The Advantage: Why Organizational Health Trumps Everything Else In Business

by Patrick Lencioni

When leaders try to use their purpose as a strategic differentiator, they usually fail to fully tap into the real reason for having one, and then find themselves disappointed when they learn that another company, perhaps even within their industry, shares theirs. They need to remember that it is simply about getting clarity.

an organization that has properly identified its values and adheres to them will naturally attract the right employees and repel the wrong ones.

Confusing core and aspirational values is a frequent mistake that companies make. It is critical that leaders understand the difference.

Permission-to-Play Values These values are the minimum behavioral standards that are required in an organization. Although they are extremely important, permission-to-play values don’t serve to clearly define or differentiate an organization from others. Values that commonly fit into this category include honesty, integrity, and respect for others.

If those sound generic, something you’ve seen on virtually all of the values statements plastered on the walls of every mediocre company you’ve ever visited, then you understand the problem. Permission-to-play values must be delineated from the core to avoid dilution and genericism

the reason organizations need to understand the various kinds of values is to prevent them from getting confused with and diluting the core. Core values are what matters most.

Once an organization successfully identifies and describes its core values and separates them from the other kinds, it must then do its best to be intolerant of violations of those values.

an organization’s strategy is simply its plan for success. It’s nothing more than the collection of intentional decisions a company makes to give itself the best chance to thrive and differentiate from competitors.

The best way to identify a thematic goal is to answer the question, If we accomplish only one thing during the next x months, what would it be? In other words, What must be true x months from now for us to be able to look back and say with any credibility that we had a good period? These questions provide a critical level of focus for leaders who are being pulled in numerous directions.

it is the lack of a defined, compelling rallying cry or thematic goal that allows most bad staff meetings to happen, which enables poor decision making.

every organization of any size needs some division of labor, and that begins at the very top. Without clarity around that division of labor, the potential for politics and infighting, even among well-intentioned people, is great.

Although there is often clarity among executives in most organizations about who does what on the team, making assumptions about that clarity can lead to surprising and unnecessary problems.

“An organization has to institutionalize its culture without bureaucratizing it.” There is a delicate but critical balance between too much and too little structure in an organization, and the people responsible for creating that balance are its leaders.

HR and legal professionals play important roles in the creation and administration of human systems. But the initial design of those systems must be driven by the people who set the direction for the organization in the first place and have the authority to guard against the bureaucracy that turns a useful human system into an administrative distraction. When leadership team members abdicate responsibility for this, they are often left with more generic, rote systems and processes than they wanted.

Hiring without clear and strict criteria for cultural fit greatly hampers the potential for success of any organization.

For all the talk about hiring for fit, there is still too much emphasis on technical skills and experience when it comes to interviewing and selection. And this happens at all levels. When push comes to shove, most executives get enamored with what candidates know and have done in their careers and allow those things to overshadow more important behavioral issues.

The most memorable time of an employee’s career, and the time with the biggest impact, are his or her first days and weeks on a new job. The impact of first impressions is just that powerful, and healthy companies take advantage of that to move new employees in the right direction. That means orientation shouldn’t revolve around lengthy explanations of benefits and administration but rather around reinforcing the answers to the six critical questions.

Leaders of organizations, even very large organizations, need to understand the value of bringing in new employees with clarity, enthusiasm, and a sense of their importance. It is an opportunity that disappears within days or weeks of a new employee’s arrival and should never be wasted.

Healthy organizations believe that performance management is almost exclusively about eliminating confusion. They realize that most of their employees want to succeed, and that the best way to allow them to do that is to give them clear direction, regular information about how they’re doing, and access to the coaching they need. Healthy organizations also realize that even the most rigorous systems cannot prevent all lawsuits and that sacrificing the real purpose of their performance management system to prevent them, even if that were possible, is a bad trade-off.

it is critical that organizations separate corrective action processes from the regular performance management system, because the last thing an organization wants is for its good employees to feel as if they’re being interrogated and prepared for dismissal.

unsatisfied employees who receive greater financial compensation as an incentive to stay in an unhealthy organization feel cheapened by the gesture. And they are usually just as determined to eventually find a better place to work.

The fact is that the human brain isn’t meant to process so many disparate topics in one sitting. There needs to be greater clarity and focus, which means that there needs to be different kinds of meetings for different kinds of issues. And, yes, that means there will be more meetings, not fewer.

That’s right. Leaders who want healthy organizations cannot try to eliminate or reduce time spent in meetings by combining them or cutting them short. Instead, they have to make sure that they are having the right kinds of meetings, and then they must make those meetings effective. As a result—and trust me when I say this—leaders actually come to look forward to their meetings, even enjoy them. In fact, they get real work done during those meetings which makes their lives, and the lives of their employees, better as a result.

The thesis behind all of this is worth repeating: a great deal of the time that leaders spend every day is a result of having to address issues that come about because they aren’t being resolved during meetings in the first place. That’s why it’s really hard for executives to make a credible case for spending less time in meetings, assuming those meetings are good ones.

At every step in the process, the leader must be out front, not as a cheerleader or a figurehead, but as an active, tenacious driver. When it comes to building a cohesive team, leaders must drive the process even when their direct reports are less than excited about it initially. And they must be the first to do the hardest things, like demonstrating vulnerability, provoking conflict, confronting people about their behavior, or calling their direct reports out when they’re putting themselves ahead of the team.

People who lead healthy organizations sign up for a monumental task—and a very selfless one. That is why they need to relinquish their more technical responsibilities, or even their favorite roles, that others can handle. Because when an organization is healthy (when the leader at the top is doing his or her most important job), people find a way to get things done. When an organization is unhealthy, no amount of heroism or technical expertise is going to make up for the confusion and politics that take root. The truth is, being the leader of a healthy organization is just plain hard. But in the end, it is undeniably worth it.