Chapter 16
Maintaining A Competitive Advantage

Good leadership can have dramatic effects on corporate performance at all levels. Well-led teams produce significantly greater output than do poorly led teams, and they suffer fewer conflicts and less stress. Therefore, effective leadership is crucial to maintaining a competitive advantage in the global marketplace.

To maintain a competitive advantage, the global leader must guide the organization to produce better results faster; share knowledge; train and empower others to improve existing systems, products, and services; streamline the company; eliminate waste and unneeded cost; provide high-quality, unique products; and achieve results that will add long-term value to the shareholder.

Performance: Faster, Better

In the modern marketplace, global or local, no company can hope to achieve world-class performance in everything it does, yet, increasingly, that is what is needed to stay competitive against all kinds of rivals. For instance, a large healthcare organization has a formal program in place in which monthly customer satisfaction surveys are used to measure how effectively its strategies are being executed. Those hospitals that measure 85 percent satisfaction are considered four-star hospitals; those that rate 90 percent satisfaction are five-star hospitals. The organization's goal is to have every hospital in its system at 100 percent.

One thing driving the changes in my leadership role is the stress to constantly perform from quarter to quarter—faster and faster.^[1]

For many companies, the solution is to decide on what its corporate core competencies are (or should be), and rely on partners for the rest

It is important to protect the values of the company, but at the same time, embrace the vision and move forward faster than any of the competitors. Constant awareness of the market changes and reacting quickly are important in order to move ahead.^[2]

A new technology, a new territory, or a new channel of distribution may not be a realistic prospect except through an alliance; the superior performance required from data systems may be accessible only if they are outsourced to a specialist. A company might form an alliance to outsource the manufacturing of a component of a product to another organization. For example, Intel builds the processors used in many PCs. Companies might also outsource a transaction that is part of an entire process. Business process outsourcing (BPO) refers to the transaction component of the data that flows through the system. Because so many organizations are on overload and finding it impossible to do everything from sales to marketing, transaction processing to customer service, and human resources, companies that fill specific niche operations are forming. For instance, in the healthcare industry a larger organization might hire a niche company to handle its customer service, claims recovery, or billing. In this way, the company offloads those transactional processes to a specialist while retaining its core competency.

In such cases, leaders have to work with partners and inspire management teams over which they may have little or no direct control. For instance, Accenture temporarily outsourced one of its leaders to assist a large Australian financial services firm during a period of significant change. The leader was made resident at the firm and given the high-ranking title of CIO. The CIO was expected to run the firm's technology organization during the company's projected six-month to one-year transition from a privately held to a publicly held company; however, because of his inspiring leadership style and the value that he brought to the firm, he held this position for an unexpected four years.

Team leaders, conversely, need the skill to satisfy two or more masters whose underlying objectives and expectations may be at variance, while enthusing their own staff with a coherent and compelling vision. Recently, Accenture was asked by a large international insurance company to overlay its management style and culture on the company's leadership team. As a result, the client's peer review procedure was changed. Employees were reviewed not only by their department manager, but also by team leaders from Accenture. In this way, employees were reviewed on the basis of how they were using Accenture methodologies and project management skills, and also on the basis of how they were living the values of the client company. If this type of leadership is to work, both companies must openly collaborate, sharing information, methodologies, and performance management tools with each other.

Intellectual Capital

Former leadership styles rested not just on personal dominance—they tacitly assumed that the leader, like the captain of a ship, had all the information at his or her command to enable him or her to plot the right course and make the right decisions. However, the concept of intellectual capital—ranging from the patents and technical know-how through corporate systems and databases to customer goodwill and individual skills and experience—implies that the assumption that the leader has all the answers at his or her fingertips is no longer valid (if it ever was). For example, in 1999 Hershey Foods Corporation launched an SAP AG system to automate shipments of candies in time for Halloween. When the supply chain component malfunctioned, Hershey didn't know which orders to fill or which orders had been filled, and they didn't have an inventory. The company ended up losing $150 million in candy sales. Rather than becoming adversarial, the management teams of SAP and Hershey worked together, using their experience, know-how, and intellectual capital to correct the problem.^[3]

