PDF Summary:The Advantage, by Patrick Lencioni

Business leaders tend to overinvest in things like marketing and technology to obtain a competitive advantage. However, Patrick Lencioni claims that the biggest advantage you can gain is free and already within your reach: organizational health. Without organizational health, even the savviest industry leaders will fail to reach their full potential. The Advantage presents Lencioni’s straightforward method to establish organizational health and become a powerhouse company in your industry.

This guide will define organizational health and present Lencioni’s method for achieving it. First, we’ll discuss how to create an effective leadership team. Next, we’ll cover how to form a unifying company culture with clear and consistent goals. Then, we’ll explain how to promote employee alignment and dedication. Finally, we’ll explore how to maintain organizational health with effective meetings. Throughout the guide, we’ll supplement Lencioni’s advice with recommendations from other books that focus on organizational health and development, such as Traction by Gino Wickman and Start With Why by Simon Sinek.

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(Shortform note: Experts agree that clearly defining team roles and responsibilities is key for productive and effective organizations. However, they add a few extra recommendations to help create effective roles that people enjoy working in. First, ask members about their long-term goals and try to assign them roles and responsibilities that will help them to accomplish those goals. Next, give members complete ownership over their roles—showing members that you trust them to get their tasks done without looking over their shoulder will provide them with motivation and encourage them to take initiative.)

Standard #5: Hold Each Other Responsible

Finally, Lencioni explains that team members must be comfortable directly holding each other responsible for their work rather than asking the leader to enforce accountability. This means confronting someone if they stray from their commitments or are hindering progress, even if they’re doing it unintentionally. This will maintain unity and encourage dedication among team members because they know they’ll be held accountable for their efforts.

To get into the practice of holding each other accountable, Lencioni recommends that team members write down one beneficial thing that each member does and share their responses. Then, have everyone write one thing each person does that might hurt the team and have everyone share their responses. By discussing the positives before the negatives, team members will feel more comfortable being transparent with each other for the benefit of the team.

How to Have an Effective Accountability Conversation

While Lencioni’s strategy helps team members to practice holding each other accountable, it doesn’t explain how to effectively conduct an accountability conversation in the moment when difficult situations arise. The authors of Crucial Accountability explain that this skill is crucial because accountability conversations are complex and delicate—even one small error when discussing accountability with an employee could compromise safety and create more issues than you started with. As such, they add to Lencioni’s advice by providing a step-by-step method for how to have accountability conversations.

1) Identify the key issue at hand and whether or not it’s worth addressing. To identify the key issue, consider the root cause of the person’s bad behavior—what person, social, or environmental factors led to their actions? For example, maybe they missed a deadline because they have a procrastination issue. Then, consider whether or not this key issue will persist, get worse, or harm your relationship if left unaddressed. If yes, then you should hold an accountability conversation.

2) Make the environment safe by understanding their point of view. Consider the underlying barriers that might have prevented the other person from upholding their commitments. This will help you avoid the fundamental attribution error discussed earlier in this guide.

3) Introduce the issue in a clear and concise way to show respect and a shared purpose. Do this by clearly stating the facts—what your expectations were and how the other person broke them. Then, explain how this impacted you. Finally, open the floor for them to respond and explain their perspective.

4) Make a plan and follow up. Once you and the other person understand the issue and the expectation, work together to come up with a solution to the problem. Then, follow up with the other person to make sure that your plan is working.

Step #2: Establish Clear and Consistent Organizational Goals and Standards

Next, Lencioni says that leadership teams must create a company culture with clear and consistent organizational goals and standards. These goals and standards will provide employees with clarity on the organization’s purpose and their role in it and will unify them through shared values and ideals.

To create a company culture with clear and consistent goals and standards, Lencioni says the leadership team must establish four principles: the organization's core purpose, its behavioral values, its strategies for success, and its top priority.

(Shortform note: In The Culture Code, Daniel Coyle similarly emphasizes the importance of a strong company culture with clear and consistent goals and standards. However, rather than the organization’s purpose being one component of a strong organizational culture, he says purpose is the foundation of other cultural elements, like behavioral values, success strategies, and priorities. He elaborates that putting purpose at the core of the organization will increase the energy employees put towards tasks, make people learn faster, and increase connection and empathy among coworkers and customers. Ultimately, these benefits will maximize the organization's success.)

