Patrick Lencioni – Organizational Health – Catalyst 2012

I begin all of my talks with a confession, which makes sense because I'm a practicing Catholic.

I am a little nervous. It's not the number of people here, it's all of the things going on. My personality is an ENFP. If you don't know what an ENFP is, the prayer for an ENFP is, "Dear Lord, please help me to focus, oh, look, a bird, on the things I have to do."

The second confession is, the things I'm going to tell you today are simple, folks. People need to be reminded more than they need to be instructed.

Ken Blanchard said to me one time, "You know why your books are selling so well, don't you? It's all based on the Bible." WE're just restating what Jesus said.

The third confession is that I've never given a talk in jeans before.

I wrote this book called The Advantage - and here's the premise. Organizational health is the single biggest thing can have to gain a competitive advantage, and yet, it remains virtually untapped in most organizations.

It's free, and most anyone can do it.

So why don't people do it? I was at the Southwest Airlines leadership conference a couple of years ago, and I learned why. I was sitting there with the CEO, Gary Kelly, and I leaned over and asked a semi-rhetorical question. And he had a somewhat sad look on his face, and he said, "You know, Pat. I honestly think they think it's beneath them."

The truth is, it really is simple, but it's only for those who have the willingness to humble themselves enough to do it.

So what is organizational health.

Every organization that wants to be successful has to be two things:

Smart - The problem is that it's only half the equation but gets 99% of the attention.

  • Marketing
  • Strategy
  • Finance
  • Technology

Healthy

  • Minimal Politics
  • Minimal Confusion
  • High Morale
  • HIgh Productivity
  • Low Turnover

But we just keep tweaking the smart things because it's an objective, measurable area.  The health stuff is messy and emotional and hard to measure.

I never go into a company and think, "This could be a great company, but these people are just too dumb."

What's the thing that's going to make our organizations better?  Health.  The healthier our organization is, the more intelligence it's going to get to use.

Healthy organizations aren't smarter than their competition. Their culture is so healthy they tap into all of the knowledge they have.

If we can build a healthy organization we can make smarter decisions and strive.

There are four disciplines at the heart of a healthy organization.

  1. Build a cohesive leadership team.  The people at the top have to be behaviorally cohesive.
  2. Create clarity.  They have to answer 6 simple but critical questions
  3. Overcommunicate clarity. Leaders have to overcommunicate things.  Great leaders communicate so much, long after their tired of communicating the message.  If you're a leader, your people should be able to do a great impression of you
  4. Basic human systems

I want to talk more about number 1.  There are five behaviors of a cohesive leadership team.

  1. Trust - No duh.  It's obvious.  But I'm  not talking about predictive trust.  any two people who have known each other for a long period of time have predictive trust.  I'm talking about vulnerability trust.  When people can be that emotionally buck naked with one another and be completely honest about who they are, warts and all, it creates a dynamic like nothing else.I worked with a team once, a start up company, high-tech, start up on steroids.  They had all of this money in the bank.  They were going to change the world.  So they called us to work with them.   We learned they were losing to less smart competitors.  There was this funky dynamic on their leadership team where whenever one person spoke, everyone got silent.  I asked another person why.  He said because she never changes her mind, never admits she may be wrong.  Never sees things from our sides.  So we did an offsite with them.  And we went to dinner one night and had wine with dinner.  And this woman picked up her glass at the end of dinner and stood up and gave a toast and said, "I'm not going to be trusting you guys any time soon, if ever."  After the meeting I went outside and talked with the CEO.  And we said we have to get this woman to trust.  And so finally the CEO managed her out of the company and off the team.  At the next meeting, you would have thought we swapped out every member of the team for different people.When you have one person on the team who can't be vulnerable, it changes the entire dynamic of the team.  We know this from sports, right?  One guy in 50 on a football team can poison the team.  If that's the case, what does that do for our leadership teams, our church teams?The only way we can get to vulnerable is if the leader goes first.  It's a leap of faith folks, and it's not comfortable.I once worked with a leader who could not do this.  He's famous and brilliant and intimidating.  So no one on his team ever gave him feedback.  So we did 360 reports, but he didn't want to share the results.  So the head of HR got him to reluctantly share the results.  So he went down the list and just asked around the table what everyone thought.  And of course, they told him what he wanted to hear.  So if I'm going to be a good consultant, I have to do something and risk losing the client.  So I slide up next to the CEO and say, "But you guys were the only ones who filled this out."  But only one guy spoke up.  The rest cut his legs out from under him.  That company circled the drain and was sold off for a fraction of the cost.