Intellectual capital is distributed throughout the organization through human and computer networks, and success depends on the speed and effectiveness with which this capital is deployed. Thus, an organization's real competitive advantage is the people of the company, because everything can be copied so quickly that you can be first to market something, but three months later you are no longer first. A level of continuous innovation needs to be reached through people.^[4] Barnes and Noble gained the advantage on its competition, Borders Group, by actively putting its employees to work on making the company successful on the World Wide Web. Barnes and Noble increased sales and thus the value of its stock through its innovative use of the Web. Borders dragged behind Barnes and Noble in making the speed-to-value judgment on the Web, and as a result it has been less successful in recent years.

Technology can marshal information, process it, analyze it, and focus it in new and ever more powerful ways. The use of e-commerce to distribute information to consumers has become incredibly pervasive. For instance, people are now learning about their health conditions through information found on the Web. In addition, consumers are now more actively participating in their healthcare management; for example, by investigating treatments and medications, consumers can have informed input in determining their care.

Intranets make information available instantly around the globe. As a result of this global accessibility of information, governments are rapidly creating, instituting, and changing regulations, safeguards, and assurances in order to ensure that the information distributed on the Web is correct. For instance, senior executives, such as the CFO and CEO, now must sign financial statements confirming that the information included in the statement is valid and accurate.

But the quantity and complexity of global challenges mean that leaders can no longer claim to know everything, whether in operations or strategy. The speed of change requires people on the frontlines to be not only empowered to make decisions, but accountable for those decisions on the basis of their own bank of knowledge and experience.

Eliminate Waste and Unnecessary Cost

As technology and global competition incite ever-shortening deadlines, global leaders must do more in less time with fewer resources.

The driver for change will be that leaders will have to be increasingly more efficient with less.^[5]

Eliminating waste and unnecessary cost is an important aspect of the global leader's role. It can lead to increased profitability and a stronger, better equipped, and more adaptable organization. As can be seen in the following quotes, the organizational structure of the company is, for many, the place to begin making changes.

1. Eliminate bureaucracy: Leaders will need to train and empower people to leverage their knowledge and make decisions on the frontlines without having to go through layers and layers of bureaucracy.^[6]
2. Eliminate structure: Companies will require a lean structure in the future, because it makes decision making faster and it makes it easier to respond to the rapidly changing marketplace.^[7]
3. Eliminate layers: The organizational structure will be flatter because multilevel companies have more overhead and are less flexible.^[8]
4. Eliminate highly specialized jobs: The future companies will have more individuals who are multidisciplinary.^[9] This change can be seen in many industries. For example, in the past, many consulting companies set up specialized industry areas, such as telecommunications, high-tech, healthcare, human resources, and financial services. In addition, consultants were valued for competencies in area specialties, such as strategy, human performance, and process. Now, as industry boundaries shift and overlap, we are starting to see that competence and understanding across disciplines and incorporating a wide range of perspectives into the solution set is critical to problem solving and solution creation.

The operating models (how people get into roles, get rewarded for roles, get assigned to different parts of the organization, how they go after customers, etc.) within organizations will be required to shift with the changing business climate: Strategies by which organizations have operated in the past will have to change. This must be done with great care and forethought, for although each of the above proposals has its merits, and some are indeed realistic trends for the future, there is a strong possibility that some of these proposals can, if not managed carefully, damage the viability of the organization. For example, eliminating organizational bureaucracy, structure, and layers, while speeding up the decision-making process and moving the company forward, can have serious consequences if those at the top are not aware of the decisions made by those at lower levels in the company. Recently, the upper-level management of a large hospital franchise, which had quickly gained billions in revenue, found that 50 percent of its revenue had come at the expense of the government. When the government community came after the franchise, the chairman was caught unawares, because the management team that had created the financial model had not told him about the cost-saving strategy. In this case, eliminating bureaucracy, layers, and structure may prove to be quite detrimental to the company.