Principle #1: The Organization’s Core Purpose

Lencioni says that all organizations function to help people in some way. To determine your organization’s core purpose, reflect on what your organization does and why. Your what should be pretty straightforward, but your why will probably be somewhat unique—who are you trying to benefit and how? The possibilities are endless, but your answer must be specific, true, and concise.

For example, if you run a dry cleaning business, your what would be “we wash and dry people’s laundry.” Your why could be “we wash and dry people’s laundry so that clean, professional-looking clothes are accessible to all.”

(Shortform note: In Find Your Why, Simon Sinek agrees with Lencioni that your purpose statement must be specific, true, and concise. However, he emphasizes one more characteristic that Lencioni doesn’t mention: Your purpose statement must be constant. This means that your purpose should be upheld in all aspects of your work and should endure over time. For example, if your core purpose is to help people save money on essentials, you can uphold this purpose by providing employees with free hygiene essentials like toothbrushes and deodorant.)

Principle #2: Behavioral Values

Lencioni explains that healthy organizations must identify their behavioral values so employees align with and uphold the company’s cultural expectations. These values should encompass (1) positive behaviors that are already represented in your organization and (2) behaviors that you aspire to incorporate into your organizational culture. When compiling your list, Lencioni recommends writing these values as they would look in action rather than as one-word adjectives—this makes them more specific and actionable for employees.

For example, avoid one-word values like charity, altruism, and drive. Instead, say “a passion for helping those who are less fortunate,” “willingness to sacrifice personal wants for others’ needs,” and “tenacity to accomplish personal and professional goals.”

How to Identify Existing Behavioral Values in Your Organization

Lencioni recommends creating behavioral values based on ones that already exist in your organization and ones that you want to implement. However, it’s often easier to identify what you want than to recognize what you already have. In Traction, Gino Wickman provides a four-step method for uncovering your organization’s existing behavioral values:

• Think of three people in your company who stand out as star performers.

• List all the characteristics and values these people embody—for example, hard-working, customer-focused, or imaginative. (This might be a long list, but include everything.)

• Combine similar values from the list of characteristics you created in the previous step.

• Finally, narrow your list down to three to seven values that you think best define your organization.

Principle #3: Success Strategies

Lencioni explains that healthy organizations should have three primary strategies that they use to achieve their core purpose. To identify these strategies, brainstorm a long list of all the possible ways that you can achieve your purpose. Then, divide similarly themed ideas from your long list into groups and label each theme—for example, ideas that are related to keeping consumer costs low can be lumped into an “affordability”-themed group. Finally, narrow down the three themes you think are most important to upholding your core purpose—these will be your primary success strategies.

Lencioni says that this method will ensure that your company’s actions align with and progress your core purpose. This will result in organizational clarity and consistency, two factors that are vital for healthy organizations.

For example, imagine your dry cleaning business’s core purpose is to “wash and dry people’s laundry so that clean, professional-looking clothes are accessible to all.” Some strategies on your long list might be: Keep prices low, use hypoallergenic detergent, be located within walking distance of public transportation, and remain open 24 hours a day. These strategies can be lumped into the overarching theme of “inclusivity,” which is an important strategy for upholding your core purpose.

Creating Good Company Strategy

Lencioni recommends creating success strategies based on your organization's core purpose. However, in Good Strategy Bad Strategy, Richard Rumelt suggests that focusing on your goals while strategizing can produce weak strategies because doing so fails to identify organizational challenges and ways to overcome them. This can cause problems down the line. Imagine your organization as a metal chain—if you allow weak links to remain, they’ll eventually give out. Similarly, allowing internal issues to persist will cause major issues for your company’s health down the road.

To create a solid company strategy that both aligns with your organization’s core purpose and helps your organization overcome challenges, Rumelt suggests identifying internal weaknesses and leveraging your organization’s strengths to help overcome them: in other words, using your strengths to improve your areas of weakness.

