This document summarizes the study and recommendations related to tactical and strategic leadership within continuous improvement and operational excellence functions to drive change and lead the sustainable organizational transformation efforts. Study was performed between 2011 and 2013.

1. Robert Kowalik
This document summarizes the study and recommendations related to tactical and strategic leadership
within continuous improvement and operational excellence functions to drive change and lead the
sustainable organizational transformation efforts. Study was performed between 2011 and 2013.

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Operational
Excellence
Leadership
Robert Kowalik
Background
“If you don’t improve and continue to stay still, you get behind, as
others are moving”. Change and continuous improvement are
therefore the most critical elements in the organizations today, to
assure long term sustainable success. Organizations that are able to
continuously re-invent themselves, innovate and adopt to the new
business environment and customer behaviors are well positioned to
win in the market place long term.
That unique ability to continuously change must be a part of the
organization’s culture and therefore must be driven by leaders every
minute of every day until it becomes a habit and a set of deeply
embedded values.
Challenges:
“What should be the
roles, responsibilities
and the daily routines of
the true operational
excellence leaders to
build a long term
continuous
improvement culture
and sustain the high
change dynamics in the
organization?”
“Where do most leaders
really spend their time
and what stops them
from leading?”

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Culture & Leadership
There are many existing definitions of Culture, but in principle, culture is a set of basic
assumptions and beliefs about the reality. Culture influences the way we make decisions, feel,
think and act. It determines our choices and decisions we take each day. Ultimately culture is the
only competitive advantage that corporations have. Everything else can be copied or bought out.
The good news is that you can design your own culture, but building it takes time. It’s a
marathon, not a sprint.
The engine that drives culture is Leadership. You can’t copy and paste culture from another
organization. You can’t just write it down in the mission statement. It has to be driven every day
throughout the entire organization by leaders at every level, starting from the top.
Leaders set direction, communicate and sell vision, inspire, motivate, energize, walk the talk,
challenge the wrong and reward the right behaviors, question existing practices, empower
teams and develop people. They influence individuals’ day to day behaviors and believes.
As Jeffrey K. Likker stated in “The Toyota Way - Fieldbook” book: “It is clear that the difference
between success and failure starts with leadership. This starts at the top, but ultimately the
process is carried by those in the middle supporting the value-adding employees”.
So why are many organizations so slow to change?

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Challenge 1
The first questions that I asked to many operational leaders was: “What should be the roles,
responsibilities and the daily routines of the true operational excellence leaders to build a long
term continuous improvement culture and sustain the high change dynamics in the
organization?”
Answers are summarized below:
 I should lead with vision, not with tasks. My vision should inspire, it should set direction.
 Leaders should focus on the ”why”, not the “what” and the “how”
 I should model the way for my organization, be the role model through my own
behaviors, lead by example, walk the talk
 Reward the right behaviors and challenge / correct the wrong ones, know your team
and people, be there for your people, be accessible and trustworthy, get involved, get
your hands dirty, hands on approach, grow and develop your people
 Need to be externally focused, listen to the market and customers, so I can adjust my
organization quickly, can’t get complacent and happy with the current state
 Clarify roles, responsibilities and expectations, drive accountability & ownership
throughout all employees based on agreed strategic goals and priorities, all levels across
entire business
 Make sure everyone understands their role in the strategy, the future and during the
journey to get there, as a leader I need to have a plan and make sure everyone knows it
 Demonstrate passion, high energy & desire to be the best, energize others through
clear, consistent and candid communication, reinforce important strategic goals and
direction regularly to all employees
 Set the crisp and vivid picture of the vision and the desired future stage, be excited
about the future of the business and the prospects, translate vision into every day work
 Continuously increase expectations and performance level, challenge status quo,
demand only the absolute best from everyone, have high expectations and clarify them
 Benchmark external organizations and other industries, looking for best in class, never
settle for good enough, think how to change the industry and set new standards, don’t
be the follower but rather the #1
 Reward achievements and celebrate milestones and success, acknowledge contributions
… and ask for more, encourage improvements, “what else can be done better?”
 Promote curiosity, innovation, courage and risk taking, don’t punish for failure where
risk taking was involved, especially when driven by right intentions
 Routinely follow-up on execution, have clear performance metrics, be fact based, if
something doesn’t work have a courage to change it
In principle, everyone knew very well what the true change leaders should do and how they
should behave. Above answers actually become a good guide and a “soft skill job description”
for any leader in any function.

