The Advantage Why Organizational Health Trumps Everything Else In Business. By: Patrick Lencioni

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1 The Advantage Why Organizational Health Trumps Everything Else In Business By: Patrick Lencioni Book Description (from Amazon) Publication Date: March 13, 2012 There is a competitive advantage out there, arguably more powerful than any other. Is it superior strategy? Faster innovation? Smarter employees? No, New York Times best-selling author, Patrick Lencioni, argues that the seminal difference between successful companies and mediocre ones has little to do with what they know and how smart they are and more to do with how healthy they are. In this book, Lencioni brings together his vast experience and many of the themes cultivated in his other best-selling books and delivers a first: a cohesive and comprehensive exploration of the unique advantage organizational health provides. Simply put, an organization is healthy when it is whole, consistent and complete, when its management, operations and culture are unified. Healthy organizations outperform their counterparts, are free of politics and confusion and provide an environment where star performers never want to leave. Lencioni s first non-fiction book provides leaders with a groundbreaking, approachable model for achieving organizational health complete with stories, tips and anecdotes from his experiences consulting to some of the nation s leading organizations. In this age of informational ubiquity and nano-second change, it is no longer enough to build a competitive advantage based on intelligence alone. The Advantage provides a foundational construct for conducting business in a new way one that maximizes human potential and aligns the organization around a common set of principles.

2 My Synopsis: Lencioni s first book that isn t a fable, he shares his wealth of experience to give insight straight-forward on how important the culture of a company truly is to the bottom line. He imparts the truth that while improving the culture of the company over the short-term doesn t bring the noticeable bottom line results at first, the true payoff comes in the long-term results that are gained, and not just in the dollars and cents. The Advantage Why Organizational Health Trumps Everything Else In Business p.1 The single greatest advantage any company can achieve is organization health. p.3...they're afraid to slow down and deal with issues that are critical but don't seem particularly urgent. p.4...you have to slow down in order to go first. p.5...any organization that really wants to maximize its success...must be smart, and it must be healthy. p.6 Two Requirements for Success Smart Strategy Marketing Finance Technology Healthy Minimal Politics Minimal Confusion High Morale High Productivity Low Turnover p.7 Most leaders prefer to look for answers where the light is better, where they are more comfortable. p.7 Unfortunately, the opportunities for improvement and competitive advantage they find in those areas (smart) are incremental and fleeting at best. p.8...it's harder than it has ever been in history to maintain a competitive advantage based on intelligence or knowledge. p.8...being smart as critical as it is has become something of a commodity. p.9 An organization that is healthy will inevitably get smarter over time. p.9...people in a healthy organization, beginning with the leaders, learn from one another, identify critical issues and recover quickly from mistakes.

3 p.11 Most organizations exploit only a fraction of the knowledge, experience, and intellectual capital that is available to them. But the healthy ones tap into almost all of it. p.13 The financial cost of having an unhealthy organization is undeniable: wasted resources and time, decreased productivity, increased employee turnover, and customer attrition. p.13 People who work in unhealthy organizations eventually come to see work as drudgery. p.13 Turning an unhealthy company into a healthy one will not only create a massive competitive advantage and improved bottom line, it will also make a real difference in the lives of the people who work there. p.15 Discipline #1: Build a cohesive leadership team Discipline #2: Create clarity Discipline #3: Overcommunicate clarity Discipline #4: Reinforce clarity p.16 Every policy, every program, every activity should be designed to remind employees what is really most important. p.19 If an organization is led by a team that is not behaviorally unified, there is no chance that it will become healthy. p.20 Few organizations invest nearly enough time and energy in making their leadership teams cohesive. p.21 A leadership team is a small group of people who are collectively responsible for achieving a common objective for their organization. p.24 The only reason that a person should be on a team is that she represents a key part of the organization or brings truly critical talent or insight to the table. p.24 It amazes me that intelligent people will sacrifice the effectiveness and manageability of their team for a tactical victory. p.26 No one on a cohesive team can say, Well, I did my job. Our failure isn't my fault. p.26...leadership team members must see their goals as collective and shared when it comes to managing the top priorities of the greater organization. p.26 When leaders preach teamwork but exclusively reward individual achievement, they are confusing their people and creating an obstacle to true team behavior. p.26 Five behavioral principles that every team must embrace: trust, conflict, commitment, accountability, results. p.27 Members of a truly cohesive team must trust one another. p.27 At the heart of vulnerability lies the willingness of people to abandon their pride and their fear, to sacrifice their egos for the collective goal of the team. p.31 When members of a leadership team willingly acknowledge their weaknesses to one another, they give their peers tacit permission to call them on those weaknesses. p.35 The only way for teams to build real trust is for team members to come clean about who they are, warts and all. p.37 The only way for the leaders of a team to create a safe environment for his team members to be vulnerable is by stepping up and doing something that feels unsafe and uncomfortable first. p.38 When there is trust, conflict becomes nothing but the pursuit of truth, an attempt to find the best possible answer. p.38 Overcoming the tendency to run from discomfort is one of the most important requirements for any leadership team in fact, for any leader.

