In smartness and in health
Daniel Wain seeks the elixir of organisational health from Patrick Lencioni
'Don't work harder, work smarter' had become something of a management mantra even before the economic downturn. Today, it's arguably an overworked, possibly even tarnished, cliché. Certainly, according to Patrick Lencioni, being smart is no longer enough, if it ever was. For Lencioni, businesses need to be healthy.
"Organisational health will surpass all other business disciplines," he believes, "as the greatest opportunity for competitive advantage. As competition intensifies, most companies try to get smarter: they ramp up innovation, update their strategy or acquire new talent. However, a few humble underdogs are outperforming some of today's 'smartest companies' by freeing themselves from the shackles of dysfunction and mastering organisational health."
For Lencioni, there is a clear distinction between 'smart' and 'healthy' organisations. As founder and president of US consulting firm The Table Group, he boasts more than two decades' experience working with companies to help build the latter. "Smart organisations," he feels, "are good at developing and managing the intellectual elements of a successful business: technology, finance, marketing, and so on." Indeed, by Lencioni's definition, the vast majority of companies today have more than enough intelligence, experience and knowledge to be successful.
What differentiates a 'healthy' organisation, he says, is when "it is consistent and complete, when its management, operations, strategy and culture fit together and make sense". Signs of a healthy organisation are minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.
According to Lencioni, healthy organisations tap into their internal intelligence more than merely smart ones, as well as retaining more of it: "Good people rarely leave a healthy organisation." This then, he believes, has a positive, causal impact upon competitive advantage and the bottom line. In short, organisational health isn't just an altruistic 'nice-to-achieve-if-you-have-the-time' but a commercial and financial imperative.
It is this belief that runs through Lencioni's tenth, and latest, book The Advantage: Why Organizational Health Trumps Everything Else in Business. It's billed as "the culmination of his full body of work", which includes such intriguingly titled best-sellers as Death by Meeting and The Three Signs of a Miserable Job. Together, they have sold nearly three million copies and been translated into 20 different languages.
If Lencioni is right, organisational health should be the concern not only of an organisation' s top team but of its L&D department too. "Ultimately," he says, "the buck has to stop with the CEO but the L&D director becomes the second most important person in the organisation." It is L&D's responsibility to, first (if need be) convince the CEO and board of the crucial importance of achieving organisational health and then, second, to put in place practical, tangible means of doing so.
For Lencioni, building a healthy culture is about behaviour, not process, and it is in supporting changes in the former, throughout the organisation, that L&D plays a key role. He clearly sees an organisation's health as much determined by the everyday, tactical ways in which employees interact and communicate as by the more strategic direction provided by the leadership team.
'Internal politics' is an obvious bugbear: departments working at cross-purposes, people spending too long in boring meetings or fighting their own corner - all indicators of a lack of both trust and focus. "Every CEO says 'this kills us'," Lencioni explains, "but few do anything about it." The reason for this, he believes, is that "organisational health isn't sexy nor is it easy to achieve or quantify. It's tough and hard to measure, so the average CEO focuses instead on tweaking the finances or the marketing, usually to very little effect".
According to Lencioni, it's equally important for an organisation to be both 'smart' and 'healthy', but many facets of the latter could be seen as vague and incalculable. That said, he points to a variety of metrics that can be used to measure an organisation's health, including employee turnover, client satisfaction, referrals and recommendations from both, and repeat business. Indeed, far from being a nebulous concept, Lencioni believes that clarity lies at the heart of organisational health and that, again, L&D plays a fundamental role in communicating and reinforcing that clarity.
This leads us to the four disciplines that Lencioni says define a healthy organisation:
- building a cohesive leadership team
- creating clarity
- over-communicating clarity
- reinforcing clarity.
Lencioni admits that the process can be messy and non-linear, "just like building a strong marriage or family", but emphasises that these core disciplines all need to be in place and in sequence to achieve organisational health. They also need to be consciously and deliberately developed and implemented from the top down. Indeed, for Lencioni, leading these disciplines is the only responsibility, unlike (for example) marketing or finance, that a CEO should never delegate to others.