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Challenge 2
The second question was: “Where do you really spend your time and what stops you to behave
like you should every day?”
The answers were:
 I spent most of my time putting down the daily fires, “firefighting” is what takes most of
my time each day
 Urgent e-mails and phone calls to respond to, before I get my first coffee, my inbox and
phone message box are full of “want it now” requests
 Reports and many daily administrative tasks I need to accomplish before I leave
 Too many meetings to attend and actions items from every meeting, overwhelming
 Overwhelmed by the amount of work required to accomplish the strategic goals, afraid
to start, don’t know where to start, don’t have a plan
 Unclear organizational structures, roles and responsibilities, I really don’t know what is
expected of me vs. my other colleagues, we work in silos, unclear objectives, not sure
what is expected of me in this role
 Even if I find time for strategic work, I need help from others and they have no time
 No time to focus on peoples’ soft skills, correct their behaviors and coach them, I have
job to complete every day and that alone takes most of my time
 Complex communication, I waste so much time to make sure everyone has the right
information and knows what to do every day
 I’m drained with the “day to day” and honestly have no energy left, can’t never get to
the long term strategic projects and activities
 I need to ship the volume and make my weekly / monthly targets, that alone takes most
if not all of my time
By asking more specific questions, exploring even further and grouping the answers into
categories of strategic vs. tactical, I could conclude that operational leaders spend approximately
90% of their time on urgent tactical issues that “come at them” every day. That leaves them very
little or no time to focus on building the true culture and to lead strategically. This is why so
many organizations are slow to change and achieve long term strategic objectives. They spend
most of their time to respond to the urgent matters vs. influence the future and minimize
surprises. It’s a never ending cycle that drains energy, creativity and passion.

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Recommendations
In order to break the cycle of constant tactical “firefighting”, the strategic work needs to become
part of the daily activities and it needs to be embedded into the entire organizational structure,
starting with leaders, down to all employees. It’s up to the individual leaders to choose to break
that cycle and to better balance strategic and tactical activities every day. Ability to do that
separates long term success and satisfaction from failure and constant pressure.
I looked at a few examples of leaders that were truly driving change and were successful at
building continuous improvement culture within their businesses. There were many
commonalities between them and few unique techniques and best practices that are worth
highlighting.
 Strategic plan set every 2-3 years during the off site leadership team meeting,
maintained quarterly for validity, very clear list of business strategic priorities, agreed
and “signed-off” by entire management team with clear owners, accountabilities,
performance metrics and a regular follow-up structure (at least monthly)
 Annual or quarterly Kaizen plan with regular events addressing the strategic
imperatives, disciplined execution of Kaizen events with regular follow-ups and many
employees involved
 Simple and effective mechanism to engage employees and create platform for them to
share ideas and solve daily problems
 All employees empowered to contribute and rewarded for bringing problems to the
surface (vs. hiding them out of fear)
 Strategic functions embedded within tactical organization, at least one person in every
major functions not directly tied to the “day to day” priorities looking at improvements,
tracking performance, metrics, facilitating group communication and continuous
improvement activities
 At least 50% of the incentive bonus plan linked to the results and performance metrics
of the individual projects supporting strategic initiatives vs. companywide annual results
and financial metrics only
 Regular (monthly) all employee meetings focused both on strategy and on current
performance & tactical results, both strategic & tactical expectations communicated to
all employees regularly
 Lunch with the president or GM – 5-10 randomly selected employees from various
functions meet their leader (s) to discuss the daily challenges and to hear about the
business direction and strategic priorities, it provides a two way open communication in
an informal setting (e.g. leader asks: “What one thing you would change it you were in
my position?”)
 Every manager schedules 3 hours / day or 2 days per week on continuous improvement
activities and cultural aspects of the business (forces to break the firefighting mode)
 Monthly newsletter sent to all employees highlighting achievements against long term
goals to increase awareness, motivation and change dynamics