For example, imagine that your organization is full of strong innovators who love to brainstorm new ideas, but one of its internal weaknesses is a lack of collaboration between teams. If teams continue to shun collaboration, organizational health will eventually decline. To avoid this outcome, use your company’s strength of innovation to encourage members to collaborate: Create a strategy called “collaborative innovation.” This might include policies such as requiring weekly meetings to share innovative new ideas, creating new teams that work together on innovative product designs, and using peer review to evaluate innovations.

Principle #4: The Short-Term Goal

Finally, Lencioni explains that healthy organizations should have a single, short-term goal that’s their top priority. This will ensure that the organization solves issues that could harm it and continues to improve. Your short-term goal should be achievable within three to 12 months and should be a shared effort among the leadership team.

To determine your short-term goal, consider one thing that must be done in the next year or less to improve or maintain your organization. Then, create a to-do list—determine exactly what must happen to solve the problem or achieve the goal. Finally, determine the areas of improvement your organization must focus on to accomplish each item on your to-do list.

(Shortform note: In Traction, Gino Wickman also emphasizes the importance of short-term goals, but his recommendations slightly differ from Lencioni’s. While Lencioni recommends creating goals that can be accomplished in three to 12 months, Wickman says that you should give yourself a full 12 months to complete your plan. The plan must include a revenue goal, a profit goal, and measurables (like a number of clients to gain or a number of products to produce). You must also identify seven priorities you’ll complete within the year to propel you toward the goal—a more specific version of Lencioni’s to-do list. Finally, Wickman recommends creating a budget to ensure you have the necessary resources to complete the plan—something Lencioni doesn’t address.)

Step #3: Achieve Employee Alignment and Dedication

For an organization to be healthy, Lencioni says that employees must align with and be dedicated to the organization’s goals and standards—this is vital for organizational unity.

To achieve employee alignment, the organization’s hiring and firing processes must align with its goals and standards. To achieve employee dedication, leaders must constantly and effectively communicate the organization’s goals and standards and their personal dedication to them. Let’s explore each of these processes in more detail.

(Shortform note: To create employee alignment and dedication, Lencioni says goals and standards must be prioritized during hiring and firing and must be constantly communicated to employees. While John Doerr agrees that goals must be transparent, he points out in Measure What Matters that creating organizational goals and standards at the top, as Lencioni recommends, may disrupt employee dedication. When goals and standards are created at the top and then trickled down through methods like hiring processes and rigid protocols, employees on the ground aren’t given the opportunity to offer ideas regarding their own work. Consequently, they may feel like their opinions and experiences aren’t valued, and organizational efficiency, flexibility, connection, and motivation may decrease as a result.)

Strategy #1: Prioritize Organizational Alignment When Hiring and Firing Employees

The first step in achieving employee alignment is to prioritize the organization's goals and standards during the hiring process. Many organizations struggle with this because they prioritize potential employees’ skills over their attitudes and values. Hiring employees who don’t align with the company’s goals and standards disrupts organizational health by causing inconsistencies within organizational culture, disagreements, low productivity, and high employee attrition.

Before placing value on a candidate's skills, interviewers should gauge whether the candidate upholds the organization’s behavioral values and believes in the organization’s core purpose. Candidates who don’t align shouldn’t be considered for the role. Employees who are hired should be thoroughly trained on the organization’s core purpose, behavioral values, and success strategies to reinforce alignment and dedication.

Next, Lencioni says that organizations must change their firing practices to retain employees that meet behavioral standards and eliminate employees who don’t—regardless of their skill level. If you’re considering firing an employee who meets behavioral standards but lacks skill, give them a performance improvement plan instead—according to Lencioni, it’s easier to improve the skills of someone who’s aligned with the organization than to change the attitude and values of someone who’s highly skilled.

How to Measure Employee Alignment for Hiring and Firing Practices

Lencioni says that an employee's alignment with organizational goals and values must be prioritized during the hiring and firing processes to create a healthy organization. Organizational health experts generally concur with this sentiment, but some emphasize that it can be difficult to accurately judge whether or not someone truly aligns with your organization’s goals and values. Sometimes, a misunderstanding in this area may cause you to overlook a prime candidate or fire a highly aligned and dedicated employee. To avoid these pitfalls, experts make a few recommendations that will guide you on who to fire and who to retain.

