Book Review: The Advantage – Why Organizational Health Trumps Everything Else in Business

The book is written by Patrick Lencioni. I read this book back in 2014 but did not take the time to write a review about it. I jumped again into it this August since it is one of the core references used within Arizona State University’s Learning Enterprise, which I just joined. So the lines presented below show the updated review I prepared after going through it for a second time.

The thirty main takeaways I got out of this book are presented below:

1. The single greatest advantage that any company can achieve is organizational health. Yet it is ignored by most leaders though it is simple, free, and available to anyone who wants it… Even the most open-minded executives have to come suspicious of anything that looks or sounds touchy-feely. This is a shame because the health of ab organization provides the context for strategy, finance, marketing, technology, and everything else that happens within it.
2. The sophistication bias – in an age where we have to come to believe that differentiation and dramatic improvement can be found only in complexity, it’s hard for well-educated executives to embrace something so simple and straightforward.
3. The adrenaline bias – becoming a healthy organization takes a little time. Unfortunately, many leaders suffer from a chronic adrenaline addiction, seemingly hooked on the daily rush of activity and firefighting within their organizations… executives need to understand the old race-car drivers’ axiom: you have to slow down in order to go fast.
4. The quantification bias – the benefits of becoming a healthy organization, as powerful as they are, are difficult to accurately quantify. Organizational health permeates so many aspects of a company that isolating any one variable and measuring its financial impact is almost impossible to do in a precise way.
5. Organizational health – at its core, organizational health is about integrity, but not in the ethical nor moral way that integrity is defined so often today. An organization has integrity – is healthy – when it is whole, consistent, and complete, that is, when its management, operations, strategy, and culture fit together and make sense… Strategy, marketing, finance, and technology are usually considered as decision sciences… A good way to recognize health is to look for the signs that indicate an organization has it. These include minimal politics and confusion, high degrees of morale and productivity, and very low turnover among good employees.
6. Most leaders prefer to look for answers where the light is better, where they are comfortable – and the light is certainly better in the measurable, objective, and data-driven world of organizational intelligence than in the messier, more unpredictable world of organizational health.
7. The Four Disciplines Model – 1) Build a cohesive leadership team; 2) Create clarity; 3) over communicate clarity; reinforce clarity.
8. DISCIPLINE 1: Build a cohesive leadership team – teamwork is not a virtue. It is a choice – and a strategic one… A leadership team is a small group of people who are collectively responsible for achieving a common objective for their organization… Two critical ways to communicate, have discussions and take decisions within a leadership team: advocacy (stating your case or making your point) and inquiry (it happens when people ask questions to seek clarity about another’s person’s statement of advocacy)… Inquiry is rather more important than advocacy.
9. Collectively responsible – this is perhaps the most important distinction between a working group and a real leadership team. Collective responsibility implies, more than anything else, selflessness and shared sacrifices from team members.
10. Common objectives – though it is pretty straightforward, it is worth stating that most of a leadership team’s objectives should be collective ones… If a team shares a common objective, a good portion of their compensation or reward structure, though not necessarily all of it, should be based on the achievement of that common objective.
11. Key behaviors. Behavior 1: building trust – be vulnerable, share personal stories, be willing to abandon their pride and their fear, to sacrifice their egos for the collective good of the team. Profiling: it involves using a behavioral profiling tool that can give members deeper insights into themselves and their peers (a good example is the Myers-Briggs Type Indicator)… 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.
12. The fundamental attribution error – at the heart of the fundamental attribution error is the tendency of human beings to attribute the negative or frustrating behaviors of their colleagues to their intentions or personalities, while attributing their own negative or frustrating behaviors to environmental factors… Too much vulnerability? – being vulnerable is the only way for team members to come clean about who they are, warts and all… The leader goes first – all of this is not going to happen if the leader of the team does not go first.
