The single greatest advantage any company can achieve is organizational health, and yet it is ignored by most leaders even though it is simple, free, and available to anyone who wants it, according to Patrick Lencioni in his book The Advantage: Why Organizational Health Trumps Everything Else in Business. The health of an organization provides the context for strategy, finance, marketing, technology, and everything else that happens within it.
Healthy organizations are ones in which there are minimal politics, minimal confusion, high morale, high productivity, and low turnover. The author’s model of organizational health involves four steps: build a cohesive leadership team, create clarity, overcommunicate clarity, and reinforce clarity. At first glance this looks like just two steps, with the second being repeated two times, but in reality the step of creating clarity is about the leadership team defining what the organization stands for, the step of overcommunicating clarity is about ensuring that everyone in the organization understands what the organization stands for, and the step of reinforcing clarity is about applying the agreed organizational philosophy to recruiting and performance management.
A key aspect of organizational health involves having a cohesive leadership team. Members of the leadership team need to trust each other while at the same time engaging in appropriate levels of conflict. All members of the team need to commit to the team’s decisions, and they need to focus on results and hold each other accountable. To be effective, most teams are likely to require more meetings rather than less, but these meetings need to be engaging and productive.
Although the author’s ideas of “creating clarity” bear some resemblance to aspects of conventional strategic planning, they focus more on the people-related issues rather than on strategy and positioning. Most leaders of organizations assume that if they get the strategy right, everybody will just fall into line and harmony and prosperity will result. The author makes a convincing argument for why it is critically important to address the people and behavioural issues as well as the strategy issues, although in my view he has not actually proved that organizational health is the “single greatest advantage any company can achieve”. Some highly successful companies appear to have poor organizational health.
In my opinion this is a very useful book and I highly recommend it to any leaders interested in achieving greater organizational success and making their workplaces more fulfilling for employees.