Negative methods for reducing costs are well known and include downsizing and/or restructuring without knowing the impact on the company's operations; reducing customer service, which can cause many customers to discontinue relations with the company; and cutting corners in production methods, which can cause repair and modification costs to go up.^[10]

For instance, as a result of the high financial cost of the talent wars of recent years, many organizations are faced with reducing recruiting and lowering the quality of the recruits hired. As a result, many companies are not able to keep up with services, orders, or a need for talent. This is negatively impacting companies' relationships with their customers and suppliers, as well as the global market.

An effective way to reduce costs is to keep workers up to date through training and development. Realizing that informed workers can make better decisions and are likely to make fewer blunders, many companies, including General Electric, Johnson & Johnson, and Hewlett-Packard, have established education and training programs for employees. Another effective way to reduce costs, customer dissatisfaction, and returns is to ensure that suppliers deliver high-quality products and services.^[11]

Some simple things to do to cut costs are

1. Travel awareness: Is the trip really necessary? What technology or communication medium can get the job done without requiring a physical meeting?
2. Procurement: Is the company getting the best rates on products and services? Can it strategically join a buying consortium? Can it use software to help manage costs?
3. Look beyond today's needs: Is a new piece of expensive equipment really a sensible purchase when the technology may be out of date in the next year or two?
4. Space: Is there a way to reuse or lease unused office space? Is it possible to electronically archive paper files and thus gain more space?

Another area in which companies might save costs and/or eliminate waste is in the use of paper products. According to a Worldwatch News Release,^[12]

Global paper use has grown more than six-fold since 1950.... Computers, fax machines, and high-speed printers and copiers make it possible to churn out vast quantities of paper. In the United States, the average office worker uses some 12,000 sheets of paper per year. Of the major grades of paper, printing and writing paper is both the most polluting and the fastest growing worldwide.... Bank of America, the largest bank in the country, reduced its paper consumption by 25 percent in just two years with online reports and forms, e-mail, double-sided copying, and lighter-weight papers. It also recycles 61 percent of its paper, saving about half a million dollars a year in waste hauling fees. Companies that use the Internet instead of paper for purchase orders, invoices, etc., can save $1 to $5 per page by eliminating paper and reducing labor costs and time.

Solutions to waste, such as the paper waste illustrated in the news release above, include e-books, which may replace print magazines, and our company does all it's job advertising on the Web.^[13] By utilizing the technological advances that make sense for the company, global leaders can eliminate waste, cut costs, and thereby maintain a competitive advantage.

Provide Great Products and Services

Competition is a part of every business, whether it is a sales business or not. Maintaining the advantage becomes a primary goal of any global leader.

Highly effective global leaders know that maintaining a competitive advantage is, to a great extent, dependent upon customer satisfaction.^[14] They look at the company in terms of how high customers and potential customers rank its products and services. A large hospital franchise makes every effort to satisfy its customers. However, customers are determined to be not only the patients of the hospital, but also the employees, administrators, and doctors who work at the hospital. The hospital gives monthly customer satisfaction surveys to determine what type of care its patients are receiving, if the doctors are happy with how their patients are being treated, and if the medical and administrative staff is satisfied with their positions. The management team at the hospital has found that by making every attempt to keep all "customers" satisfied, the patient experience has improved greatly. Understanding that it is the customer who determines the most important attributes of a product, service, or organization, the global leader works to maintain and expand these desired attributes.

Once aware of the attributes that are most valued by customers and potential customers—whether cost, customer service, quality, speed of service, or convenience—the global leader takes the necessary steps to ensure that the company and its people perform exceptionally well in these areas, thus achieving and maintaining competitive advantage. For instance, the leaders at a large technological services company had their performance management tied to people performance issues and to ensuring that their people were doing everything possible to support the company's competitive advantage. This link was key to the success of not only the workers in the company, but also of its leaders.

Achieving Long-Term Shareholder Value

Companies are expected to provide returns to their shareholders. One expectation is to have shorter-term profits, which require a different kind of management. There are pressures that come from outside as well as within the company, and it is necessary to find the right balance between those.^[15]

The model of success that is being perpetuated in the current economy ensures that many employees have the opportunity to be owner-operators in stock purchase plans. When using this model, care must be taken to balance the concept of owner-operators and stock purchase plans with rewarding companies, in their stock value, for retaining talent and intellectual capital. Because so many global leaders are being recognized with stock options, it is perpetuating the use of financial gain in the value of stock as a motivational factor for their work. As such, we may be heading towards an economy in which leaders are rewarded simply for the valuation of the company's stock and not for the retention of intellectual capital. This is a serious shortcoming.

