation. You've got to allow for the possibility of failure. You have to understand the need for small-scale trials. And that's another benefit that process professionals bring to the party - they understand some of the pointlessness of exhortations and poster campaigns and demanding zero defects or increased productivity without providing processes and methods to achieve what you want.

I also think the sign of a good leader is someone who can provide a compelling vision for the organisation that gives meaning and direction, so that people know where to focus. That way, they can enable the levels of cooperation and value added activity that I think is going to ensure success for the long-term, not just the short-term.

Do you think that the skills necessary to lead change in organisations are the same as they were, say, ten or 20 years ago?

Hazel Cannon: I think if you're talking about the skills are necessary, then probably many of them are still the same. However, the skills that are practised today have lost a lot of the tried and tested management skills that were around in the middle of the last century where leaders then rose through the ranks of organisations. They were developing their craft and they were being mentored by leaders.

If you read The Puritan Gift by the Hoppers, many examples of this style can be found. For example, in the late 40s and early 50s, Procter & Gamble, introduced a preferred supplier policy, and that helped them reduce the variation in incoming products and ensured that the quality level of components delivered to the manufacturing department was good. They had an extensive training on the job programme, and encouraged people from research, design, sales, production to work together, as had many other companies during that era.

Counter that with the mid 80s when the American phone giant, AT&T totally failed to appreciate the potential of wireless technology. They'd hired a major consultancy to report on wireless communication prospects and the firm famously estimated that they reckoned that there would be fewer than a million cellular phones by the year 2000. I understand that by the time 2000 rolled around there 741 million cellular phones!

Of course, it's really difficult for anyone to predict what will happen in the future, but in a company like AT&T, their employees would know more about the technology of communication than anyone else in the world. Why did the company's new masters seek the advice of a firm of consultants? I think apart from indulging in what was, then, the latest managerial fad of outsourcing strategic decision making, the basic thing was that the company's new masters were ignorant of the technology because they didn't have the domain knowledge or a history in telecommunications.

Another thing that's holding companies back is I think that people are often keen to introduce new systems but forget to cancel the old ones. The brilliant thinker, Russell Ackoff in his book Ackoff's Fables, talks about how your people, your employees and your customers, actually, use their creativity to beat a system that's no longer appropriate. And he cites Robert Townsend author of Up the Organisation, which recounts the story of how the British created a civil service job in 1803 that called for some poor soul to stand on the cliffs of Dover. He was supposed to ring a bell if he saw Napoleon coming. And you know when the job was abolished? In 1945!

So to be nimble and ready for the future, I think we need to identify three areas of activity. First, I think we need to identify the things that we do that were appropriate once but aren't necessarily appropriate now, a bit like the example I've just given. And the second is the things that we do now that we need to continue. And the third is the things that we need to develop and do in the future. So discontinue the first, build on the second and introduce the third.

What could someone out there reading this interview do differently right now in order to incorporate some of these principles into their work?

Hazel Cannon: Well, the first thing I'd suggest is the example of the magic eye pictures. Focus on the situation, not just looking at the surface, but using your knowledge as a lens to see past the surface in order to understand the potential patterns underneath. When you're looking at improvements in specific areas, you'll stop and consider the wider system. Understand that the changes you're going to make will cause issues elsewhere. As every process professional knows, a system is made up of inter-related components and parts and you can't change something in one place without understanding the potential implications.

A good example for me in the news right now is the proposal to increase, once again, the tax on fuel. Now, I know of several local small businesses whose employees are on basic wages and they have to travel maybe 40 or 50 miles a day to their place of work here. Even at the current price of fuel, several of them can't afford to work here any more and have, in agreement with their employers, had to give up their jobs. And the reason they were travelling long distances is because there wasn't suitable employment near where they lived. Now several of them are claiming unemployment benefit. So while the fuel tax is going to bring in additional revenue, significantly more revenue is possibly being paid out in unemployment benefit. So whilst one part of the system may take a win, another is taking a loss.

Regardless of the politics, I’m trying to demonstrate the system perspective. The fundamental question is; has the bigger system been optimised or not? Just think of the potential in your organisational systems; are the changes that you're about to adopt optimising the whole system or are they creating a win in your area but an overall loss to the organisation?

Another great thing you could do is to generate some simple run-charts of your daily or weekly or monthly results and when you go to the next management meeting, don't get involved in excuses and justifications as to why this month is 2% better or worse than last month or the same month last year. Why not produce your run-chart and show whether or not the results was reasonably predictable. You could also learn a lesson from AT&T's mistake and listen to the people immersed in your work for ideas and opportunities rather than employing outsiders. And by listening and involving more people in the processes, you're likely to delve deeper, understand more and have the added benefit of their involvement and support for the change.