According to Patrick Lencioni, 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. Here are some lessons on how we can create that advantage.
Organisational Health 101
Lencioni believes that the single greatest advantage any company can achieve is organisational health. Organisational health is simple, free and available to anyone who wants it but too many leaders believe they are too sophisticated, too busy, or too analytical to bother with it. Let’s look at the benefits:
A healthy organisation is whole, consistent and complete. It’s 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.
Now, Lencioni suggest that in order to gain organisational health we need to follow four disciplines which are as follows:
Building a Cohesive Leadership Team
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.
The ultimate point of building greater trust, conflict, commitment and accountability is the achievement of results. 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.
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.
Lencioni states leaders need to give their employees clarity by answering six critical questions
- Why do we exist?
2. How do we behave?
3. What do we do?
4. How will we succeed?
5. What is most important, right now?
6. Who must do what?
In answering these questions, leaders will achieve what very few mission statements have provided employees—an accurate description of what their organisation does that supports clarity.
After clarity and alignment have been achieved, the key focus is communication. The key point is that people will only believe what they are being told after they have heard it consistently over time.
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
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.
In order to ensure that common alignment is embedded, we need to make sure it influences every human-system in our organisation. Human systems give an organisation a structure for tying together its operations, culture and management even when leaders are not around to remind people.
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.
The power of organisational health is undeniable yet untapped by so many. Those who take advantage will reap the benefits and create even greater differentiation from their competitors.