April 11, 2012
By: Connie Blaszczyk, Managing Editor, Resource Center
What is organizational health? And why is it so essential to business success?
Best-selling author Patrick Lencioni, whose books have included The Five Dysfunctions of a Team, says that it “surpasses all other disciplines in business as the greatest opportunity for improvement and competitive advantage.”
With that in mind, we spoke with Lencioni about how large companies can generate organizational health.
Monster: Your book, The Advantage, emphasizes the importance of organizational health via leadership, teamwork, corporate culture, strategy and meetings. Why are these things so often overlooked in companies?
Lencioni: Business schools and the media tend to focus on what I call the “smart side” of business. These are the fundamentals of business and include areas such as strategy, marketing, finance, technology and other decision sciences. However, being smart is only half of the equation.
The healthy side of business, outlined in The Advantage, is often overlooked. Healthy organizations have minimal politics and confusion, high degrees of morale and productivity, and low turnover among employees.
Many leaders shy away from health because:
- They don’t see health as a real advantage
- They don’t want to take the time to work on health and
- Health is difficult to quantify.
Monster: You emphasize four disciplines for organizational health, three of which focus on clarity. Why is clarity so important?
Lencioni: When I work with clients, we spend over half of our time together on clarity. Without it, silos develop, politics creep in and the organization falters.
Developing clarity is not a onetime event. Once it is established, it must be communicated and reinforced continuously.
Monster: The third discipline, “Over-communicate clarity, ” is a means of increasing productivity and employee morale. How can often-repeated messages stay fresh and meaningful?
Lencioni: Vary the medium and delivery of the message. And, keep in mind, employees would rather have consistent messaging than messages that are “fresh.”
Some studies say that employees need to hear something seven times before they believe it.
Monster: What are four disciplines? How does the process work?
Lencioni: An organization doesn’t become healthy in a linear, tidy fashion. Like building a strong marriage or family, it’s a messy process that involves doing a few things at once, and it must be maintained on an ongoing basis in order to be preserved. Still, that messy process can be broken down into four simple steps or disciplines:
1. Build a Cohesive Leadership Team The first is all about getting the leaders of the organization to behave in a functional, cohesive way. If the people responsible for running an organization, whether that organization is a corporation, a department within that corporation, a start-up company, a restaurant, a school or a church, are behaving in dysfunctional ways, then that dysfunction will cascade into the rest of the organization and prevent organizational health. And yes, there are concrete steps a leadership team can take to prevent this.
2. Create Clarity The second step for building a healthy organization is ensuring that the members of that leadership team are intellectually aligned around six simple but critical questions [see these below].
On topics ranging from: why the organization exists to what its most important priority is for the next few months, leaders must eliminate any gaps that may exist between them, so that people one, two or three levels below have complete clarity about what they should do to make the organization successful.
3. Over-Communicate Clarity Only after these first two steps are in process (behavioral and intellectual alignment) can an organization undertake the third step: over-communicating the answers to the six questions.
Leaders of a healthy organization constantly and I mean constantly repeat themselves and reinforce what is true and important. They always err on the side of saying too much, rather than too little. This quality alone sets leaders of healthy organizations apart from others.
4. Reinforce Clarity Finally, in addition to over-communicating, leaders must ensure that the answers to the six critical questions are reinforced repeatedly using simple human systems.
That means any process that involves people, from hiring and firing to performance management and decision-making, is designed in a custom way to intentionally support and emphasize the uniqueness of the organization.
Monster: You write about the importance of a cohesive leadership team. What motivates people to form a “real” team?
Lencioni: Oftentimes, people are motivated to become part of a real team because they are not getting the results they want or need. They are not getting traction and don’t know why. Often, they have a hunch issues on the team are blocking their success.
Monster: Can it be meaningfully fostered by financial reward? Financial reward should not be the driver for forming a cohesive team, but can help perpetuate the team ethic once established.
Lencioni: If a team is committed to each other and a common objective, a good portion of their compensation or reward structure, though not necessarily all of it, should be based on the achievement of that common objective.
Monster: What role does the CEO play in creating a healthy business environment that promotes productivity?
Lencioni: I believe the single biggest factor in determining whether an organization is going to get healthier -- or not -- is the genuine commitment and active involvement of the person in charge.
Monster: Some CEOs promote conflict among their leadership team, believing that it generates organizational health. What are the ground rules to healthy conflict?
Lencioni: Healthy conflict is centered around ideas, not people or personalities. Healthy organizations encourage ideological conflict, which is the willingness to disagree, even passionately, around important issues and decisions.
Monster: What distinguishes healthy conflict from unhealthy conflict?
Lencioni: We want our teams to be engaged in all the constructive conflict they can possibly have, without the conflict becoming destructive or interpersonal. This balance is impossible to get right every time. Teams must learn how to occasionally cross the line and manage it positively.
Monster: What size should the leadership team be to be most effective?
Lencioni: Between 3-12 people, although I think anything more than 8 or 9 can be problematic. Having too many people on the team can cause a variety of logistical issues, especially around communication.
Monster: Your 2002 book, The Five Dysfunctions of a Team, continues to be national bestseller. Is your hope that The Advantage will address these ongoing issues once and for all?
Lencioni: Is that even a remote possibility, given the tendencies of human nature? Yes, looking at the healthy side of business, whether the topic is teams or the organization, is messy.
But just like marriage or parenting, some of the most rewarding pursuits in life are ongoing, never perfect. The key is to stick to a simple set of principles, learn from your missteps and have the discipline to keep going.
The six critical questions are:
- Why do we exist? The answer to this question will yield a core purpose, or the fundamental reason the company is in business.
- How do we behave? This question examines behaviors and values required for success.
- What do we do? This answer provides a simple, direct explanation of the business.
- How will we succeed? This question requires the team members to develop a strategy.
- What is most important, right now? The answer to this question is the establishment of a unifying thematic goal and action plan.
- Who must do what? This question addresses roles and responsibilities.
Read more from Patrick Lencioni: Cultivate a Healthy Business Culture for your Small Business
Patrick Lencioni is a best-selling author, speaker and consultant with over two decades of experience working with CEOs and their executive teams. His most recent book is The Advantage: Why Organizational Health Trumps Everything Else In Business (Wiley, 2012).
He is founder and president of The Table Group, a consulting firm dedicated to building healthy organizations. He is the author of many best-selling books including The Five Dysfunctions of a Team, which continues to be a weekly fixture on national bestseller lists; his books have sold over three million copies.
Pat's work has been featured in numerous publications such as Bloomberg BusinessWeek, Fast Company, INC Magazine, USA Today, Fortune, Drucker Foundation' Leader to Leader, and Harvard Business Review.
The Wall Street Journal has named Lencioni one of the most in-demand business speakers. And he has been a keynote speaker on the same ticket with George Bush Sr., Jack Welch, Rudy Guiliani, Bill Clinton, and General Colin Powell.