In addition, the ready availability and mobility of intellectual capital via the World Wide Web can mean that the stock valuation of companies that are quick to jump on a fleeting advantage might be mislabeled or miscalculated based on the momentary competitive advantage. As a result, there would be companies that were overvalued based on intellectual capital and talent that couldn't be retained. In this context, there needs to be a balance of focus on economic security. In order to achieve such results for the shareholder, effective global leaders need a good grasp of finance and knowledge of their own company's long-term liability.^[16]

The global leader will not only have to effectively manage people and satisfy customers, but he or she must also have the ability to meet financial requirements and to achieve visible results for the shareholder.

Conclusion

The global leaders of the future will be required to have not only the professional knowledge to lead, but also the innovative and strategic mindset to maintain a competitive advantage in the industry. The pressure to continually deliver more, better, and faster results will require the global leader to rely on the intellectual capital within the organization and perhaps even outside of it. As the world rapidly changes and the marketplace becomes increasingly global, the competition within each industry becomes ever tougher. To keep costs down and profits up, the global leader is required to determine what is waste and what costs are unnecessary, and to provide the best possible product and/or service to the customer. The final goal in maintaining competitive advantage is to achieve results that lead to long-term shareholder value.

Resource Section: Maintaining a Competitive Advantage

ITEM 68: Communicates a Positive, Can-Do Sense of Urgency Toward Getting the Job Done

WHAT TO DO

• Take the initiative to do things beyond what is expected.
• Seek out future avenues. Go on site visits inside and outside your industry to compare practices that you can apply.
• At times when your group is required to make extra effort to get things done, encourage them to do so willingly.
• If you or your group consistently work long hours, keep track of the time and evaluate how each member manages his or her time on each project. You may find that you need to hire more staff, re-prioritize, delegate more, or convince your group to accept the number of extra hours.
• Ensure that each team member understands her or his role and responsibility.
• Stop making excuses. Convey and keep a positive attitude toward achieving results.
• Focus on the results achieved, not the number of hours worked.
• Go the extra mile.
• Create an environment in which people can work hard and have fun.

HOW TO DO IT

• Avoid and discourage destructive comments about working too hard or too long.
• If you or your group cannot work extra hours to complete a project, let your manager or colleagues know, explain the reason, express your concerns, and help find someone who can do it.
• Work with your group to look for productive, constructive ways to get things done, not excuses why it cannot be done.
• Communicate the long-term benefits that working hard will bring.
• Take the initiative to help your team or department get things done without being told or asked to do so.
• Encourage the full participation of team members by ensuring that they have received adequate training in relationship skills, group process, and decision making.
• Solicit input from your people on what you can do to make your organization a fun place to work.
• Actively participate in office social activities to get to know your people better.
• Look for additional challenges, and let people know that you expect them to have increased responsibility and personal growth.
• Ask your manager and coworkers for feedback on how you are doing in this area.
• Ask your superior to identify a person or a team who best demonstrates a can-do attitude, and observe them in action. Ask others who work with them to provide specific examples, and learn from them.
• Ask people for ideas about what you can do to make your organization a fun place to work and to increase their sense of ownership.

HOW TO USE THIS SKILL FURTHER

• Seek ways to further support others. Anticipate their needs and meet them.
• Ask someone you trust to let you know when you are making excuses, procrastinating, or displaying a negative attitude toward getting the job done.
• Implement various team-building activities that people enjoy to motivate your group.

RESULTS YOU CAN EXPECT

• You may earn a reputation of being positive, responsible, and easy to work with.
• Your manager may give you positive feedback about your ability to accomplish tasks on time.
• You may be assigned to more challenging and interesting projects.
• Your work group may be more enthusiastic and productive.

