Letter 1 Thoughts of a Chairman: Organisational Health

In Patrick Lencioni’s latest book, The Advantage:  Why Organizational Health Trumps Everything else in Business, I was intrigued to learn whether he had indeed found the Holy Grail:  Sustained Competitive Advantage.

Lencioni’s claim is that the biggest opportunity for achieving competitive advantage lay not in the smart things a company does, like strategy, finance, marketing and technology, because this is something most manage to do anyway.  Lencioni states being smart is not enough: to gain competitive advantage, a company also has to be organisationally healthy.  At its core, organisational health is about integrity, not in the moral or ethical sense, but in its consistency where management, operations, strategy and culture all gel together.  That means minimal politics and confusion, high degree of morale and productivity, and low turnover among good employees.  So far, so good but how do us mere mortals get there?

The key behaviour Lencioni focuses on and a foundation for all the others, is trust.  This is not trust in its predictive sense where you might have a high degree of confidence that someone you know will deliver on a promise.  What Lencioni focuses on is vulnerability based trust, where members of a leadership team can be completely comfortable being transparent, honest and naked with one another.  A highly laudable attribute but how new is this concept?

Here’s what Alan Webber wrote in a HBR in 1993, which closely echo’s Lencioni’s idea:

“Trust is tough because it is always linked to vulnerability, conflict and ambiguity.  Vulnerability is a precondition of trust.  Before any two people can form a personal bond, they must first open themselves up, let each other know ‘where they stand.’  But that creates the possibility of disagreement and conflict.  Indeed, healthy conflict is a sign of the existence of trust.  It shows that two people care enough to disagree.  Finally, trust acknowledges the inevitability of ambiguity.  No two people will see the same event in the same way or have the same feelings about it.  Trust admits to that ambiguity and strives to negotiate it.”

And my conclusion?  I’m enjoying Lencioni’s latest book which unlike his earlier books, is not written as a fable.  As you may have guessed, I’m still ploughing my way through so a further instalment can be anticipated.


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