The Advantage 

By: Patrick Lencion



According to Patrick Lencioni, the author of numerous best-selling business fables including The Five Dysfunctions of a Team, the biggest opportunity for competitive advantage is not about strategy, finance or marketing. It’s about how we manage our organisations. It’s about context, integration and practicality. Join us for the next ten minutes or so to find out how we too can take that advantage.

Lesson 1: Organisational Health 101

Here is Lencioni’s mantra: The single greatest advantage any company can achieve is organisational health. Yet evidence suggests it is ignored by most leaders, even though it is simple, free and available to anyone who wants it. Why? Because most leaders believe they are too sophisticated, too busy, or too analytical to bother with it. They suffer from unjustified biases.

To some, organisational health is so simple and accessible that they don’t see it as an advantage. Others are in too much of a hurry to succeed that they lose interest in it because it takes ‘too long’. Organisational health just isn't a sexy topic. But Lencioni believes otherwise.

Let’s look at the benefits:

A healthy organisation is whole, consistent and complete. Its management, operations, strategy and culture have all come together.

Healthy organisations can be recognised by their lack of internal politics, high staff morale, great productivity and low staff turnover.

Leaders of healthy organisations don’t rely on how smart they are. They know there are things they don’t know. Health trumps hubris.

Lencioni suggests that to gain organisational health we need to follow four disciplines which we will cover in the remainder of this summary. They are:

  • Build a cohesive leadership
  • Create Clarity
  • Over-communicate clarity
  • Reinforce clarity.

Lesson 2: Building a Cohesive Leadership Team

What do we mean by ‘Cohesive’? Fundamentally, Lencioni believes that if an organisation is not led by a team that is behaviourally unified, there is no chance that it will become healthy.

A cohesive team spends many hours working together on issues and topics that don’t fall into their area of responsibility. Marketing doesn’t just stick to marketing, IT don’t just stick to IT. They share and support each other beyond their day jobs. This all depends on mutual trust.

Cohesive teams trust each other so well, that they open up their vulnerabilities to each other. They are willing to openly admit their weaknesses to the team in the honest belief that the team will help them overcome by playing to each other’s strengths. Cohesive teams have strong emotional intelligence which they use to advantage.

Within cohesive teams, conflict is welcomed. Not angry, regretful conflict but conflict in a way where assumptions are openly challenged if a team member feels they are not quite right. Based on the team’s mutual trust, conflict becomes nothing more than the pursuit of truth and an attempt to find the best possible answer.

Cohesive teams argue to agreement. When leadership teams wait for consensus before taking action, they usually end up with decisions that are made too late and are mildly disagreeable to everyone: a recipe for mediocrity and frustration. What Lencioni proposes is we adopt Intel’s “disagree-and-commit” philosophy.

When people can’t come to an agreement around an issue, they must still leave the room with an unambiguous commitment to a common course of action. The cohesive team works together to attempt to reach consensus but if it can’t, then everyone, doubters or not, must buy-in.

Cohesive teams need to be accountable — and not just to meeting KPI’s. A cohesive leadership team needs to be behaviourally accountable. If someone steps over the line of what is acceptable, then they need to be challenged and brought back to the common aim. In these cases there is likely to be some discomfort, but in the end the level of cohesion among members of the team and the associated trust will overcome.

The ultimate point of building greater trust, conflict, commitment and accountability is the achievement of results. As Lencioni says, “no matter how good a leadership team feels about itself and how noble its mission might be, if the organisation it leads rarely achieves its goals, then, by definition, it’s simply not a good team”. Great teams ensure all members are doing what they can to achieve the common goal. This means challenge, conflict, realignment and other remedial actions underpinned by cohesiveness.

We’ve spent a good amount of time on this first discipline but without it, the other three will not bear fruit. Let’s now take each of them in progression.

Lesson 3: Create Clarity

Creating clarity is all about achieving alignment. Within the context of making an organisation healthy, it’s about creating so much clarity that there is little room for confusion, disorder and infighting. All too often leaders underestimate the impact of even subtle misalignment at the top and the damage caused by small gaps in the members of the executive team.