READINGS

• Get Better Or Get Beaten. Robert Slater & Jeffrey A. Krames. 2001. McGraw-Hill: New York, ISBN 71373462.
• Leading People: The 8 Proven Principles for Success in Business. Robert H. Rosen & Paul B. Brown. 1997. Penguin USA: New York, ISBN 140242724.
• Peak Performance: Aligning the Hearts and Minds of Your Employees. Jon R. Katzenbach. 2000. Harvard Business School Press: Boston, ISBN 0875849369.
• Playing For Keeps: How the World's Most Aggressive and Admired Companies Use Core Values to Manage, Energize, and Organize Their People, and Promote, Advance, and Achieve Their Corporate Missions. Frederick G. Harmon. 1996. John Wiley & Sons: New York, ISBN 047159847X.
• Practice What You Preach: What Managers Must Do to Create a High-Achievement Culture. David H. Maister. 2001. Free Press: ISBN 743211871.
• Seize Tomorrow, Start Today: Renew Your Vision, Revitalize Your Organization, and Stay Ahead of the Future. James A. Belasco & Jerre L. Stead. 2000. Warner Books: New York, ISBN 446676047.
• The Dance of Change: The Challenges to Sustaining Momentum in Learning Organizations. Peter M. Senge, Art Kleiner, Charlotte Roberts, George Roth, Rick Ross, & Bryan Smith. 1999. Doubleday: New York, ISBN 0385493223.
• The Intelligent Organization: Engaging the Talent & Initiative of Everyone in the Workplace. Gifford Pinchot & Elizabeth Pinchot. 1996. Berrett-Koehler: ISBN 1881052982.

ITEM 69: Holds People Accountable for Their Results

WHAT TO DO

• Make it clear to your employees that they are responsible for their actions.
• Emphasize the importance of delivering results.
• Resist taking responsibility for your people when they fail to deliver results.
• Give constructive and timely feedback to your employees.
• Don't fix the problems for others. Let them keep the "monkey" and find the solution.
• Encourage people to make realistic commitments.
• Ensure that people receive adequate training to do their work.
• Be a role model in taking responsibility for achieving results.

HOW TO DO IT

• Look at your group and ask yourself if you are spending more energy protecting them than holding them accountable.
• If you tend to be more protective, remind yourself that by holding people accountable, you are building their skills and helping them to rely less and less on you.
• Work with employees to determine the reasons why the results weren't produced. Point out the consequences, and ask them to find a solution to fix the problem.
• Ask people what they need in order to produce the results desired.
• Provide coaching and consulting to help your people understand their potential and limits before making a commitment.
• Show an active interest in your employees' progress, but avoid taking charge or getting in the way.
• Ask coworkers and your manager for feedback about how you hold others accountable for achieving results.
• Discuss techniques with managers who excel at this area.

HOW TO USE THIS SKILL FURTHER

• Consider ways of applying responsibility-building practices to the team with which you are now working.

RESULTS YOU CAN EXPECT

• Your group may require less monitoring.
• You may be more effective at delegating.

READINGS

• A New Vision for Human Resources: Defining the Human Resources Function by Its Results. Jac Fitz-Enz & Jack J. Phillips. 1999. Crisp Publications: Menlo Park, CA, ISBN 156052488X.
• Effective Phrases for Performance Appraisals: A Guide to Successful Evaluations. James E. Neal. 2000. Neal Publications: Perrysburg, OH, ISBN 1882423097.
• First, Break All the Rules: What the World's Greatest Managers Do Differently. Marcus Buckingham & Curt Coffman. 1999. Simon & Schuster, New York, ISBN 684852861.
• Freedom and Accountability at Work: Applying Philosophical Insight to the Real World. Peter Koestenbaum & Peter Block. 2001. Pfeiffer & Co: New York, ISBN 787955949.
• Make Success Measurable!: A Mindbook-Workbook for Setting Goals and Taking Action. Douglas K. Smith. 1999. John Wiley & Sons: New York, ISBN 471295590.
• Taking Charge of Change: 10 Principles for Managing People and Performance. Douglas K. Smith. 1997. Perseus Pr, Reading, MA, ISBN 201916045.
• The Boss's Survival Guide. Bob Rosner, Allan Halcrow, & Alan S. Levins. 2001. McGraw-Hill: New York, ISBN 71362738.
• The HR Scorecard: Linking People, Strategy, and Performance. Brian E. Becker, Mark A. Huselid, & Dave Ulrich. 2001. Harvard Business School Press: Boston, ISBN 1578511364.
• Tomorrow's HR Management: 48 Thought Leaders Call for Change. David Ulrich, Michael R. Losey, & Gerry Lake. 1997. John Wiley & Sons: New York, ISBN 0471197149.

