Why Organizational Health Trumps Everything Else In Business?
Why Organizational Health Trumps Everything Else In Business?
(Dan Schawbel, Contributor)
Opinions expressed by Forbes Contributors are their own.
I recently caught up with Patrick Lencioni, who is the author of ten business books including the new release, The Advantege: Why Organizational Health Trumps Everything Else in Business.
After several years in print, his book The Five Dysfunctions of a Team continues to be a fixture on national best-seller lists. He is the founder and president of The Table Group, a management consulting firm focused on organizational health. The Wall Street Journal has named Lencioni one of the most in-demand business speakers. As a consultant and speaker, he has worked with thousands of senior executives in organizations ranging from Fortune 500 corporations and professional sports teams to universities and nonprofits, including Southwest Airlines and General Mills.
What inspired you to write “The Advantage” and how is it different than your previous books?
I have been interested in organizational health since I was a child, though I certainly did not know it at the time. I remember hearing my dad talk about the illogical and problematic things that management in his company did, and it bothered me. Later, when I started working in a strategic management consulting firm, I quickly came to the conclusion that dysfunction prevented our clients from implementing our recommendations within their organizations, and so I decided that I would refocus my career to address those issues. Since then, I have been fascinated by how much an organization can grow and succeed, and differentiate itself from competitors, if it becomes healthier.
Unlike my other books, The Advantage is not written as a fable because the nature of the subject it covers is just too broad to fit into one story. In the past, I’ve taken on slightly more contained and limited issues – teamwork, meetings, employee engagement – but this time I’m taking a much more holistic, comprehensive approach to improving organizations. Still, I’ve used stories about real organizations to bring the points to life, and I’m hoping that readers enjoy those stories and find them helpful in learning and applying the principles.
Why do you think that information and innovation aren’t competitive advantages anymore?
In this age of informational ubiquity and nano-second change, it is no longer enough to build competitive advantage based on intelligence alone. Organizational health provides a foundational construct for maximizing human potential and aligning an organization around common objectives. The seminal difference between successful companies and mediocre ones has less to do with what they know and how smart they are and more to do with how healthy they are.
Can you name three reasons why an organizations “health” can make you more successful?
To start, healthy organizations are void of politics and confusion. This allows people, beginning with the leader, to learn from one another, identify critical issues and recover quickly from mistakes. Healthy organizations cycle through problems and rally around solutions much faster than their dysfunctional and political rivals. This advantage occurs because “health” has a few distinctive qualities that promote sustainable success. They include:
1. Health Begets Intelligence. An organization that is healthy will eventually get smarter over time. This is true because members of a healthy organization learn from one another, identify critical issues, and quickly recover from their mistakes. They cycle through problems faster without politics and confusion. Smarter companies don’t seem to get healthier by their intelligence. In fact, it may get in the way because leaders who primed themselves on intelligence often struggle to acknowledge their flaws and learn from peers. They aren’t as open and transparent with one another, which delays recovery from mistakes and fuels politics. A healthy organization learns from its mistakes, handles critical issues with confidence and continues to grow and get more effective.
2. The Multiplier Effect. Addressing organizational health provides an incredible advantage to companies because ultimately health becomes the multiplier of intelligence. The healthier an organization is, the more of its intelligence it is able to tap into and actually use. Most organizations only exploit a fraction of the knowledge, experience and intellectual capital available to them. The healthy ones tap into all of it. A healthy organization as a whole is greater than it the sum of its parts because of this multiplier.
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3. Guiding Principles. By taking the steps to become healthy, the organization must become aligned around the six critical questions fundamental to any business. The answers to the six questions provide all employees clarity and confidence to behave and act in the organizations best interest because all employees know who they, what they are trying to accomplish and how to go about it. (According to Lencioni, these crucial six questions are:
Why do we exist? How do we behave? What do we do? How will we succeed? What is most important-right now? Who must do what? MM)
How do you evaluate an organization’s health?
If someone were to offer me one single piece of evidence to evaluate the health of an organization, I would not ask to see its financial statements, review its product line, or even talk to its employees or customers; I would want to observe the leadership team during a meeting. This is where values are established, discussed, and lived and where decisions around strategy and tactics are vetted, made, and reviewed. Bad meetings are the birthplace of unhealthy organizations, and good meetings are the origin of cohesion, clarity, and communication.
Can you name any of the healthy organizations that you cited in your new book?
Many of the healthy companies cited in the book are not famous ones. They are small or medium sized organizations being led by humble leaders who are accomplishing great things quietly, to the delight of customers and employees like. For those interested in a name brand, Southwest Airlines is a particularly healthy one cited in the book throughout. I’ve had the opportunity to work with Southwest’s executive team, and they embody health in just about everything they do, from the executive suite on down.
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"We commissioned Concordia to develop a program that would, instead of developing general leadership skills, refresh the existing leadership skills set of our team of leaders with decades of experience, and thereby endow them with a healthier leadership approach and skills that are also well suited for managing current leadership challenges. The 18-month program was made all the more exciting by the fact that the company was transferred to new ownership before the program was completed. Building on their existing leadership experience Concordia managed to fully involve our managers in the program, and to reform the corporate leadership credo by focusing on questions and issued already brought to the surface by the changing environment. The program left ample space for the topics and situations suggested by the participants, and Concordia managed to maintain all frameworks and close off individual sections as required by the overall objective, regardless of the degree of emotional involvement.
All in all it was a well thought out, comprehensive program. We would especially like to thank Mr. Tamás Szilágyi who, by virtue of his calmness and coaching techniques, sometimes provided support for the organisers, too."