Book Notes: The Advantage

The Advantage: Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni
My rating: 4 of 5 stars

The three biases:

  1. Sophistication – people think that solutions need to be complex, but in reality the solution is simple
  2. Adrenaline – people like to rush, instead you need to slow down and deal with important but not urgent issues
  3. Qualification – overly analytical leaders feel they need to quantify everything, where as the reality is that success is the compound of many small things multiplied up

Smart and Healthy

SmartHealthy
Good at:
strategy
marketing,
finance
and technology
With:
Minimal policies,
low confusion,
high moral,
strong productivity
and low turn over amongst good employees

Being smart is permission to play, a healthy organisation will get smarter over time.

The four disciplines:

  1. Building a cohesive leadership team – the people at the top are not behaving cohesively in the five fundamental ways
  2. Create clarity – leaders must be intellectually aligned and committed to the same six critical questions
  3. Overcommunicate clarity – communicate clearly, repeatedly, enthusiastically and repeatedly
  4. Reinforce clarity – every policy, program, activity etc should be designed to reinforce what is important

Building a cohesive leadership team

  • A small group of people, over 8 is problematic and never over 12.
    • Larger groups advocate for their own case
    • Advocating is common but dangerous
    • Inquiring is rarer and more important
  • A team has collective responsibility – selflessness and shared sacrifices
  • Common Objectives – most measures should be collective
  • Behaviours
    • Building vulnerability-based trust – being completely comfortable being transparent, honest and naked with one another. Happy to say “I screwed up”, “I need help”, “your idea is better than mine”
    • Mastering conflict – when there is trust conflict becomes nothing but the pursuit of truth, an attempt to find the best answer. Conflict will be uncomfortable, and it must be leaned into to the point of constructive conflict but not beyond.
    • Achieving commitment – when leadership teams wait for consensus before taking action, they usually end up with decisions that are made too late and are mildly disagreeable to everyone. This is a recipe for mediocrity and frustration. Teams must have the discipline to review their commitments and clarify anything which is not crystal clear.
    • Embrace accountability – peer accountability is the primary and most effective source of accountability on a leadership team. Leaders need to confront difficult situations and hold people accountable so others follow suit. To hold someone accountable is to care about them enough to risk having them blame you for pointing out their deficiencies. This is especially important for behaviours.
    • Focusing on results – an organisation must meet it’s results to be a good team. To do this the team needs one score and that should be more important than individual scores.

Create Clarity

  • Why do we exist?
    • Customer – to directly serve the needs of an organisation’s customer or primary constituent.
    • Industry – to be immersed in a given industry
    • Greater cause – the company plays a role in a greater purpose
    • Community – to make a specific area better or group of people supported
    • Employees – to be a great place for people to work
    • Wealth – to make the owner wealthy
    • Two similar companies can act very differently if their reason to exist are different
  • How do we behave?
    • Core values – a very small number of traits that are fundamental and long held by the company
      • Is this trait inherent and natural for us and has it been present for a long time?
      • Would our organisation be able to credibly claim that we are more committed to this value than 99% of companies in our industry?
    • Aspirational values – characteristics the company wishes they already had
    • Permission-to-Play values – the minimum standards that are required in the organisation and usually common in the industry
    • Accidental values – these are evident but not not intentional
  • What do we do?
  • How will we succeed?
    • The company should make an exhaustive list of everything related to the bussiness. Then search for patterns within everything.
    • These need to be reviewed but the cadence is situation specific – where barriers are high and innovation low the they will last a long time, but where barriers are low and innovation is high these will likely not last very long and need regular review.
  • What is most important, right now?
    • One priority
    • Thematic Goal
      • One thing
      • Qualitative
      • Temporary
      • Shared across the leadership team
    • Defining objectives
      • These are the general categories of activities to achieve the thematic goal
    • Standard operating objectives
      • The day to day measures which people should be following
    • All the above on one page
  • Who must do what?
  • With all of the above – capture it but keep is short – one page, two at most. Then keep it to hand.

Overcommunicate clarity

  • Tell true rumours – it is the best way to get the word out
  • Consistent message
  • Timeliness of delivery, does not need to be the same time but within 24 hours
  • Live/real-time communication, not email as this is less effective
  • Ask the question “What are we going to tell our people?” to align on the key points of a message, not a wordsmithed to death script
  • Don’t get feedback if it is not going to be used.
  • Great organisations are never run by democracy.
  • Communication silos will exist as long as people want them to – how you communicate is irrelevant

Reinforce Clarity

  • An organisation has to institutionalise it’s culture without bureaucratising it
  • Your people are your culture so structured hiring is key
  • Onboarding is a memorable and impactful part of an employees life – make it count
  • Performance management, compensation and rewards – against the companies values
  • Recognition by authentic and specific expressions of appreciation
  • Keeping a relatively strong performer who is not a cultural fit sends a loud and clear message to employees that the organisation isn’t all that serious about what it says it believes

The Centrality of Great Meetings

  • “If someone were to offer me one single piece of evidence to evaluate the health of an organisation, I would want to observe the leadership team during a meeting.”
  • One meeting to cover everything – does not work. The human brain can not jump between things like this. There needs to be greater clarity and focus.
ContentMeetingTiming
AdministrativeDaily Check-In5-10 minutes most days
TacticalWeekly Staff45-90 minutes weekly
StrategicAdhoc Topical2-4 hours as needed
DevelopmentalOff-Site Review1-2 days quarterly
  • Tactical
    • Real-Time Agenda – deciding at the start what are the pressing topics
    • How are we doing against the things we said are most important?
  • Off-Site Review
    • Step back from the bussiness to get a fresh perspective
    • Review the organisation’s strategic anchors and thematic goal
    • Assessing the performance of key employees
    • Discuss industry changes and competitive threats
    • Review the team members in regards to cohesiveness

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