ITEM 70: Successfully Eliminates Waste and Unneeded Cost

WHAT TO DO

• Manage the business as if it were your own.
• Realize that a business process that worked well at one time under certain circumstances may no longer be effective or efficient.
• Involve your employees in the process of simplifying business processes and cost reduction.
• Look for new technology that can simplify business processes and increase your department's efficiency.
• Identify the costs and procedures that you currently use to accomplish key tasks in your organization.
• Eliminate unneeded cost without losing production capacity or sacrifice quality.
• Find ways to reduce the duplication of effort in your organization.
• Monitor resources to avoid wasting time or duplicating efforts.
• Create structures to monitor expenses for the duration of each project.
• Use a resource only if it will produce the most cost-effective results.
• Get others you trust to challenge your financial ideas to test their soundness.

HOW TO DO IT

• Talk with other managers about how they develop and implement a strategic plan to maximize productivity and how they identify and eliminate unnecessary expenses.
• Communicate the long-term corporate goals and short-term objectives to your work group. Take the time to invite ideas and input from your employees for maximizing productivity and profit.
• Give recognition and rewards for people with useable suggestions.
• List each step that must occur from the time a task enters your department until it leaves your department. Eliminate unnecessary steps that will detain you from effectively maximizing productivity.
• Explain to your employees how costs and profits are projected and what happens when projections do not match actual goals.
• Train others to spot unnecessary expenses.
• Set coordinated goals and procedures to unite the various business units.
• Look at successful cost-saving programs in other industries or companies.
• Try out new cost prevention or reduction ideas for a test period to allow a complete and fair test without as much liability.
• Conduct brainstorming sessions on cost-saving with coworkers, management, and customers.
• Ask employees and customers for their ideas on cost prevention, eliminating waste, and cost cutting.
• Challenge your work group to identify tasks or procedures that are outdated, overly time-consuming, or difficult to complete.
• Determine whether the processes are necessary and if any can be combined with another step to save time and money.
• Study the business processes and budgets of other departments in your organization to see how their work processes are set up, what works well, what doesn't, and why.

HOW TO USE THIS SKILL FURTHER

• Talk to managers who have effectively streamlined business processes and eliminated waste, and learn their methods and approaches.
• Volunteer to work on a committee or task force whose assignment is to examine and improve your organization's work process and productivity.
• Take on projects with bigger budgets and payoffs.
• Use a budget in your home.
• Handle finance or productivity for a volunteer, social, or recreational group outside of work; ask for feedback on how you are doing.

RESULTS YOU CAN EXPECT

• Morale may improve as others feel they have a stake in deciding how to improve processes.
• Others may ask your advice on improving productivity and eliminating unnecessary expenses.
• You may receive recognition for achieving results or exceeding expectations on time and within budget.

READINGS

• Essential Drucker: In One Volume the Best of Sixty Years of Peter Drucker's Essential Writings on Management. Peter Ferdinand Drucker. 2001. HarperBusiness: New York, ISBN 66210879.
• First, Break All the Rules: What the World's Greatest Managers Do Differently. Marcus Buckingham & Curt Coffman. 1999. Simon & Schuster: New York, ISBN 684852861.
• Gemba Kaizen: A Commonsense, Low-Cost Approach to Management. Masaaki Imai. 1997. McGraw-Hill: New York, ISBN 0070314462.
• Jack: Straight from the Gut. Jack Welch. 2001. Warner Books: New York, ISBN 0446528382.
• Lean Thinking. James P. Womack & Daniel T. Jones. 1996. Simon & Schuster: New York, ISBN 0684810352.
• Lean Transformation: How to Change Your Business into a Lean Enterprise. Bruce A. Henderson, Jorge L. Larco, & Stephen H. Martin. 1999. Oaklea Press: Richmond, VA, ISBN 0964660121.
• Robust Engineering: Learn How to Boost Quality While Reducing Costs & Time to Market. Genichi Taguchi, Subir Chowdhury, & Shin Taguchi. 1999. McGraw-Hill: New York, ISBN 71347828.

