Book Summary – The Advantage: Why Organizational Health Trumps Everything Else In Business
Organizational health refers to how well an institution’s components (e.g. strategy, culture, management, operations) fit together so it can function consistently as a whole. In this book, Patrick Lencioni presents 4 disciplines which can be used by business leaders to improve organizational health and build a strong foundation for success.
In this article, we’ll give an overview of the case for organizational health, and the 4 disciplines to build it. For the full details, examples and tips, do get a copy of the book, or get a detailed overview with our complete book summary bundle.
Organizational health is like the glue that holds the parts of an organization together. A healthy organization enjoys high morale and productivity, while an unhealthy organization is plagued by politics, confusion and staff turnover.
Almost any leader will agree that organizational health is vital for success. Yet, leaders tend to focus on other areas such as skills development and strategies for marketing, finance or technology, or get so caught up with fire-fighting and urgent projects that they don’t make time for what’s important but less urgent.
Based on 20 years of business consulting experience, Lencioni found that there are 4 core disciplines which are proven to reliably improve organizational health. We’ll now briefly explain each of the 4 disciplines. Do refer to the book or our full 16-page book summary for more details, examples and tips.
Close-knit leaders are the first step to building a healthy organization. A good leadership team should be small (3-10 people), with 5 core ingredients: Trust, constructive conflict, commitment, accountability and results.
In the book /our full summary we elaborate on each of these 5 components and how to build them. [One of Lencioni’s earlier books, Overcoming the Five Dysfunctions of a Team, focuses exclusively on these 5 components]. In essence:
• Build trust. In a cohesive team, members are so comfortable with one another that they are willing to be vulnerable. There’s no need to hide mistakes or weaknesses. Instead, members can openly admit if they’ve screwed up or need help. This frees people up to focus fully on contributing to the team objectives. In the book / full summary we elaborate on exercises/tools that you can use to build trust.
• Master conflict, such that team members can have constructive and passionate debates on important issues and agree to disagree. In the book / full summary we look at the ideal level of conflict and how to help people overcome their natural aversion to conflict.
• Achieve commitment. Without commitment, people may smile and nod on the surface, but do little to support the decision. In the book / full summary we look at how to establish a common understanding and commitment in the team.
• Embrace accountability. For a team to achieve its goals, every member must be held accountable for the decisions made. In the book / full summary we look at what it means for leaders and team members to one another accountable for both behaviors and results.
• Focus on Results. There are many distractions—such as ego, personal career, or budgets—that keep team members from focusing on results. With the 4 preceding components, it’ll be easier to overcome such distractions to focus on results.
Without clarity, there can be no alignment. Lencioni presents 6 key questions which can be used by any leadership team to gain greater clarity. In the book / complete 16-page summary we zoom in on each question in detail. In a nutshell, the 6 questions are:• Question 1: Why do we exist? This question addresses a company’s core purpose or its reason for existence. In the book / full summary we explain how the core purpose is different from a marketing slogan, the key categories of core purpose and the questions to ask to define your core purpose.
• Question 2: How do we behave? Your company’s core values define your personality, and this question addresses how your values should be brought to life. In the book / full summary we explain the differences between core values, aspirational values, permission-to-play values and accidental values, and the 3-step process you can use to identify your core values in a meaningful way that shapes behavior.
• Question 3: What do we do? This question delivers your business definition–a one-sentence, concrete and straightforward description of what you do.
• Question 4: How will we succeed? The question helps you to define your strategy, which is essentially your plan for success, or the sum of all your deliberate decisions to improve your competitive position. In the book / full summary we explain how to analyze and distill your key strategy components down to 3 strategic anchors that can be used to guide every decision in the company.
• Question 5: What is the most important, right now? At any point in time, there should be only 1 top priority to align the entire company. In the book / full summary we explain how to identify your “thematic goal” or top priority, then break it down into your “defining objectives” and “standard operating objectives”.
• Question 6: Who must do what? Building on the answers from Question 5, leaders must now define who to do what, in order to achieve those goals.
The answers for the questions above (including your purpose, desired behaviors, business definition, strategies and short-term priority) should be summarized on one page if possible, and no more than a few pages. This becomes your company’s playbook, which should be made visible and used for all communications, decision-making, planning throughout the organization.
With Disciplines 1 and 2, leaders are now cohesive, clear, and ready to communicate the playbook answers to the rest of the organization. In the book and our complete summary, we look at how cascade your communication effectively to meet 3 key criteria: consistency, timeliness and interactive.
To ensure that the answers to the 6 questions are ingrained in the organization, leaders must encode them into every human system, i.e. processes that involve people. The book ends off with detailed examples of common human systems in organizations and what it could mean to build your playbook answers into every key system, such as recruiting and hiring, orientation, performance management, compensation/rewards and firing decisions. You can get a detailed overview with our complete 16-page summary.
Meetings are vital to any organization—good meetings deliver clarity and alignment while bad meetings are wasteful and frustrating. In his earlier book, Death by Meeting, Lencioni explained (via a fable) 4 types of meetings that any healthy organization should have: daily check-ins, weekly tactical meetings, monthly/ad-hoc topical meetings, and quarterly off-site reviews. These 4 meetings are outlined in this book/summary as vital tools for implementing the 4 disciplines of a healthy organization.
CAPTURING THE ADVANTAGE
Building organizational health takes time and lots of hard work. However, the results are well worth the effort. The top leader—be it the CEO or business owner—must be fully committed and willing to drive the process.
This is a practical guidebook which includes many short examples and client stories to illustrate the ideas, including checklists for each of the 4 disciplines for organizational health. For more details and resources, please visit www.tablegroup.com, or get a copy of the book or our full summary bundle.
Gain a real advantage by building a healthy organization!
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