4 p.39 When we avoid necessary pain, we not only fail to experience the gain, we also end up making the pain worse in the long run. p.40 When leadership team members avoid discomfort among themselves, they only transfer it in far greater quantities to larger groups of people throughout the organization they're supposed to be serving. p.41 When people fail to be honest with one another about an issue they disagree on, their disagreement around that issue festers and ferments over time until it transforms into frustration around that person. p.44 Two people who trust and care about one another and are engaged in something important should feel compelled to disagree with one another, sometimes passionately, when they see things differently. p.48 If people don't weigh in, they can't buy in. p.48 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. p.54 Peer-to-peer accountability is the primary and most effective source of accountability on a leadership team. p.56...the only way for a team to develop a true culture of peer-to-peer accountability is for the leader to demonstrate that she is willing to confront difficult situations and hold people accountable herself. p.57 The more comfortable a leader is holding people on a team accountable, the less likely she is to be asked to do so. p.57 To hold someone accountable is to care about them enough to risk having them blame you for pointing out their deficiencies. p.65 No matter how good a leadership team feels about itself, and how noble its mission might be, if the organization it leads rarely achieves its goals, then, by definition, it's simply not a good team. p.67 Too many of them (leaders) don't see a connection between the decisions they make and the impact they have on other parts of the business. p.69 Teams that lead healthy organizations come to terms with the difficult but critical requirement that its members must put the needs of the higher team ahead of the needs of their departments. p.73...alignment is about creating so much clarity that there is as little room as possible for confusion, disorder and infighting to set in. p.74...there is no way that their employees can be empowered to fully execute their responsibilities if they don't receive clear and consistent messages about what is important from their leaders across the organization. p.76 Alignment and clarity cannot be achieved in one fell swoop with a series of buzzwords and aspirational phrases crammed together. It requires a much more rigorous and unpretentious approach. p.79 A good plan violently executed today is better than a perfect plan executed next week. General Patton p.80...waiting for clear confirmation that a decision is exactly right is a recipe for mediocrity and almost a guarantee of eventual failure. p.82...successful, enduring organizations understand the fundamental reason they were founded and why they exist, and they stay true to that reason. p.82 Employees in every organization, and at every level, need to know that at the heart of what they do lies something grand and aspirational. p.91 If an organization is tolerant of everything, it will stand for nothing.

5 p.101 When leaders choose elaborate and unique phrases for their values but don't adhere to them, they generate more cynicism and distrust than if they said nothing at all. p.107 An organization's strategy is nothing more than the collection of intentional decisions a company makes to give itself the best chance to thrive and differentiate from competitors. p.117 Many leadership teams struggle with not wanting to walk away from opportunities. Strategic anchors give them the clarity and courage to overcome these distractions and stay on course. p.119 If everything is important, nothing is. P120 For something to be the top priority, it has to be more important than everything else. p.123 On a cohesive team, leaders are not there simply to represent the departments that they lead and manage, but rather to solve problems that stand in the way of achieving success for the whole organization. p people are skeptical about what they're being told unless they hear it consistently over time. p.143 The point of leadership is not to keep the leader entertained, but to mobilize people around what is most important. p Effective communication requires that key messages come from different sources and through various channels, using a variety of tools. p three keys to cascading communication: message consistency from one leader to another, timeliness of delivery, and live, real time communication. p.151 The most well-intentioned, well-designed departmental communication program will not tear down silos unless the people who created those silos want them torn down. p.154 An organization has to institutionalize its culture without bureaucratizing it. p the best human systems are often the simplest and least sophisticated ones. p.155 Human systems give an organization a structure for tying its operations, culture, and management together, even when leaders aren't around to remind people. p.156 Hiring without clear and strict criteria for cultural fit greatly hampers the potential for success of any organization. p.162 Leaders of organizations...need to understand the value of bringing in new employees with clarity, enthusiasm, and a sense of their importance. p.164 The single most important reason to reward people is to provide them with an incentive for doing what is best for the organization. p.167 Direct, personal feedback really is the simplest and most effective form or motivation. p.167 Many leaders convince themselves that employees are motivated primarily by money. As a result, they discount the impact of authentic and specific expressions of appreciation. p.173 No action, activity, or process is more central to a healthy organization than the meeting...there is no better way to have a fundamental impact on an organization than by changing the way it does meetings.

6 p.175 Four Basic Types of Meeting Content Type Timing Administrative Daily Check-In 5 10 minutes Tactical Weekly Staff minutes Strategic Adhoc Topical 2 4 hours Developmental Quarterly Off-Site Review 1 2 days p the fact that the single biggest factor determining whether an organization is going to get healthier, or not, is the genuine commitment and active involvement of the person in charge. p the leader must be out front, not as a cheerleader or a figurehead, but an active, tenacious driver. p leaders must not abdicate or delegate responsibility for communication and reinforcement of clarity.