    All that CEO had to do was stand up there and be human.  But what about not letting them see you sweat.  You know what, they see you sweating before you nkow you're sweating.

    I don't think you can be too vulnerable.

  2. Conflict - Conflict is a good thing on a team when there is trust.  Conflict is nothing but the pursuit of truth, but conflict without truth is politics.  A good team has to have conflict.We owe it to each other to disagree sometimes.  When we withhold our opinion, it's bad, because when we don't disagree with someone around an issue, it becomes about the person.You know, though that every church, culture, family, etc. Is going to have different expectations of conflict.  If you're working with culturally Japanese people and their sucking air through their teeth, it means they really hate the idea.

    Even here in the US we have these interesting dynamics.  Conflict is going to look different in different regions, different companies, different churches, but that doesn't matter.  You have to know that people on your team cannot be choosing their battles, counting their costs.

    Relationship is built on recovery from difficult moments.

  3. Committment - Force Clarity and Closure
  4. Accountability
    Peers are the primary source of accountability on a great team.  They don't go to the leader all of the time.  But that will only work if the leader is the primary source of accountability.Firing someone is often an act of cowardice.A leader who doesn't like to hold people accountable, like me, we're what's called a wuss.  I used to think I didn't like to hold people accountable because I don't want them to feel band, and I realized in a moment of honesty, I just don't want them to blame me for feeling bad.

    If I love someone, I owe it to them to tell them where they can improve.

    You know what taught me the importance of accountability?  I'm telling one of my twin seven year old boys a bedtime story.  The other twin is in time out.  So he comes in half way through the story and asks to stay.  I say yes, but my wife comes in and says, no, you have to go.  So my other son, Connor says, "Dad, if you don't hold him accountable, he's never going to learn the consequences of his actions.

  5. Results
    Ultimately great teams get results.  But something else happens when we build great teams.  We're building a ministry.  When we build great teams, people treat each other differently at home, in the store, on the bus, and I don't think that is beneath any of us.

Andy Stanley: How would you suggest people use The Advantage with their leadership teams?

PL: I think I'd sit down with the team, read the intro and then go through it section by section.

AS: What do you say to the point leader of a team with a good product but a bad culture?  Is there a first thing?

PL: I hate to say this because we're so used to offsite meetings being these touchy feely things, but it's going to start with us getting out of the office for a day and a half.  That process will become so important.  In a day and a half you'll see results.  You'll slide if you don't follow up, but you'll see results then.

AS: Sometimes senior pastors are in leadership positions that seem just a bit closer to God.  What do you say to staff members whose senior pastor seems to have created this shell.

PL: It's a tough role to be a spiritual father as well as a managerial leader.  Be vulnerable, let them in.  Tell them it's hard.  To be vulnerable, the people you care for every day, there are times they have to care for you.

Patrick Lencioni – Organizational Health – Willow Creek Global Leadership Summit

This is the most important talk I've given in terms of my career. But this is simple. People need to be reminded more than they need to be instructed.

Two years ago, almost to the day, I was in Dallas at Southwest Airlines. I'm lucky to count them as a client. I was sitting there listening to these amazing presentations about the great things they do to make their customers happy. I was sitting next to Gary their CEO. I said, "Gary, why don't your competitors do any of this." It was a rhetorical question, but he said, "Honestly, I think they think it's beneath them."

The things Southwest does that makes them great, so many

Organizational health is the single greatest competitive advantage in business. It is virtually free and accessible to any leader who wants it, and yet it remains virtually untapped in many organizations.

To many leaders think it's beneath them, not measurable enough.

The best way to understand organizational health is to contrast it with something we're more familiar with.

In order for any organization no matter the size has to do to be great is be:

Smart - Good at finance strategy marketing technology, etc. I started at Bain as a management consultant to help companies be better in these things, and they're great things. THe problem is it's only half the equation and it gets 98% of the attention today

Healthy - Minimal politics, minimal confusion, high morale, high productivity, low turnover.

