What I Learned from Reading "The Advantage: Why Organizational Health Trumps Everything Else in Business"

Patrick M. Lencioni has been fascinated by organizations his entire life. Even as a kid and then a young consultant for Bain & Company, he sensed that problems in an organization stemmed not from spreadsheets and strategy initiatives, but from something more qualitative in the way people interact with each other. He’s followed that instinct to help multinational corporations, small ventures, professional sports teams, and even schools strengthen their organizational health.

Over the years, Lencioni has come to believe that “the single greatest advantage any company can achieve is organizational health. Yet it is ignored by most leaders even though it is simple, free, and available to anyone who wants it.”

So he wrote The Advantage: Why Organizational Health Trumps Everything Else in Business to explain why it’s so important and how you can improve the health of your team.

What is organizational health?

An organizationally healthy company enjoys minimal politics, minimal confusion, high morale, high productivity, and low turnover. Those with poor health waste time and resources, produce less, and lose more employees and customers.

But most leaders find it too simple, unexciting, and unquantifiable to put much energy behind it. Lencioni wryly notes, “As I write this, I’m all too aware that the advice I’m giving might sound extremely basic. But then again, most organizations are unhealthy precisely because they aren’t doing the basic things, which require discipline, persistence, and follow-through more than sophistication or intelligence.”

Lencioni provides a clear description of the key behaviors of healthy organizations along with tools you can use to effect change in your company. And he intersperses plenty of anecdotes from his own work to show these behaviors in action.

Healthy companies have four disciplines:

• A cohesive leadership team
• Clarity
• Strong communications
• Human systems that reinforce objectives and values

Start with a cohesive leadership team.

Lencioni defines a leadership team as “a small group of people who are collectively responsible for achieving a common objective for their organizations.” He emphasizes the small size (three to twelve people total) and stresses that the members should each contribute a unique talent or perspective.

He also insists that the members must “place a higher priority on the team they’re a member of than the team they lead in their departments.” If not, they'll simply jockey for their own positions and resources, and the company will work against itself.

Additionally, team members have to trust each other, engage in constructive conflict, fully commit to collective decisions, hold each other accountable, and focus on results. It’s a tall order for any group of people, much less those who are also running the day-to-day operations of their own departments.

But of all these behaviors, trust is key. Trust lets people share honestly with each other, which is crucial. Why ask people to help make company decisions if they can't share their real opinions?

Trust also encourages constructive conflict. The best ideas will come out of a crucible where they’ve been tested, questioned, and challenged. When people can rely on others to challenge ideas without personal attacks, the collective decisions get stronger.

Finally, when a group based on trust can successfully test ideas, the members can commit fully to decisions, hold each other accountable to their agreed actions, and focus on the results they’re trying to achieve.

Lencioni asserts that a leadership team with these basic characteristics must head any healthy organization. Without that open, clear, cohesive direction, management abdicates its role as decision maker and leaves employees to choose their own priorities higgledy-piggledy.

He offers plenty of advice on building that great team, but good leadership is just the beginning.

Then get clear about what you’re doing.

For clarifying your collective purpose as a company, Lencioni advises ditching the traditionally meaningless mission statement and answering six questions instead.

1. Why do we exist?
2. How do we behave?
3. What do we do?
4. How will we succeed?
5. What is most important, right now?
6. Who must do what?

Answering these questions in honest, plain English (no marketing feel-good phrases allowed) will help leadership teams focus on the company’s purpose, core values, success strategy, top priority, and responsibilities.

The “how do we behave question” is intended to yield three core values which “lie at the heart of the organization’s identity, do not change over time, and must already exist.” Lencioni makes a wonderful distinction between the values inherent in an organization and the those that would be nice to have (aspirational values). And he advocates taking a long, honest look at the attributes of the leadership team as well as paragons of company culture to determine those core values.

To illustrate the point, he shares the story of an airline which has a core value of humor. When a flyer complained that the humor wasn’t appreciated, the CEO simply responded, “We’ll miss you.” Their core values not only describe the kind of employees they want on their team, but also the kind of customers they want.

Answering the six questions will result in a short, direct “playbook” which should guide every decision the leadership team makes.  So, with playbook in hand, management can bump fists on achieving clarity of purpose and direction. But what about the rest of the company?

Share it once, share it a dozen times.

Lencioni astutely points out that leaders tend to come out with proclamations on a regular basis and most employees have learned that these grand plans typically lead to nothing. That new initiative firing up the C-suites will never make a difference in every day work.

But in a healthy organization, the leadership team gets clear on their objectives and stands behind them over the long run. That means sharing the same basic message across all departments and reminding people over and over. It’s not because they think people are stupid; overcommunication reinforces leadership’s commitment and helps everyone adjust mindsets.

And it’s more than mere repetition. Lencioni writes, “Effective communication requires that key messages come from different sources and through various channels, using a variety of tools.” He favors real-time communication, face-to-face if possible, but other electronic and print channels should echo the same themes.

Once management and employees are moving in the same direction, the human systems need to reflect those goals as well.

Manage human systems in accordance with the company’s values and goals.

All this honest clarity and communication will break down if the processes in place for recruitment, hiring, performance management, compensation, and recognition don’t also reinforce the priorities.

Lencioni admits that it’s tempting to model your annual performance reviews off the GE model, or hire like Google does, but what works in one company doesn’t work in another. And the purpose of the best human systems is to “keep managers and employees focused on what the organization believes is important.”

Hiring and interviewing procedures should have enough structure to ensure consistency but focus on cultural fit and core values. Performance management should help employees understand how to succeed and give them the resources to do so. Rewards, compensation, and recognition should incent people to do what’s best for the company.

Depending on the current state of your company’s health, you may need to revamp and simplify these systems. Lencioni also offers great advice for re-tooling that dreaded corporate time sink – the meeting – so that it helps people become more focused on key activities and less distracted by minutia.

Don’t be fooled by unsexy simplicity.

Throughout the book, Lencioni notes that he’s not talking about revolutionary new ideas. He’s talking about the ABCs. Ask any great athlete the secret to success and he or she will say, “relentless focus on the basics.”

But most of us ignore the fundamentals. They’re boring and uncomfortable. They take dedication over long periods of time before they pay off. And they don’t let you use cool words like “disruptively innovative paradigm shift.”

But Lencioni thinks it’s worth it. He predicts, “At the end of the day, at the end of our careers, when we look back at the many initiatives that we poured ourselves into, few other activities will seem more worthy of our effort and more impactful on the lives of others, than making our organizations healthy.”

He makes a compelling case.

Many thanks to Patrick Lencioni for a clear, comprehensive book stuffed with powerful advice and tools.

Note: This article previously appeared on Pract.us/news.