The Advantage: Why Organizational Health Trumps Everything Else In Business
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An organization has integrity—is healthy—when it is whole, consistent, and complete, that is, when its management, operations, strategy, and culture fit together and make sense.
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A good way to recognize health is to look for the signs that indicate an organization has it. These include minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.
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Most leaders prefer to look for answers where the light is better, where they are more comfortable. And the light is certainly better in the measurable, objective, and data-driven world of organizational intelligence (the smart side of the equation) than it is in the messier, more unpredictable world of organizational health.
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The advantages to be found in the classic areas of business—finance, marketing, strategy—in spite of all the attention they receive, are incremental and fleeting.
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An organization that is healthy will inevitably get smarter over time.
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The financial cost of having an unhealthy organization is undeniable: wasted resources and time, decreased productivity, increased employee turnover, and customer attrition.
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Aside from the obvious impact this has within the organization, there is a larger social cost. People who work in unhealthy organizations eventually come to see work as drudgery.
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When an organization’s leaders are cohesive, when they are unambiguously aligned around a common set of answers to a few critical questions, when they communicate those answers again and again and again, and when they put effective processes in place to reinforce those answers, they create an environment in which success is almost impossible to prevent.
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A leadership team is a small group of people who are collectively responsible for achieving a common objective for their organization.
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Inquiry is rarer and more important than advocacy.
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Inclusivity, or the basic idea behind it, should be achieved by ensuring that the members of a leadership team are adequately representing and tapping into the opinions of the people who work for them, not by maximizing the size of the team.
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When executives put people on their leadership teams for the wrong reasons, they muddy the criteria for why the team exists at all.
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The only reason that a person should be on a team is that she represents a key part of the organization or brings truly critical talent or insight to the table.
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Collective responsibility implies, more than anything else, selflessness and shared sacrifices from team members.
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The kind of trust that is necessary to build a great team is what I call vulnerability-based trust. This is what happens when members get to a point where they are completely comfortable being transparent, honest, and naked with one another, where they say and genuinely mean things like “I screwed up,” “I need help,” “Your idea is better than mine,” “I wish I could
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learn to do that as well as you do,” and even, “I’m sorry.”
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Nowhere does this tendency toward artificial harmony show itself more than in mission-driven nonprofit organizations, most notably churches. People who work in those organizations tend to have a misguided idea that they cannot be frustrated or disagreeable with one another. What they’re doing is confusing being nice with being kind.
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Great teams avoid the consensus trap by embracing a concept that Intel, the legendary microchip manufacturer, calls “disagree and commit.” Basically they believe that even when people can’t come to an agreement around an issue, they must still leave the room unambiguously committed to a common course of action.
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At its core, accountability is about having the courage to confront someone about their deficiencies and then to stand in the moment and deal with their reaction, which may not be pleasant.
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Conflict is about issues and ideas, while accountability is about performance and behavior.
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They asserted that successful, enduring organizations understand the fundamental reason they were founded and why they exist, and they stay true to that reason.
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In order to successfully identify their organization’s purpose, leaders must accept the notion that all organizations exist to make people’s lives better.
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Second, an organization’s reason for existence, its purpose, has to be true.
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an organization’s strategic anchors should change whenever its competitive landscape shifts and market conditions call for a different approach.
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Once the leadership team has answered each of the six critical questions, it is absolutely critical for them to capture those answers in a concise, actionable way so that they can use them for communication, decision making, and planning going forward.
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In most cases, the answers to the six questions can be captured on a single page—two at the most.
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Second, leadership team members should keep their playbook with them at all times.
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I don’t know of a better system than green for “things are good, we’re ahead of schedule,” yellow for “we’re doing okay, but we’re not yet where we ought to be,” and red for “we’re way behind on this one.”
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What else should leaders be doing besides going to meetings? E-mail? Analysis? Customer visits? Okay,