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References
Senior Execs: What Does It Take to Lead Strategically?
Center for Creative Leadership, Leading Strategically Program, August 2013, www.ccl.org
A strategic challenge is a leadership challenge — and one that top-level managers and executives
can't ignore.
"Studies suggest that the ability to lead strategically is essential for success in senior roles, and in
a way that is different from other management levels," says CCL's Stephanie Trovas. "And it
certainly holds true for the executives and managers we work with who are leading a function,
division or organization."
Consider two findings from Management Research Group (MRG). In one study, 94 percent of
senior executives indicated strategic leadership was the most critical behavior for their
organization's success. A second study found that effective senior executives scored an average
of 15 percentage points higher in "strategic thinking" than effective managers.
So what does it take to be an effective strategic leader? How do vice presidents and directors
and CEOs learn strategic leadership skills? In CCL's Leading Strategically program, we break it
down into 11 skills in five key areas that participants learn, practice and apply to their personal
strategic leadership challenge.
Strategic Learning. Senior leaders must have a firm grasp of the business. This is the "nuts and
bolts" of strategy that are commonly taught and talked about. Specifically, leaders must:
 Have a business perspective: Understand the perspectives of different functional areas
in the organization and the external conditions that affect the organization.
 Be strategic planners: Develop long-term objectives and strategies; translate vision into
realistic business strategies.
 Master organizational decision-making: Make timely decisions; readily understand
complex issues; develop solutions that effectively address problems.
Leverage Polarities. Senior leaders constantly wrestle with the strategic and practical
implications of priorities that appear to be in conflict. They debate the merits of global vs.
regional, rewarding the team vs. rewarding individuals, centralized vs. decentralized. To be
successful in today's environment, leaders must leverage the value of each, rather than viewing
them as "either/or." This requires the ability to:

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 Manage conflicting perspectives: Recognize that every decision has conflicting interests
and constituencies; balance short-term pay-offs with long-term improvement.
 Act systemically: Understand the political nature of the organization and work within it;
establish relationships and alliances throughout the organization.
Spanning Boundaries. Leaders of functions and divisions have the essential role of creating
Direction, Alignment and Commitment (DAC) across boundaries. They must learn to work across
vertical, horizontal, stakeholder, demographic and geographic boundaries — and support other
groups and managers to do the same. Boundary spanning requires leaders who are able to:
 Influence across the organization: Inspire; promote a vision; persuade and motivate
others; influence superiors; delegate effectively.
 Build collaborative relationships: Build productive working relationships with coworkers
and external parties.
Leading Change. Senior leaders are responsible for managing change, but also for understanding
and leading their organization through the cognitive and emotional dimensions of change. They
need to:
 Promote organizational transition: Support strategies that facilitate organizational
change initiatives and position the business for the future.
 Adapt to new conditions: Show agility within changing business conditions and
openness to new ideas and new methods.
Shaping Culture. Organizational culture affects strategy. Senior leaders must work within current
culture and, at the same time, influence culture change for greater performance potential.
Leaders will need to:
 Initiate organizational innovation: Seize new opportunities and consistently generate
new ideas; introduce and create needed change even in the face of opposition.
 Demonstrate vision: Understand, communicate and stay focused on the organization's
vision.

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Sorting Out Strategic Leadership
Kabacoff, R. (2009). Sorting Out Strategic Leadership: What exactly is strategic thinking – and how can managers do it better?. Wall Street
Journal, 9/16/09.
What exactly is strategic thinking—and how can managers do it better?
In study after study, strategic thinkers are found to be the most highly effective leaders. And
while there is an abundance of courses, books, articles and opinions on the process of strategic
planning, the focus is typically on an isolated process that might happen once per year.
In contrast, a strategic leader thinks and acts strategically every day. So what makes a leader
strategic, and is there any way to teach strategic thinking? For starters, strategic leaders take a
broad, long-range approach to problem-solving and decision-making through objective analysis,
thinking ahead, and planning.
That means being able to think in multiple time frames, identifying what they are trying to
accomplish over time and what has to happen now, in six months, in a year, in three years, to
get there. It also means thinking systemically. That is, identifying the impact of their decisions on
various segments of the organization—including internal departments, personnel, suppliers and
customers.
The ability to maintain a focus on long range objectives, the process of how to achieve them
over time, and an understanding of the implications of decisions for all involved, is the hallmark
of a strategic leader.
So, just how important is a strategic approach for the individual manager or executive? In 2009,
Management Research Group (MRG) completed a large scale global study addressing this
question. We evaluated the leadership practices and effectiveness of 40,000 managers and
executives in 144 countries and 27 industries.
Each participant was assessed with the Leadership Effectiveness Analysis (LEA), a 360-degree
assessment tool measuring 22 leadership practices, including such practices as innovation,
persuasion, communication, and results orientation, and more than 20 measures of
effectiveness, such as future potential, credibility, business aptitude, and people skills.
We found that a strategic approach to leadership was between two and 46 times more
important to the perception of effectiveness than any of the other behaviors studied. In fact,
leaders that were high on "strategic" (those who focused long range and who had a process to
achieve those objectives) were five times more likely to be seen as effective as the leaders that
were low on strategic, independent of any of their other behaviors. We also found that effective
senior executives scored an average of 15 percentage points higher in this area, than effective

