Insights – The Advantage: Notes from the Book
Patrick Lencioni explains what organisational health is and why it is important for the success of a business.
Organisational health- Whole, consistent and complete and occurs when management, operations, strategy and culture all fit together and make sense.
The single greatest advantage any company can achieve is organisational health. Yet it is ignored by most leaders even though it is simple, free and available to everyone who wants it
Three biases that prevent a business from achieving organisational health are:
- Sophistication bias
- Adrenaline bias
- Quantification bias
Smart v Healthy
Smart organisations are good at strategy, marketing, finance and tech.
Healthy organisation means minimal politics and confusion, high morale and productivity and low turnover amongst good employees.
The price of poor health includes:
- Wasted resources
- Decreased productivity
- Increased turnover
- Customer attrition
- Unhappy team
To build organisational health a business must:
1 Build a cohesive leadership team
2 Create clarity
3 Overcommunicate clarity
4 Reinforce clarity
Discipline 1: Build a cohesive leadership team:
Leadership team is a small group collectively responsible for achieving a common objective for the organisation through a number of behaviours:
Behaviour 1- Building Trust:
Vulnerability based trust- where the team is comfortable being transparent, honest, can admit mistakes; or when needed ask for help and say I’m sorry.
Tools that help include:
-sharing personal histories
-personality profiling such as Myers Briggs
Fundamental attribution error is the tendency of humans to attribute negative or frustrating attributes to another persons intentions or personalities, rather than environmental factors (which we do for our own behaviours.
Leader always goes first.
Behaviour 2- Mastering Conflict:
When there is trust, conflict becomes the pursuit of truth or best possible answer.
Without trust conflict is focused politics or manipulation to win an argument.
Conflict avoidance creates resentment, and frustration.
Tools that help:
-Mining for conflict
-Real time permission
Behaviour 3- Achieving Commitment:
“If people don’t weigh in they can’t buy in”
if no involvement it leads to passive agreement -where people don’t say anything but don’t commit.
Should get all to agree to commit to a group decision even if they initially disagreed.
Behaviour 4- Embracing Accountability:
Peer accountability- knowing a team is fully committed to something rather than reporting to boss.
Easier to confront someone about a measurable performance rather than a behavioural issue.
Tools that help:
Team effectiveness exercise – each person shares one thing about each other that makes team better. Opportunity to respond. Then provide feedback on one thing each person needs to improve on. Opportunity to respond (not rebut)
Public v private accountability- can depend on situation but public can often encourage benefits you would not get in private ie shared learning, knowledge of accountability, reinforce culture.
Behaviour 5 – Focusing on Results:
Measurement of results are not purely revenue based.
Collective goals ensure we all row in the same direction.
Commitment to organisation, rather than their own specific team within. ie the Higher team
Discipline 2: Create Clarity
There is no way that employees can be empowered to fully execute responsibilities when there is no clear and consistent message on what is important from their leaders across an organisation.
We need to make clear:
1. Why do we exist?
We need to make it clear what is our core purpose. This might be focused on
- Industry greater cause
2. How do we behave?
Our values are the behavioural traits that are inherent in an organisation
The values help guide us in every relevant decision in the business.
- Core values- inherent and natural and apparent in organisation for long time.
- Aspirational values- those it wishes it had and would like to develop
- Permission to play values- base that are minimum behavioural standards
3. What do we do?
Business definition – the definition of the service or product provided.
Not to be confused with marketing spin.
4. How will we succeed?
This is the strategic plan or “Competitive strategy’
Collection of intentional decisions a company makes to give itself the best chance to thrive and differentiate from competitors.
Strategic anchors- Start by creating a list of decisions and realities that form the context of current situation. Eg consider pricing, hiring, location, marketing, advertising, branding, sourcing, partnering, experience, service offerings, decor
Look for patterns or connections that form a theme ie the strategy amoeba
This will equally assist with decisions of what not to do
5.What is important right now?
“If everything is important, nothing is”. Too many priorities is issue.
Rallying cry/ thematic goal
- singular ie most important in that time.
- Qualitative- no specific numbers attached to it
- Temporary – time bound
- Shared across leadership team
Defining objective- categories of activities required to meet thematic goal ( should be between 4 and 6)
Standard operating objectives-
6.Who must do what?
Leaders must clearly stipulate responsibility and roles
Ensure clarity, not too much overlap and no roles missing.
An organisation should have a playbook which outlines these things in one page.
There is no right answer, what is important is having an answer around which all team members can commit.
Perfection paralysis- best will say they were not necessarily the best at having the right answer but being able to rally around the best answer they could find at the time.
Discipline 3: Overcommunicate Clarity
Things don’t sink in until you have heard 7 times.
People fail to communicate because
- Repetition seems wasteful
- Fear if insulting employees
- Get bored
Effective communication is more than repetition, would also be from different sources; various channels and more than one tool.
Cascading communication- spreading true rumours ( and encouraging team to continue to spread)
Important to consider message consistency, commitment clarification ie ready to release,
Important to have channel for upward communication.
Discipline 4: Reinforce Clarity
Important to imbed into the fabric and structure of organisation
Culture and Values should be considered at all phases ie
- Recruiting and hiring
- Performance management – should be about eliminating confusion
- Compensation and reward
Problems with meetings:
- Meeting stew is like a clueless cook taking all ingredients from pantry and throwing into a pot. And wondering why it doesn’t taste very good.
- Too many people who don’t trust each other and can’t engage in productive conflict will not work
Healthy organisations will have more meetings but they are having the right kinds of meetings- to separate issues into effective groups
- admin Eg a daily checkin 5-10 mins – No agendas just exchange of info
- Tactical Eg a weekly staff – 45-90 mins – Team should create a real time agenda during the meeting by listing priorities. Would also include thematic goal, defining objectives, operating objectives how are we doing against the things we said are most important. Then focus on things not being achieved.
- Strategic – ad hoc topical 2-4 hours – Separate meetings for each critical issues rather than jamming into one meeting, At least once a month.
- Developmental – Quarterly offsite review 1-2 days. Purpose should be unique and focused. Strategic anchors, thematic goals, team preface, industry opportunities and threats
In every step the leader must be in front , not as a cheerleader or figurehead but as as active tenacious driver.
Author: Donna Bruce