Leadership Matters Most
The ease or difficulty in transforming a management system lies with the leaders of that system. I’ve worked with five Baldrige Award winners and in every case, their executives drove the renovation of their management systems. No company did it the same way: Some had it mastered in a few years while others took a decade or more. Not every senior leader felt strongly about the Baldrige model or the evaluation and improvement process it supports, but as long as the top executive did, it didn’t matter.
Executive attitudes toward creating a sound management system regularly surprise me. Those who recognize its value preach this systems perspective with the fervor of true believers. Those who don’t buy into it bide their time until the boss leaves and they can return to what they know is best. The trouble is, what they know is best is rarely as good as the systems approach they abandon.
Motorola, IBM, and AT&T dominated in the late 1980s and early 1990s when their leaders conducted regular, formal assessments of their management systems. As that process waned, so did their fortunes. AT&T formed its Universal Card Services division in 1990 with a management system based on the Baldrige model. In its first 30 months of existence it rocketed to second largest in the U.S. credit card industry, winning the Baldrige Award in 1992.
Thirty months after that it floundered, hobbled by new leadership that deserted the systems approach in favor of “better ideas.” Thirty months after that, in October 1997, AT&T sold the sputtering unit to Citigroup, by which time it had dropped to eighth in the industry.
The tragedy of such stories is not that new leaders bring new agendas. As the ones ultimately accountable for their companies’ success, they must do what they believe will bring that success. The tragedy is that they do not understand that their agendas are more likely to succeed within a sound management system.
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