13. Behavior 2: mastering conflict – the fear of conflict is almost a sign of problems… when there is trust, conflict becomes nothing but the pursuit of truth, an attempt to find the best possible answer… 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 are supposed to be serving… Using a profiling assessment like the Myers-Briggs can be helpful in this process because people’s attitudes toward conflict can be shaped by their personalities and behavioral preferences as much as by their families and cultural backgrounds… It is important to avoid ‘artificial harmony’ (see image on page 42)… Two people who trust and care about one another and are engaged in something important should feel compelled to disagree, and sometimes passionately, when they see things differently… One of the best ways for leaders to raise the level of healthy conflict on a team is by mining for conflict during meetings… People need to get immediate feedback, the positive kind, when they start to try out this approach to conflict. Two useful rules used in a real case example (page 46): two formal rules – a) if people remains silent during discussions, the leader would interpret that as disagreement; and b) at the end of every discussion, the leader goes around the room and asks every member of the team for a formal commitment to the decision.
14. Behavior 3: achieving commitment – if people don’t weigh in, they can’t buy in… 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… It is only when colleagues speak up and put their opinions on the table, without holding back, that the leader can confidently fulfill one of his most important responsibilities: breaking ties.
15. Behavior 4: embracing accountability – peer to peer accountability is the primary and most effective source of accountability on a leadership team… When members of a team go to their leader whenever they see a peer deviate from a commitment that was made, they create a perfect environment for distraction and politics… To hold someone accountable is to care about them enough to risk having them blame you or pointing out their deficiencies… There is nothing noble about withholding information that can help an employee improve… Behaviors vs Measurables: behavioral accountability is more important than the quantitative, results-related kind – behavioral problems almost always precede – and cause – a downturn in performance results. Team effectiveness exercise: write down one thing that each of the other team members does that makes the team better; then ask them to do the same thing except this time focusing on the one aspect of each person that sometimes hurts the team… Holding one another accountable is a survivable and productive activity, and it will make team members likely to continue doing it forward… Addressing relatively serious issues, or matters of corrective action, are better handled privately.
16. Behavior 5: focusing on results – collective goals: goals that are shared across the entire team… The only way for a leader to establish a collective mentality on a team is by ensuring that all members place a higher priority on the team they are a member of than the team they lead (U.S. Congress or United Nations examples in page 68).
17. DISCIPLINE 2: Create clarity – it’s all about reaching alignment. Unfortunately, most leaders who complain about a lack of alignment mistakenly see it primarily as a behavioral or attitudinal problem… Six critical questions: Why do we exist? How do we behave? What do we do? How will we succeed? What is most important, right now? Who must do what? Answering these questions required time, and more than the right answer it is important to simply get an answer – one that is directionally correct and around which all members can commit… Perfection paralysis – many organizations struggle with this idea that there are no right answers… They’ve been influenced by academics, analysts, and industry pundits who falsely attribute business success to intellectual precision and accuracy in decision making.
18. Question 1: Why do we exist? – employees in every organization, and at every level, need to know that at the heart of what they do lies something grand and aspirational… an organization’s core purpose – why it exists – has to be completely idealistic… How do we contribute to a better world? – there are different categories: customer, industry, greater cause, community, employees, and wealth… The process of identifying why an organization exists is often a messy one.
19. Question 2: How do we behave? – when it comes to creating organizational clarity and alignment, intolerance is essential. If an organization is tolerant of everything, it will stand for nothing. Types of values – core values (two to three behavioral traits that are inherent to the organization); aspirational values (characteristics that an organization wants to have); permission-to-play values (the minimum behavioral standards that are required in an organization); and accidental values (they have come about unintentionally and don’t necessarily serve the good of the organization)… Isolating the core – the key to sifting core values from the others, especially aspirational and permission-to-play values, is to ask a few difficult questions.
20. Question 3: What do we do? – it is is critical to be clear and straightforward. It should not be crafted so that it can be used in marketing material… No adverbs or qualifiers, and no unnecessarily detailed descriptions of sales channels or pricing.
