Lencioni Makes the Case for ‘Soft Stuff’

Walk into any bookstore with a business section and you will see a subsection dedicated to the books of Patrick Lencioni.

A Bain & Co. alumnus, Lencioni is on a short list of top-dollar consultants who figured out that a fully functional organization is by far the most sustainable competitive advantage an organization can have. Lencioni writes business fables, backed up by simple, no-nonsense frameworks and concepts. His small library has dealt with a range of organizational issues, including teams, meetings, politics, leadership and engagement.

As a fan of his work, I have only one complaint: that he did not publish his most recent book first. “The Advantage: Why Organizational Health Trumps Everything Else in Business” (Jossey-Bass) makes a compelling case for what too many business leaders call “soft stuff.”

For decades, both our formal business education and the role models we have had as CEOs largely manage to the numbers or become fierce operational drivers. Describing topics like culture, leadership depth, team performance, emotional intelligence and clear communications as strategic performance drivers often sounds like mush to leaders who are primarily task-focused.

Financial measures are, of course, the scorecard of success. But financial measures are a measure of what has already happened. So while a clear command of the numbers may show us the questions, it usually does not point to the answers. To understand the power of what Lencioni calls a healthy organization, take a few minutes to consider these questions:

  1. How would your business be different if most of the organizational politics were gone?
  2. What would change in your quality and costs if you had a culture that managed out poor performers and those not invested in the mission of the company on your behalf?
  3. How would innovation and market responsiveness improve if the organization could successfully plan and implement change at all levels?
    So is your first reaction that these ideas are not workable? Consider these results from organizations that have made a healthy organization a priority:
  • A regional services firm streamlined both operations and change projects by eliminating political silos, cutting time to market for new products by 30 percent and reducing failed change initiatives to fewer than 5 percent.
  • A food and beverage retail firm shook off its reputation as unimaginative to ramp up new products based on suggestions from employees resulting in reinvigorated growth for $0 investment in R&D.

No matter what your business is, in the end it is made up of people, and the level of their talent and skill you get is not a function of what you pay for, no matter how unfair you may think that sounds. An employer pays for labor and work product. Just consider how much the organization benefits if you also get employees’ hearts and minds – which cannot be bought.

The only place I disagree with Lencioni is in his very first paragraph:

“The single greatest advantage any company can achieve is organizational health, yet it is ignored by most leaders even though it is simple, free and available to anyone who wants it.”

Moving to organizational health is not simple or free. It asks many leaders to move in a direction that is contrary to their natural instincts. It requires focus of attention for a period long enough to overcome both personal and organizational resistance. And for most companies, it requires an investment in culture change, leadership development, process change and even organizational metrics.

And here is one last hint. In my experience, most leaders are more out of touch with their organizations’ level of health than they think. Unlike Shakespeare’s Henry V, the boss can rarely take an anonymous walk among the troops to learn how they are really feeling about the battle.

Originally published in Arkansas Business, Barry Goldberg On Leadership, April 2, 2012.