At The Global Leadership Summit, Patrick M. Lencioni discussed the the benefits of focusing on organizational health. Here are a few of his observations:

Organization health is the single greatest competitive advantage in business. It is virtually free and accessibly to any leader that want its. Yet it remains virtually untapped. Most leaders haven’t been trained in it. They often feel it is hard to measure or doesn’t feel complex enough.

When Southwest Airlines as asked why competitors don’t copy them, the CEO responded saying that they think it is beneath them.

2 Qualities Needed to Maximize Success

1. Smarts (financing strategy, technology, marketing, intellectual sciences)

  • #1 currently gets 98% of attentions, but it should be closer to 50%.
  • It is almost impossible to distinguish your company based solely on smarts.
  • I’ve never found a company where the executives weren’t intelligent.
  • In fact, they usually have more than enough domain knowledge and expertise.

2. Health (minimal politics, minimal confusion, high moral, high productivity, low turnover)

  • These 5 things allow you to leverage the intelligence of your entire company. Not just it’s leaders.

4 Disciplines of Organizational Health

1. Build a Cohesive Leaderships Team

  • Results
  • Accountability
  • Commitment
  • Conflict
  • Trust

2. Create Clarity

  • Intellectually aligned
  • Mission statements (most don’t work)
  • 6 critical questions
    • Why do we exist? (core purpose)
    • How do we behave?
    • What do we actually do?
    • Who will we succeed?
    • What is most important, right now? (rally cry)
    • Who must do what?

If we can answer these 6 questions, we create clarity in our organizations. They pave the way for empowerment in its true sense of the word.

3. Over-Communicate Clarity

  • If your staff can’t do a good imitation of you when you’re not around, you’re not communicating enough.
  • Don’t be the husband that fails to tell his wife he loves her because, “I already told you that when we got married.”

4. Reinforce Clarity

  • Corporate decisions should constantly enforce them.
  • Don’t punish people for trying to carry these out.
  • You can correct and redirect, but people shouldn’t be afraid to make decisions.
  • Make hard decisions to let people go (employee or customer) if they aren’t a good fit.

A closer look at a few of these questions.

Why do we exist?

  • Every org has to know why it is there. This can be different than what you do.
  • Southwest: “Democratizing travel in America.” Human beings should be able to travel, even if they don’t have a lot of money.
  • Defining this is more than just something you put on a wall or a t-shirt. It has to affect decisions.

How do we behave?

  • Value statements are usually pretty generic, and cover just about everything.
  • Need to get this down to the one or two (maybe 3) key things.
  • Have to avoid confusing them with other values.
  • Not aspirational values. One of Enron’s core values was integrity.
  • A core value is something you are willing to stand up for even if you get punished (may not benefit you financially).
  • Southwest’s value is sense of humor (“fun loving spirit”). When someone asks them to violate a core value, Southwest famously responded, “We’ll miss you.”
  • Don’t sell your soul. One test is if you can make a desion based on a core value even if you know it won’t benefit you financially.
  • Note: You can take a core value too far, but when this happens redirect rather than focus on harsh punishment.
  • Not permission to play standards. These are minimum standards. If you’re going to work here, you should believe…, you shouldn’t cheat on your taxes, etc.

How will we succeed?

What is the most actionable definition of strategy? It is this: The myriad of intentional decision you make that give you a chance to succeed and differentiate you from your competitors. This then means that every decision you make can be viewed through this lens.

What are your 2-3 strategic anchors? 

One day organization health may be the standard. Until then, this is a huge opportunity for competitive advantage.

Re-printed from Notes by Kent Shaffer. Used by permission. 

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