The first discipline sees the top team agreeing to work together for the collective good and avoiding corrosive internal politics. This requires trust in each other and a commitment to making, and then supporting, collectively agreed decisions. "If an organisation doesn't have this first discipline in place," says Lencioni, "it can't move on to the other three. An organisation simply cannot be healthy if the people chartered with running it aren't behaviourally cohesive. In any organisation, dysfunction at the top inevitably leads to a lack of health throughout." Although the CEO must be ultimately responsible for ensuring this first discipline is in place, there might also be an important supporting or facilitative role for L&D to play here.
Lencioni's second discipline is "creating clarity": the leadership team intellectually aligned and committed to the same answers to six simple, yet critical, questions. "There can be no daylight between leaders around these fundamental issues," he asserts. "Any confusion will hit those below but, where there is true senior level alignment, it makes it much more difficult to fail."
The first of the six questions is deceptively easy: why do we exist? It's important not to be either deliberately unique or clever, but to agree upon an answer that is true and instinctive at a gut level. Lencioni cites the example of Southwest Airlines, whose leadership's answer to this question is that they believe that travel should be democratised and available to all. "Once you've got clarity on this fundamental point, it's much easier to then measure all your future actions and decisions against it, ensuring consistency in all you do."
Having got clarity on the answer to question number one, the second is how do we behave? or rather, as Lencioni puts it, "what are the behavioural values that we will never violate?" He believes an organisation does not need, indeed shouldn't have, more than a few of these, as they need to be specific to, and meaningful for, it. They should also be true and lived, rather than aspirational. Southwest has only three values, says Lencioni, one of which is that all its people must have a sense of humour. "It doesn't recruit those who don't have one, and is willing to suffer as a result by losing good people. However, it gains by not diluting its culture, as all its hires instinctively fit."
Lencioni's third 'clarity' question is arguably the easiest and most practical to answer, if the least interesting: what do we do? "Unlike the first two," he explains, "this answer must be very practical and non-idealistic." So why you exist might be to alleviate pain and suffering, but what you actually do could be anything from offering your services as a self-employed masseur to inventing new drugs as a global pharmaceutical company.
The answers to each of the first three questions might not be unique but Lencioni believes that the combination of all three might well be. In addition, having the answers to all three will have a huge impact on the skills, knowledge and behaviours that the L&D function focuses upon developing and reinforcing.
Of similar importance to L&D are the answers to the final three clarity questions. First, how will we succeed? For Lencioni, "unique decisions on specific, tangible actions help to ensure success. Southwest focuses on being on time, and not being all things to all people. It then empowers its employees to take their own actions and make their own decisions based upon these strategic priorities". Therefore its procurement team, for simplicity's sake, decided to only buy one type of plane, while its logistics people decided against seat assignments and studied Grand Prix pit crews to see how they minimised 'downtime'.
The answer to the fifth question should also provide L&D with clarity of focus: what is most important right now? Here Lencioni is an advocate of the 'less is more' approach: "Don't have a long list of metrics, saying you need to get better at everything. Instead, have a clear rallying call to ensure all are aligned to the top priority. For example, 'if in the next six months, we haven' t increased market share, we'll have failed to achieve what's most important to us now'. It's tactical, practical and overcomes the most cynical sceptics."
His final question is simply, given the answers to the other five, who is now going to do what? Again, it seems equally clear, once the decisions have been made, how L&D owns much of the responsibility for enabling the different parties to fulfil their agreed roles.
If L&D has acted only as a supporting player to the CEO's Hamlet during the first two disciplines of organisational health (building a cohesive leadership team and creating clarity), it most certainly takes centre-stage for the final two: over-communicating and reinforcing that clarity.
The answers to the six clarity questions can, and should, be capable of condensing into what advertisers call the 'elevator pitch': a one-page summary of the key messages. Lencioni sees L&D playing a crucial role in over-communicating that pitch, "clearly, repeatedly, enthusiastically and repeatedly" (and that's not a typo). "When it comes to reinforcing clarity," he says, "there's no such thing as too much communication, but keep the message simple and focused." He believes that L&D needs to provide the forums and opportunities, ideally face-to-face and informal, for the business to spread the word or, as he puts it, "to tell true rumours". The aim is that everyone within, and even outside, the organisation hears it and understands it.