CEOs I talk to would give their left leg to make their organization healthy, but they don't know how to do it.

We're more comfortable in finance and strategy or in churches with music and theology, but if we really want to change our organizations, we have to make them healthier.

Thirty years ago, the smart things were still largely untapped, but now everyone has access to those, so you can't distinguish yourself with the stuff on the left.

Southwest is a fabulous organization not because they're smarter, they probably have fewer PhDs, etc. They're healthier, and so they use every bit of knowledge they have.

How do you make your organization healthy. There are four disciplines:

  • Build a cohesive leadership team
    • Results
    • Accountability
    • Commitment
    • Conflict
    • Trust
  • Create Clarity
    The leadership team also has to be intellectually aligned.  They have to be on the same page.  Mission statements can be great, but so many of them read like the Dunder Mifflin mission statement. What you really have to do is answer six critical questions.

    • Why do we exist?
      Every organization at its core has to know why it exists at the highest, most basic level.  This is easy for churches, but for others, not so much.
      Mary Kay is a really interesting one because it has nothing to do with making women more powerful.   It's about empowering them in business.
      I asked a team at a paving company why the company exists.  They didn't really know, and finally the CEO said, really it's to employ all of these people who are first generation Americans.
      Southwest is about democratizing travel in America so that people can travel even if they don't have a lot of money.
      This isn't just fluffy stuff for a t-shirt.  It defines how your organization acts.  Southwest had to decide if they were going to add bag fees.
    • How do we behave?
      This is one that churches don't have such an easy time with.
      Every company has value statements these days, but they tend to be every good thing you could possibly do and be.  Love and customer service and community relations...
      The truth of the matter is, when we talk about how we behave, we have to get that down to the 1 or 2 or maybe 3 endemic behaviors that make our organization truly different.
      We have to avoid confusing these with aspirational values, values we wish we had but we don't.
      A core value is something you're willing to get punished for.  You'll do it even if it's not convenient or you're going to get punished for it.  Humor is a core value for Southwest.  They make jokes during the safety announcements.  Years ago when Herb Kelleher was still in charge, a woman was offended by jokes during the safety briefing and wrote Herb.  Most companies would have written back and said, "We're so sorry."  And send a drink coupon or something.  Southwest sent her a note that said, "We'll miss you."
      When somebody asks you to violate a core value, you lovingly recognize that might not be the place for them.
      Violating your core values is like selling your soul.  That's why you don't have many of them.
      Sometimes you have a core value, people take it a little too far.  The rumor is there was a Southwest pilot who spilled coffee on himself and he took off his clothes.  Now, they disciplined him and all that, but I'm guessing the leaders laughed behind closed doors later.
      Churches really confuse this sometimes because they confuse it with permission to play values.  Those are minimum standards just to work at the organization.  The hard thing is when you have a church is the minimum standards are critical and huge.  And those are important, but it's not enough, because when you have core values, it's not enough to be qualified.  You have to be in alignment with the core values.  Obviously someone should be welcome to be in the congregation, but you shouldn't hire them for your staff.  Sometimes churches struggle to use core values because someone "loves Jesus."  But that's not enough.
    • What do we actually do?
    • How will we succeed?
      This is strategy.  What is strategy?
      The myriad of intentional decisions you make to run your organization to succeed and differentiate yourself from your competitors.
      It boils down to three strategic anchors through which you make every decision.  Suddenly decision making becomes a science and not just a guess.
      Southwests anchors are: Make your customers fanatically loyal.  Don't make your plane late.  And keep your fares low.  All decisions are made through those lenses.  You can show up with a ticket at a different airport and they'll let you get on if they have seats.  Try that at another airline!  You'll be in line for ever and pay insane change fees.  They don't have a strategy.
      Years ago I was flying before they changed their seating strategy, and I suggested to this young woman that they put seats in for the folks who were standing in line forever, and she said that would raise costs and cause fares to go up.  She understood.
    • What is most important, right now?
    • Who must do what?

    If we can answer these six questions, we actually create empowerment, and not just as a buzzword.

  • Overcommunicate the anchors
  • Reinforce clarity

I wish organizational health were a standard like the smart things.  That will change the world, change society, change us as people.

Until that happens it represents a great opportunity for meaningful competitive advantage.