Leadership > commentary
An organisation's senior leaders need to set directions and create a customer orientation, clear and visible values, and high expectations. The directions, values, and expectations need to address all stakeholders. The leaders need to ensure the creation of strategies, systems, and methods for achieving excellence, stimulating innovation, and building knowledge and capabilities. The strategies and values should help guide all activities and decisions of the organisation. The senior leaders need to commit to the development of the entire work force and should encourage participation, learning, innovation, and creativity by all employees.

Through their ethical behavior and personal roles in planning, communications, review of organisational performance, and employee recognition, the senior leaders serve as role models, reinforcing values and expectations and building leadership and initiative throughout the organisation.
Source - Category 1 core values, concepts and framework
"Here's all that's certain about the future: it holds profound and unpredictable change. But as smart CEOs have already learned, that's all you need to know to prepare your company
Peter Drucker (1999)
Overcoming resistance to change was, until quite recently, one of the most popular topics of management books and seminars. No longer, according to Peter Drucker in his 1999 book Management Challenges for the 21st Century. "Everybody has accepted by now that change is unavoidable … in a period of upheaval, such as the one we are living in, change is the norm,’ he writes.

"To be sure, it is painful and risky, and above all, it requires a great deal of very hard work. But unless an organization sees that its task is to lead change, that organization - whether a business, a university, or a hospital - will not survive.

"In a period of rapid structural change the only organizations that survive are the change leaders… a central 21st-century challenge [is to] … become a change leader."

Drucker’s prescription - for leaders who seek to move their organizations into a future where innovation and continuous change are the organising principles du jour - may be summarised as:
Abandon yesterday
Free up resources that that no longer contribute to performance or produce results, says Drucker. Hanging onto the past is difficult and time-consuming.

"Doing things differently … demands leadership by people of high and proven ability. And if those people are committed to maintaining yesterday, they are simply not available to create tomorrow."
Improve systematically
Whatever your enterprise does, it needs to be improved systematically and continually: the product or service, the production processes, marketing, technology, the training and development of people, and the use of information.

"Continuous improvements in any area eventually transform the operation. They lead to product innovation. They lead to service innovation. They lead to new processes. They lead to new businesses. Eventually continuous improvements lead to fundamental change."
Exploit success
For example, Drucker says it’s only 70 or 80 years since monthly reporting was first used in company management. The front page - traditionally focusing on problems - should be changed to focus on good results and opportunities.

"As much time should be spent on that new first page as traditionally was spent on the problem page. As is the case with continuous improvement, exploitation of success will, sooner or later, lead to genuine innovation. There comes a point when the small steps of exploitation result in a major fundamental change - that is, in something genuinely new and different."
Innovate systematically
To lead change, enterprises have to seek systematic innovation. Not because change leaders need to innovate (they do), but because systematic innovation produces the mind-set needed to make the entire organization see change as an opportunity.
Avoid innovation traps
Change leaders will be tempted by three innovation traps, so attractive they can expect to fall into one - or all three - again and again.
  1. Avoid opportunities not in tune with strategic realities: the collapsing birthrate; shifts in how disposable income is spent; new definitions of performance; global competitiveness; and the growing incongruence between economic globalization and political splintering
  2. Don’t confuse novelty with innovation. The test of an innovation is that it creates value. A novelty creates amusement only. The test for innovation — and, by the way, for quality — is not do we like it? It’s do customers want it and will they pay for it?
  3. Confusing motion with action. Typically when a product, service, or process bombs, management reorganizes. Sure, often it’s needed. But it should come after the action — after what must be abandoned has been faced up to. By itself, reorganization is just motion and no substitute for action.
Budget for change
"In most enterprises there is only one budget. In good times increases occur across the board. In bad times expenditures are cut across the board. And the future misses out."

Drucker believes that change leaders need two budgets:
  1. an operating budget, showing the expenditures needed to maintain the present business. That is normally 80% to 90% or so of all expenditures.
  2. and the change leader should have a separate budget for the future. That budget should remain stable throughout good times and bad times.
Balance, change, and continuity
"Organizations that are change leaders are designed for change. But people need continuity. They need to know where they stand. They need to know the people they work with. They need to know the values and the rules of the organization. They do not function well if the environment is not predictable, not understandable, not known. Continuity is equally needed outside the enterprise. To be able to change rapidly, one needs close, long-standing relationships with suppliers and distributors."

"The more an institution is organized to be a change leader, the more it will need to balance rapid change and continuity. That balance will be one of the major concerns of tomorrow's management. One thing is certain: we face years of profound changes. It is futile to try to ignore the changes and to pretend that tomorrow will be like yesterday, only more so. But to try to anticipate the changes is equally unlikely to be successful. The changes are not predictable. The only policy likely to succeed - although it, too, is highly risky - is to try to make the future."
Peter Drucker is the Marie Rankin Clarke Professor of Social Science and Management at Claremont Graduate University, in Claremont, Calif.
Quotes are from his 31st book, Management Challenges for the 21st Century

General Motors lags Chrysler

And just for fun, here’s an alternative view …
"I just don't believe leadership is viable these days. In any project, there are so many hands who are removed from the original vision that nothing works out as planned or hoped for. It may also be one of the fallouts of empowerment: everyone wants a say, so no one is in charge."

"Strides have been made in management - we understand quality management and reengineering - but when it comes to leadership we’re still kindergarteners."
Harriet Rubin, Inc., March 1999
Quoted by Rubin "From Fortune’s archive online."