This then leads to the fourth and final of Lencioni's disciplines for organisational health: reinforcing the clarity. "The organisation needs to remain healthy over time so the clarity needs to be built into the company infrastructure, into every process that involves your people, but in a simple, non-bureaucratic way. Every policy, programme or activity, including those owned by L&D, should be designed to remind your employees what's really important." L&D needs to balance, he believes, education (showing people why it's crucial to master these "game-changing behaviours") and facilitation (helping them to develop them).
Lencioni's own background is in organisational development, as VP for the function at the software company Sybase. He also worked for both Oracle and Bain & Company. Since founding The Table Group, his clients have included a mix of Fortune 500 companies, professional sports organisations, non-profit organisations, universities, churches and the US Military Academy at West Point. As well as being a sought-after trainer and public speaker, he has written for the likes of the Wall Street Journal and the New York Times.
The book that first brought him to international notice was The Five Dysfunctions of a Team, which continues to be a weekly fixture on US bestseller lists. It clearly acts as the foundation stone for Lencioni's current work on building the healthy organisation, and again proves useful reading for L&D professionals.
Its primary tenet is that business success is not about strategy or structure but culture and behaviour, which has to be owned and driven by the executive team. "First, you need to build trust between the senior leaders," says Lencioni. "They have to be able to admit mistakes and vulnerabilities, to ask for help when they need it, to apologise and acknowledge when others are in the right. Fundamentally, it's about humility."
Second, perhaps surprisingly, Lencioni believes that the exec team needs to learn "how to have good conflict, to passionately disagree so as to then make the best decisions". However, once decisions have emerged from the crucible of conflict, each of the senior team needs to commit to them even if personally he still disagrees. Lencioni quotes the Intel mantra "disagree and commit".
The next, and arguably most challenging, step is for all of the team members to hold each other accountable for doing what they personally have committed to, even if this means confronting others on behaviour that is getting in the way of achieving it. The final piece to the jigsaw, says Lencioni, is focusing on collective, rather than individual, results, which do not necessarily need to be financial. Again he is quick to dismiss any accusation of being 'touchy-feely': "You're not asking do we feel like a good team? but rather have we achieved our common goal, done what we said we would do?"
While in most organisations L&D's involvement in this process might be fairly limited, there is much greater scope for making a real difference further down the line. Indeed, Lencioni believes that the key to achieving true employee engagement (currently as big an issue in the US as it remains in the UK) is the line managers and how they, in turn, are supported and developed.
His research has shown that all employees need three fundamental things "in order to be happy and to do their job", and all three are within the gift of their line manager. First, managers must show real interest in their direct reports as both employees and human beings. Second, managers must help employees to understand why their job is relevant, why it and they matter, and to constantly reinforce the impact that they have on the business and its stakeholders. Last, managers need to give their people ways to measure if and when they are doing a good job, so that they can see tangible evidence of making a difference.
Fundamentally, individual health is crucial to organisational health, and healthy organisations have managers who ensure the former. However, they first need to understand that this is expected of them and trained, coached or mentored to then deliver it. Again, this is clearly where L&D comes in. If individual people managers are not supported in constantly reinforcing the behaviours agreed by the senior team, the longer-term health of the organisation remains in doubt.
All of Lencioni's writing to date, with the exception of his latest, he describes as "business fiction", as it makes considerable use of fables and fictional characters to convey the main models and messages. This owes much to his earlier days as an amateur screenwriter. Lencioni feels The Advantage is too complex a narrative for this approach.
However, as the musician Charlie Mingus once said, "anyone can make the simple complicated. Creativity is making the complicated simple". And, perhaps thankfully, for a book that so advocates clarity, Lencioni's story of how to achieve organisational health is crystal clear. The role of L&D in affecting its happy ending is possibly more opaque. It is, though, almost certainly dependent upon the specific organisation and the health of L&D's role within it.
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