So how have organisations tries to achieve clarity? Achieving much less than hoped, corporate mission statements have become a common vehicle. Woolly statements containing corporate buzz-phrases are prevalent throughout business, but in general they have little impact. What actually does “achieving value” mean? Or “world class”? Very few mission statements have provided employees with an accurate description of what their organisation does to support clarity.

Lencioni states leaders need to give their employees clarity by answering six critical questions.

Why do we exist?
Employees in every organisation and at every level need to know that at the heart of what they do lies something grand and aspirational. Without this, they are likely to operate in a reactive, unprincipled and often inconsistent way. The purpose must identify the subject you serve. Is it the customer? Is it industry, community or a greater cause? Is it for wealth? The leadership team needs to decide and promote.

How do we behave?
The answer to this question is embodied in an organisation’s core values. More than anything else it describes an organisation’s personality and identifies how its staff should behave without the need for strict line management. Core values must be focussed — if they are too generic they are too weak. They must define what the organisation will tolerate. Lencioni puts this succinctly: If an organisation tolerates everything, its stands for nothing.

What do we do?
This question is the simplest of the six and if you can’t answer it then I hold no hope for your company. What is needed is a simple description of what you actually do. No adjectives. No abstract. Just fact.

How will we succeed?
In answering this question we are determining our strategy. The answer must be a collection of intentional decisions that a company makes to give itself the best chance to thrive and differentiate from competitors. By listing everything of imaginable importance to our business then grouping these into collective sets (what Lencioni calls strategic anchors), we should be able to identify the three most critical actions or focuses of our strategy.

What is most important, right now?
Most organisations have too many top priorities which stop them achieving the best results. By focussing on too much, less is gained and staff are pulled in multiple directions. To create a sense of alignment and focus, an organisation must have a single top priority within a given period of time. How can we identify the answer? Ask yourself: what must be true in X months from now for us to be able to look back and say with any credibility that we had a good period?

Who must do what?
Every organisation of any size needs division of labour. Without such clarity the potential for politics and infighting is great. Members of the leadership team need to understand each other’s roles and responsibilities. They must be comfortable asking questions about each other’s work. Further, this needs to be clearly and concisely summarised and regularly referenced and reviewed.

Lesson 4: Over-communicating Clarity

After clarity and alignment have been achieved, the key focus is communication. The key point is this: people will only believe what they are being told after they have heard it consistently over time. A leader calling out to an audience from a platform may stimulate in the immediate term but it is unlikely that the message will stick unless it is heard in a variety of different situations and from different people.

Much of what sticks in an organisation is water-cooler rumour. Leaders are advised to go out and tell “true rumours” using “cascading communication”. Cascading communication rolls the key messages down through the organisation from the leadership team. It provides a great opportunity for employees to hear the same message from all parts and the more we hear, the more we believe.

What we must do however, is to help communicators put the message into their own words, so our own messages must be clear and understandable. If not, we run the risk of corporate whispers and mis-alignment of activities.

Lesson 5: Reinforce Clarity

In order to ensure that common alignment is embedded, we need to make sure it influences every human-system in our organisation. What is a human-system? Human systems give an organisation a structure for tying together its operations, culture and management even when leaders are not around to remind people. How we hire, how we fire, how we measure performance, how we reward performance, how we train, and how we compensate must all reflect the alignment framework. Here are a few examples. Hiring without clear and strict criteria for cultural fit hampers the potential for organisational success.

When employees get the opportunity to hear their leaders talk about why the organisation exists and what behavioural values were used to select them during the hiring process, they can immediately see how they can contribute.

Healthy organisations believe that performance management is about eliminating confusion. They realise their employees want to succeed and the best way is to give them clear directions. Compensation and reward programmes are designed to remind employees what is important and they are being rewarded for behaving in the expected way.

In conclusion, the power of organisational health is undeniable yet untapped. Early adopters will reap the advantages and create even greater differentiation from their competitors. Clarity and alignment...are you in?