Business health in focus

The Advantage: Why Organizational Health Trumps Everything Else In Business, by Patrick M Lencioni

Patrick M Lencioni, the author of The Advantage, reports that his father often came home from work "frustrated, complaining about how his company was being was being mismanaged". I have heard exactly the same sentiment from so many committed, competent employees.

Lencioni's book intends to give another view on this common problem. It is a very practical guide to a compelling solution.

The model Lencioni presents is not based on formal research, but on his 20 years of observation as a management consultant. All the conclusions he came to are common to a wide variety of organisations, from businesses to schools and charities.

Generally, the solution to business problems is identified as strategic, marketing, finance or technological issues, and as such feels manageable. These problems require the attention and focused effort of a top team or the services of a competent specialist, which will solve them. This gives comfort.

Business has traditionally focused on the measurable, objective, and data-driven aspects of organisational intelligence. Business does not traditionally attend to the “messier, more unpredictable world of organizational health”, Lencioni explains.

“Organisational intelligence” is understood by Lencioni as the essential expertise and knowledge to be successful. It is the minimum standard, it is the “permission to play” and today we have this in abundance.

What we lack is “Organisational Health,” and this prevents companies from achieving, at best, and from surviving, at worst. This book asserts that organisations cannot become healthier by virtue of their intelligence alone. If it is true, and I do believe it is, the organisation’s health should be an area of intense concern for business leaders.

“If you had to bet on the future of one of two kids, one raised by loving parents in a solid home and the other a product of apathy and dysfunction, you’d always take the former regardless of the resources surrounding them. Well, the same is true in organizations,” explains Lencioni.

The price of an unhealthy organisation is wasted resources and wasted time, decreased productivity, increased staff and customer churn.

Making sense

So what is a healthy organisation? It is an organisation that is whole, consistent and complete, that is, its management, operations, strategy and culture fit together and make sense, explains Lencioni. Structured in this way it would have a minimal amount of politics and confusion. It would have a high levels of morale and productivity, and very low levels of valued employees leaving the organisation.

Achieving this state of health requires a set of disciplines.

First among all of these disciplines is a cohesive leadership team. This is followed by creating and sharing the clear objectives, values, and direction of the organisation.

To create a leadership team that is healthy, does not happen by itself. It requires concerted, thoughtful effort, and the adoption of a few critical, non-bureaucratic systems to keep it cohesive.

The leadership team will need to be a small group of people who all feel collectively responsible for achieving a common objective for their organisation. It will comprise three to nine people; any more is usually problematic. When a team is small, people use their time together to ask questions and get clarity, much like a real conversation.

They know they will be able to regain the opportunity to share their opinions as the meeting progresses. With a large group, members have only one, unsatisfactory chance to say and ask everything they need to.     
 
There is undeniable evidence that many executives do not genuinely understand the critical importance of leadership team cohesion. This is undoubtedly the difference between a “working group” and a real leadership “team”. The distinction is best understood when you see the former as golf and the latter as soccer.

In a cohesive team no one would say: “Well, I did my job. Our failure isn’t my fault,” even if one member is in Finance and the other in Operations.

Key to achieving this real team is what Lencioni calls “vulnerability-based trust”. This occurs, he explains, when members are completely comfortable being transparent, honest, and naked with one another, where they say and genuinely mean: “I made a mistake”, “I need your help” or “Your idea is better than mine”.

This level of team cohesion requires effort to achieve, and vigilance to maintain. However, it is not all. There are other behaviours identified by Lencioni: mastering conflict, achieving commitment among members, embracing accountability, and an intense focus on results.

While leadership team effectiveness is only the first part of Lencioni’s four-part prescription for a healthy organisation, it is undoubtedly the single most important factor. The organisation also requires clear, unequivocal direction from the top, well communicated and unambiguously understood. These messages need to be adopted and executed by all.

Much as been written about “organisational health” (phrased in various ways,) and I have read many books on this topic. No book I have read is as practical as this one. Read it slowly.

Readability:     Light --+-- Serious
Insights:        High -+--- Low
Practical :       High +---- Low

 - Fin24

*Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works. Views expressed are his own.