ITEM 71: Provides Products and Services That Help Our Company Have a Clear Competitive Advantage

WHAT TO DO

• Instill a commitment to quality and excellence in your organization.
• Understand the budgeting process so that you can contribute ideas for maximizing productivity and profitability.
• Develop a strategic plan that creates increasing economic value for the key stakeholders, and determine how best to use the company's resources.
• Establish high performance standards and promote product and service excellence.
• Define your success as "meeting or exceeding customer requirements."
• Communicate payoffs for your company and your own group that come with improving products and services.
• Ask customers what they want with respect to products and services, then stop and listen.
• Keep your efforts focused on improving the delivery and quality of products and services.
• Strive to meet customer deadlines within costs as promised.
• Define clear expectations for quality of products, services, and processes for your department.

HOW TO DO IT

• Ensure that measurements are in place to assess the quality and cost (as defined by your customer) of the product or service you provide.
• Write and publicize your performance standard for quality as "meeting customer needs, including cost and schedule."
• Analyze your work processes and determine how to apply quality management principles to improve your overall products and services.
• Prepare detailed plans with resources required to achieve quality in products and services at a competitive price.
• At least once a day, check your efforts against the standard, and identify any gaps. Work to bring your efforts into closer alignment with your standard.
• Check with your work group to make sure they are clear about customer and supplier requirements. Get their input on achieving goals, cutting costs, and improving quality.
• When asking customers what they want or what their needs are, also ask if they foresee any problems—listen carefully and make notes for reference.
• To guard against relying on preconceived ideas of what the customer needs, make sure to check for understanding with the customer at the outset and regularly thereafter. Listen carefully, document what is said, and get the customer's agreement.
• When holding follow-up meetings with customers, include key employees who worked on meeting their needs, and ask "What went right?" and "What can we do to meet your needs better?"

HOW TO USE THIS SKILL FURTHER

• Ask managers who are good at this to explain their methods.
• Learn from managers who continuously produce high-quality services and products within budget.
• Read books about effective quality management.

RESULTS YOU CAN EXPECT

• You may be recognized as a model of someone who continuously pursues excellence.
• Your customers may often be satisfied with the way you meet their needs.
• Customers may request your services or that you be assigned to assist them.

READINGS

• Competitive Advantage: Creating and Sustaining Superior Performance. Michael E. Porter. 1998. Free Press: London, ISBN 0684841460.
• General Electric's Six Sigma Revolution: How General Electric and Others Turned Process Into Profits. George Eckes. 2000. John Wiley & Sons: New York, ISBN 047138822X.
• Getting Results: Five Absolutes for High Performance. Clinton O. Longenecker & Jack L. Simonetti. 2001. John Wiley & Sons: New York, ISBN 0787953881.
• Making Quality Work: A Leadership Guide for the Results-Driven Manager. George Labovitz, Yu Sang Chang, & Victor Rosansky. 1995. John Wiley & Sons: New York, ISBN 047113211X.
• The New Market Leaders: Who's Winning and How in the Battle for Customers. Fred Wiersema. 2001. Free Press: London, ISBN 0743204654.
• The Power of Six Sigma: An Inspiring Tale of How Six Sigma Is Transforming the Way We Work. Subir Chowdhury. 2001. Dearborn Trade: Chicago, ISBN 793144345.
• The Quest for Global Dominance: Transforming Global Presence into Global Competitive Advantage. Vijay Govindarajan, Anil K. Gupta, & C. K. Prahalad. 2001. Jossey-Bass: San Francisco, ISBN 0787957216.

