The Advantage: Why Organizational Health Trumps Everything Else In Business

by Patrick Lencioni

In the course of my consulting firm’s fifteen years as a company, we’ve changed our business definition three times. Keep in mind that our core values and reason for existing have never changed.

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. That means every single decision, if it is made intentionally and consistently, will be part of the overall strategy.

Many leadership teams struggle with not wanting to walk away from opportunities that seem basically good and easily justifiable outside the context of having a strategy, but which would distract the organization and pull it away from its stated intent. Strategic anchors give a leadership team the clarity and courage to overcome these distractions and stay on course.

Most organizations I’ve worked with have too many top priorities to achieve the level of focus they need to succeed.

The point here is that every organization, if it wants to create a sense of alignment and focus, must have a single top priority within a given period of time.

What a crisis provides for an organization, whether that organization is an emergency responder accustomed to dealing with crises or a more traditional organization that finds itself temporarily in the midst of one, is a rallying cry, a single area of focus around which there is no confusion or disagreement.

I called this rallying cry “a thematic goal” because it needs to be understood within the context of the organization’s other goals, at the top of the list. And so, the thematic goal is the answer to our question, What is most important, right now?

A thematic goal is … Singular. One thing has to be most important, even if there are other worthy goals under consideration. Qualitative. The thematic goal should almost never be established with specific numbers attached to it. The opportunity for putting quantitative measures around a thematic goal comes later, and it should not be done too early because it can too narrowly prescribe what needs to be achieved and limit people’s ability to rally around it. Temporary. A thematic goal must be achievable within a clear time boundary, almost always between three and twelve months. Anything shorter than three months feels like a fire drill, and anything longer than twelve invites procrastination and skepticism about whether the goal will endure. (I’ll wait a few months to focus on that because it will probably change, and, who knows, I might not even be working here then.) Shared across the leadership team. When executives agree on their top priority, they must take collective responsibility for achieving it, even if it seems that the nature of the goal falls within one or two of the executives’ regular areas of ownership.

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?

Different kinds of organizations have different thematic goals, defining objectives, and standard operating objectives for a variety of reasons. However, what they all have in common is that their goals fit on a single sheet of paper.

Regardless of how clear or confusing a company’s “org” chart may be, it is always worthwhile to take a little time to clarify so that everyone on the leadership team knows and agrees on what everyone else does and that all critical areas are covered.

The best alternative to these extremes and the most effective tool for keeping key decisions alive is the creation of something we refer to as a playbook: a simple document summarizing the answers to the six critical questions. While every organization will, and should, create a playbook that is customized to their needs, there are two things that the leaders of any organization should do to make their playbook work.

Second, leadership team members should keep their playbook with them at all times. And not buried in a briefcase. They should keep it on their desks, bring it to staff meetings, and have it available for quick reference and as a tool for communicating to employees.

Once a leadership team has become cohesive and worked to establish clarity and alignment around the answers to the six critical questions, then, and only then, can they effectively move on to the next step: communicating those answers. Or better yet, overcommunicating those answers—over and over and over and over and over and over and over again.

The most reliable and effective way to get an organization moving in the same direction is for members of a leadership team to come out of their meetings with a clear message about what was decided, promptly communicate that message to their direct reports, and have those direct reports do the same for their own direct reports.

Amazingly, when employees in different parts of an organization hear their leaders saying the same things after meetings, they actually start to believe that alignment and clarity might be possible.

There are three keys to cascading communication: message consistency from one leader to another, timeliness of delivery, and live, real-time communication.

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.

the single most important reason to reward people is to provide them with an incentive for doing what is best for the organization.

Direct, personal feedback really is the simplest and most effective form of motivation.

Bad meetings are the birthplace of unhealthy organizations, and good meetings are the origin of cohesion, clarity, and communication.

When team members work in the same location, there are no good reasons for rejecting the daily check-in.

The most powerful impact of having teams meet every day is the quick resolution of minor issues that might otherwise fester and create unnecessary busywork for the team.

Instead of putting together an agenda ahead of time, team members need to come together and spend their first ten minutes of a meeting creating a real-time agenda. That involves two steps.

First, the leader needs to go around the room and ask every member of the team to take thirty seconds to report on the two or three key activities that they believe are their top priorities for the week.

Once everyone has taken their thirty seconds to list off, not expound on, their top priorities—most will use only ten or fifteen seconds—the leader moves on to the second part of creating a real-time agenda. This entails reviewing the one-page scorecard or chart that the team created—the one that includes their thematic goal, their defining objectives, and their standard operating objectives.

After the team has assigned their colors—a process that really is as enjoyable as it is informative—then and only then can they agree on what their agenda should be. Basically they will probably focus on the areas on the chart that are red or orange or perhaps one or two others that are particularly critical.

What makes this particularly tragic is that it is simply the result of executives mistakenly convincing themselves that meetings are inherently bad. Thinking they’re being efficient, they reduce the time they spend in meetings by cramming every discussion into one big staff meeting. What they’re really doing is ensuring that those staff meetings are going to be ineffective and that the most important conversations they should be having—topical, strategic ones—are cut short.

separate their tactical conversations from their strategic ones. Combining the two just doesn’t work and leaves both sets of issues inadequately addressed.

Activities that should be addressed during these meetings include reviewing the organization’s strategic anchors and thematic goal, assessing the performance of key employees, discussing industry changes and competitive threats, and of course, reviewing the behaviors of the team members in regard to cohesiveness. In essence, the off-site review is where the leadership team needs to step back and revisit the four disciplines covered in this book: team, clarity, communication, and human systems.

There is just something about doing this four times a year that makes sense. More frequently than that doesn’t give a team enough time to make progress on critical issues and identify meaningful trends in the market or in the company. Less frequently usually means that people are going to forget about what they talked about at the previous meeting, which makes continuity difficult and progress unlikely.

Finally, it’s important to remember that at the end of every meeting, with the exception of the daily check-ins, team members must stop and clarify what they’ve agreed to and what they will go back and communicate to their teams.

Tactical and strategic discussions are addressed in separate meetings. During tactical staff meetings, agendas are set only after the team has reviewed its progress against goals. Noncritical administrative topics are easily discarded. During topical meetings, enough time is allocated to major issues to allow for clarification, debate, and resolution. The team meets quarterly away from the office to review what is happening in the industry, in the organization, and on the team.

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.

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.