Patrick Lencioni is a well-known management consultant and author, known for books like The Five Dysfunctions of a Team. I haven’t gotten around to reading his books, but somebody recently recommended The Advantage, subtitled Why organizational health trumps everything else in business, so I picked it up.
Lencioni views this book as the synthesis of the work described in his other books – a simple guide to creating more effective organizations. His opening sentence reads:
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.
Lencioni defines organizational health as integrity: “when it is whole, consistent, and complete, that is, when its management, operations, strategy, and culture fit together and make sense.” In other words, even if an organization hires all of the smartest people, it will not be able to effectively use them without making sure they are all aligned and pulling together in the same direction. The leaders of the organization also need to be able to receive the intelligence and wisdom from their people, and not waste the teams’ efforts by working at odds to each other. In other words, the opposite of a healthy organization is what we all deride as corporate politics, and none of us want to be part of such an organization.
Lencioni outlines a deceptively simple path towards organizational health:
- Build a cohesive leadership team
- Create clarity
- Overcommunicate clarity
- Reinforce clarity
The deceptively simple aspect is that I read this book and said “Yes, that all makes sense”, but then realized I have never been part of an organization that consistently prioritizes and executes these health initiatives. And even when I have been part of the management team, I do not prioritize these, instead getting distracted by the fire drill du jour. So this book is a reminder to focus on these important basics, rather than the urgent distractions.
Step 1 is to build a cohesive leadership team. Lencioni believes that an effective leadership team must be small enough (3-10 people) so that each member feels personally responsible for the success of the whole organization. Some behaviors he describes of such a leadership team are:
- Trust and vulnerability – being able to make mistakes and discuss them so everybody can improve.
- Constructive conflict – if difficult decisions need to be made, all sides of the issue must be discussed vigorously and without rancor, which can’t happen without the trust established above.
- Collective accountability – once decisions are made, all take responsibility for executing on the decision, even if they argued against the decision.
- Focusing on organization results – success is defined as the whole organization succeeding, not just a particular department. There should be no situation where sales can say “My team did its job” if the organization did not hit its goals.
Once the leadership team is established, then the next step is to Create Clarity on what the organization is for, and what it is focused on. Lencioni outlines six questions which every organization should be able to answer:
- Why do we exist? (mission)
- How do we behave? (no more than 3 differentiating core values)
- What do we do?
- How will we succeed? (what is our strategy and differentiator?)
- What is most important, right now? (what is our thematic goal? What defining objectives are necessary to achieve that goal? What metrics will show progress towards those objectives?)
- Who must do what?
What I particularly like about Lencioni’s formulation is that if the leadership team can reach clarity on the answers to these questions, they can write down the whole vision for the organization on a single page, which Lencioni calls the organizational playbook. He suggests having the playbook be available in every meeting to review how actions being considered in the meeting align with the overall mission, values and strategy.
Once the leadership team is aligned, and the playbook is defined, it still remains to ensure that the entire organization is informed and aligned with the playbook. This is step 3, Overcommunicate Clarity. Lencioni notes that what feels like overkill repetition by the leaders is probably the minimum required communication for organization members to internalize the message. Each member of the leadership team should be able to articulate why it makes sense, and what their team has to do to execute on the vision. I once worked for a VP at Google who started each monthly all hands meeting with a slide of the same three metrics, and a plea for anybody on the team working on something that wasn’t focused on improving one of those metrics to contact her personally so she could sort out the misalignment. It was extremely powerful in driving agreement across the team on what mattered.
Such misalignments across the organization detract from clarity, which brings us to step 4, Reinforce Clarity. Lencioni is making the point that every structure and process within the company must also reinforce the playbook. For instance, if the playbook says that one of the core values is teamwork, but performance review and bonuses are awarded individually, that’s a misalignment. If core values are not included as part of the interview process, that’s a misalignment. The organization must live and breathe its values and playbook to be effective and healthy, and part of what the leadership team must do is drive consistency across all aspects of the company. Any discordant element can destroy the synergistic effects of organizational health.
One last great point that Lencioni made was that organizational health starts at the top. A cohesive leadership team will never develop trust, vulnerability, and accountability unless the leader/CEO goes first. And a CEO that doesn’t trust his or her people will never want to create and disseminate clarity in the way Lencioni describes. This reminds me of something that Patrick Pichette (former CFO of Google) once said: “Your CEO is your culture” – the person at the top sets the tone for the whole organization. His point was that an important consideration when deciding whether to take a job is how you align with the CEO’s values, because their values will set the culture.
I liked this book for having a clear, simple plan for improving organizational health. When I’ve been on healthy teams, I’ve seen elements of what Lencioni describes, and it makes a huge difference in making each team member more productive and effective. And yet, I have rarely seen this sort of clarity from a leadership team – I suspect that it almost seems like a waste of time to focus on these basics when there are more urgent and complex matters to address. Lencioni suggests the leadership team should be doing an offsite once a quarter to review and update the playbook, as he feels creating clarity for the organization is one of the most important and valuable responsibilities of the leadership team. I suspect he might be right, and I will be thinking how I can incorporate these ideas into the work I do.