ITEM 72: Achieves Results That Lead to Long-Term Shareholder Value

WHAT TO DO

• Determine how best to use the company's resources within its competitive environment.
• Actively look for and introduce new ideas.
• Strive to eliminate or minimize unnecessary bureaucracy and politics.
• Develop a strategic plan that creates increasing economic value for the company's shareholders and employees yet also meets the needs of your customers.
• Study your company's long-range plan and consider its implications for your department.
• Identify and convey the long-term corporate goals to employees.
• Involve your employees in the budgeting process so that they can contribute ideas for improving profitability and understand the financial impact of decisions.
• Be sensitive to verbal and nonverbal communication that promotes the "selfish" intentions rather than the company's needs first.

HOW TO DO IT

• Analyze capital markets, related industries, and competition to help you understand the company's long-term vision.
• Examine existing procedures and policies, then streamline them. Focus on efforts that will yield maximum results.
• Review goals and priorities by linking task objectives to the overall organizational goals.
• Identify interrelationships between divisions, departments, and the company as a whole.
• Set coordinated goals and policies to unite the business units.
• Identify and communicate to employees the desired results that lead to long-term shareholder values.
• Conduct quarterly meetings with your employees to communicate organizational goals. Explain how your department's goals support shareholder value. Respond to questions and check for understanding.
• Obtain your staff's input on ways to effectively increase shareholder value.
• Lead by example; be sure your own behavior reflects a commitment to your company's long-term interests.
• Discuss techniques with managers who excel at balancing meeting the need to achieve results with meeting the needs of shareholders.
• Ask your managers to give you feedback on how you are doing in this area.

HOW TO USE THIS SKILL FURTHER

• Make lists that compare short-term results to long-term benefits so that employees can see the differences.
• Volunteer to write strategic plans for major projects within the organization.

RESULTS YOU CAN EXPECT

• You may recognize much greater gains in all aspects of the business.
• Company strategies and goals for the future may be clear from all levels of management.

READINGS

• Creating Shareholder Value: A Guide for Managers and Investors. Alfred Rappaport. 1997. Free Press: London, ISBN 0684844109.
• Developing Business Strategies. David A. Aaker. 1995. John Wiley & Sons: New York, ISBN 0471118141.
• Don't Park Your Brain Outside: A Practical Guide to Improving Shareholder Value With Smart Management. Francis T. Hartman. 2000. Project Management Institute Publications: Newtown Square, PA, ISBN 1880410486.
• Playing For Keeps: How the World's Most Aggressive and Admired Companies Use Core Values to Manage, Energize, and Organize Their People, and Promote, Advance, and Achieve Their Corporate Missions. Frederick G. Harmon. 1996. John Wiley & Sons: ISBN 047159847X.
• The Value Imperative: Managing for Superior Shareholder Returns. James M. McTaggart, Peter W. Kontes, & Michael Mankins. 1994. Free Press: London, ISBN 0029206707.
• Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value. Peter Doyle. 2000. John Wiley & Sons: ISBN 471877271.

Endnotes

1. Pharmaceuticals, United States, 41.

2. Products and services, United States, 36.

3. W. Tanaka. "Software Is a Dandy If It Helps Move the Candy." The Philadelphia Inquirer, November 1, 2002.

4. Investments, United States, 48.

5. Products and services, United States, 33.

6. Healthcare, Taiwan, 41.

7. Healthcare Indonesia/Malaysia, 46.

8. Products and services, United States, 35.

9. Products and services, United States, 35.

10. Ron Kurtus, www.school-for-champions.com.

11. Ibid.

12. Worldwatch Institute. Cutting the Costs of Paper: Saving Forests, Water, Energy and Money. Janet N. Abramovitz & Ashley T. Mattoon. December 11, 1999. Copyright © 2002, www.worldwatch.org.

13. Telecommunications, United States, 36

14. Please see Chapter 15, "Ensuring Customer Satisfaction," for more information on this subject.

15. Investments, United States, 36.

16. Healthcare, Philippines, 36.

17. Information from interview with Jim Klingensmith conducted by Cathy Greenberg, December 2001.

18. Sun Microsystems Success Story. ©2001. http://www.sun.com/servers/success-stories/highmark.html.

19. Ibid.