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managers. This suggests that a strong strategic orientation is an important factor in the
successful transition from mid-level to senior positions.
Later, in a follow-up study, we investigated leadership profiles produced by 7,000 senior
executives charged with setting the leadership development goals for their respective
organizations. When asked to select the leadership behaviors most critical to their organizations'
future success, executives chose strategic 94% of the time. This might be why so many managers
and executives focus time and energy on improving their strategic skills.
It might sound abstract, but you can develop your own strategic approach with practice and
effort. First, make strategic planning sessions a regular part of your week—even if you're not
actually charged with planning anything at the moment. During these planning sessions, stay
focused on a few important questions:
 Objectives. What you are trying to accomplish? What is your ultimate goal?
 Plans. What do you need to do to get from where you are to where you want to be
(interim goals, time frames, resources needed, accountability identified)?
 Implications. How will your actions affect other people and areas?
 Anticipate the future. What challenges or opportunities may come up? What will the
client want? What will your competitors be doing?
 Review all parts of your operation against strategic positioning. Do you have the
people/resources/training to accomplish next year's goals? How can you get them?
 Analysis. Analyze the pros and cons of any potential course of action against the
ultimate goals.
The key is to continuously articulate and refine your vision for your unit, project, or initiative.
And communicate this vision to others. This effort takes practice and continuity. For some, it
might not come naturally at first but the result of refining this skill often makes the difference
between an average and an exceptional leader.
Organizations and companies can also help develop strategic thinkers and leaders. To be sure,
it's not an easy task. Strategic thinking is a difficult leadership skill to acquire because it is as
much a mindset as a set of techniques. What's more, in the workplace tactical responses to
immediate demands are often rewarded over long term vision and planning. That said, it's not
impossible to instill strategic thinking skills in managers. Here are some ways you can foster
strategic thinking as part of your management approach:
 Encourage managers to set a regular time aside for strategic planning (alone and in
meeting with others). A strategic approach takes time. Make it a regular part of their
job.
 Connect managers with a mentor. One of the most effective ways to develop your
strategic skills is to be mentored by someone who is highly strategic. The ideal mentor is

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someone who is widely known for an ability to keep people focused on strategic
objectives and for an ability to accurately determine the impact of their actions and
decisions.
 Communicate a well-articulated philosophy, mission and goal statement throughout the
organization. Individuals and groups need to understand the broader organizational
strategy, in order to stay focused and incorporate it into their own plans and strategies.
 Reward people for evidence of thinking, not just reacting; wherever possible,
organizational culture should encourage anticipating opportunities and avoiding
problems, and discourage crisis management. For example, managers should be
rewarded for being able to quickly generate several solutions to a given problem and for
identifying the solution with the greatest long term benefit for the organization
 Promote a future perspective for employees by incorporating it into training and
development programs; teach people what strategic thinking is and encourage them to
ask "why" and "when" questions. For example, when a manager suggests a course of
action, his boss can ask two questions: "What underlying strategic goal does this action
serve?", and "What will the impact be on internal and external stakeholders?"
Consistently asking these two questions will go a long way towards developing strategic
leaders.
 Keep people informed. Effective strategy requires information shared across
boundaries; cross-functional teams can work on strategic organizational issues, and the
results of their thinking and efforts should be published and shared throughout the
organization.
 Encourage employees to hold regularly scheduled meetings to assess plans, coordinate
efforts, and share information that should be incorporated into strategies.

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Books
Below books are highly recommended to guide individuals facing leadership challenges and have
difficulties to balance tactical and strategic work.