21. Question 4: How will we succeed? – when team leaders answer this question, they are determining their strategy… 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. Strategic anchors: they provide the context for all decision-making and help companies avoid the temptation to make purely programmatic and opportunistic decisions that so often end up diminishing a company’s plan for success… 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.
22. Question 5: What is most important now? – every organization, if it wants to create a sense of alignment and focus, must have a single top priority within a given period of time: the ‘one thing’… A thematic goal is singular, qualitative, temporary, shared across the leadership team… “If we accomplish only one thing during the next x months, what would it be?”… Defining objectives – these are the general categories of activity required to achieve a thematic goal… Standard operating objectives – ongoing and relatively straight-forward metrics and areas of responsibility that any leadership team must maintain in order to keep the organization afloat (see the one-page model in page 127). The length of a thematic goal should be within the 3-12 month timeframe.
23. Question 6: Who must do what? – every organization of any size needs some division of labor, and that begins at the very top. Without clarity around division of labor, the potential for politics and infighting, even among well-intentioned people, is great.
24. The Playboook – once the team has answered each of the six critical questions, it is absolutely critical for them to capture those answers in a concise, actionable way so that they can use them for communication, decision making, and planning forward (see Playbook examples in pages 136-137).
25. DISCIPLINE 3: Overcommunicate clarity – many leaders fail to overcommunicate because they get bored saying the same things over and over again… The point of leadership is not to keep the leader entertained, but to mobilize people around what is most important… If the best way to ensure that a message gets communicated throughout an organization is to spread rumors about it, then leaders simply ought to go out and tell “true rumors”.
26. DISCIPLINE 4: Reinforce clarity – an organization has to institutionalize its culture without bureaucratizing it… Recruiting and hiring – bringing the right people into an organization, and keeping the wrong ones out, is as important as any activity that a leadership team must oversee… Interviewing – without a clear understanding of what a cultural fit or misfit looks like, and without the active involvement of the leadership team, even the most sophisticated hiring process will fail… Orientation – the most memorable time of an employee’s career, and the time with the biggest impact, are his or her first days and weeks on a new job. The impact of first impressions is just that powerful, and healthy companies take advantage of that to move employees in the right direction… Performance Management – it is the series of activities that ensures that managers provide employees with clarity about what is expected from them, as well as regular feedback about whether or not they are adequately meeting those expectations… The best performance management programs are designed to stimulate the right kinds of conversations around the right topics… Recognition – as important as compensation and rewards are, they aren’t the most effective or important means of motivating people in a healthy organization… Firing – the way people are treated as they leave an organization is critical because of how it affects their life and because of the message it sends to the rest of the organization about how its leaders view people.
27. The centrality of great meetings – 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… Meetings are the best single piece of evidence to evaluate the health of an organization.
28. The four meetings (see image on page 175): daily check-in (administrative; 5-10 minutes; quick resolution of minor issues that might otherwise fester and create unnecessary busywork for the team); weekly staff (tactical; 45-90 minutes; real-time agenda by first sharing individual weekly top-priorities and then create such real-time agenda… this will avoid the all-too-common problem of sitting through a presentation or a discussion of something that everyone knows is of little importance to the organization); adhoc topical (strategic; 2-4 hours; dig into the critical issues that can have a long-term impact on an organization or that require significant time to resolve); and quarterly off-site review (developmental; 1-2 days; stepping back from business to get a fresh perspective, which is why it is best done away from the office)… Too much time in meetings? – the above would represent 25 hours per month (just 12% of our time)
29. What else should leaders be doing besides going to meetings? – a leader’s first priority is to create an environment where others can do these things and that cannot happen if they are not having effective meetings.
30. Seizing the advantage – 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… Ultimate impact – the impact of a healthy organization extends to customers and vendors, and even to spouses and children.

The author clarifies that, since he is not a quantitative researcher, the conclusions drawn in this book are not based on reams of statistics or finely crunched data, but rather on his observations as a consultant over the past twenty years of his career. He claims that qualitative field research is just as reliable as the quantitative kind, as long as clients of his consulting work and readers attest to its validity.