First, when creating alignment guidelines, identify three to five behavioral values (or in Lencioni’s model, standards that an employee should believe in) that your company prioritizes. These will be the values that measure someone’s alignment with the company during the hiring and firing processes. Lencioni makes a similar recommendation, but he doesn’t specify the number of values that should be prioritized.

Second, create a list of open-ended questions that will prompt the candidate to identify the company’s values on their own, before the interviewer tells them what they are. For example, you can explain a star employee’s behavior, interactions, accomplishments, and other aspects that highlight how they uphold the company’s values. Then, ask the candidate to explain why these actions led to success and which behavioral values (or standards) they represent. This will help you identify how familiar the candidate is with your company’s values coming into the interview and will give you insight into their communication skills.

This method can also be used to determine whether or not to fire a candidate—before firing someone, have a meeting and use these questions to ensure you avoid losing a valuable employee who meets your behavioral standards due to a misunderstanding surrounding their alignment.

Strategy #2: Gain Employee Dedication With Constant, Effective Communication

To ensure employee dedication to the organization’s goals and standards, these goals and standards—and leaders’ dedication to them—must be effectively and repeatedly communicated. Lencioni explains information must be repeated multiple times for employees to fully understand it and dedicate themselves to acting on it. Further, information must be communicated in a way that achieves employee buy-in.

(Shortform note: Experts similarly emphasize that constant and effective communication is necessary for an organization to continue growing. They list three components that make communication within an organization effective: It must inspire, educate, and reinforce. These components align with Lencioni’s recommendation to repeatedly communicate in a way that achieves employee buy-in. Reinforcing previously established goals and standards means constantly communicating them, and making information inspiring and educational ensures that employees always personally believe in goals and standards and know what’s expected from them.)

Outside of traditional communication methods like newsletters, email announcements, and all-hands meetings, cascading communication is the best way to ensure employee dedication. Cascading communication is when news travels from the top down by word of mouth. In practice, this means that members of the leadership team leave meetings and immediately share the news from that meeting with their direct reports, who then share with their direct reports, and so on until the entire organization has received the news.

For cascading communication to be effective, Lencioni says that messages must be consistent and communicated promptly and face-to-face. Members of each hierarchy bracket (executives, managers, supervisors, general employees, and so on) must receive the same message within the same time frame. For example, all executives should get the news within the first hour, managers within the second hour, supervisors within the third hour, and so on.

How to Create a Strategic Cascading Communication Plan

Cascading communication is an extremely popular method recommended by business consultants to help organizations effectively communicate with employees. However, like Lencioni, many experts emphasize that cascading communication can quickly become disorganized and ineffective if messages aren’t consistent and communicated promptly. To ensure these standards are met, experts recommend creating a strategic communication plan with the following steps:

1) Identify the key components of the message. Cascading communication takes place face-to-face and as such, messages are often expressed to direct reports in a personalized way. However, leaders can sometimes miss important pieces of information when tailoring the message. To avoid this, the leadership team must outline the key components of the message that they and their direct reports must communicate downwards.

2) Ensure the message is concise and effective. Direct reports must ensure that their messages (1) emphasize the key components, (2) explain how and why the information will be applied, and (3) avoid unnecessary tangents.

3) Make sure that everyone is accounted for. Make sure that every member of the organization receives the message, especially if they don’t report to a leader in the main hierarchy. For example, you could make a map of the organization and appoint a leader to share information with each group, including groups that don’t have direct executive supervisors.

4) Plan for a follow-up. Just because information is communicated doesn't mean it’s followed through on. Schedule a time to follow up with each level of the hierarchy to ensure the message was understood and acted upon. This is the time when you should receive feedback from employees as well to make sure the plan was effective and to address any questions or concerns people might have.

Cascading communication is effective because face-to-face communication increases personal dedication. When employees witness their leader’s dedication through their facial expressions and tone and are able to respond and ask questions, they feel personally involved in the organization’s mission and consequently more dedicated.

(Shortform note: Experts agree with Lencioni that face-to-face communication (FTFC) increases employee dedication and productivity. They also note a few benefits that Lencioni doesn’t mention. First, FTFC increases trust by helping employees get to know each other. Second, real-time conversations make it easier to explain your point and persuade employees that it’s valid. Third, FTFC enhances conflict resolution because people are more likely to pick up on tension based on the other person’s body language and resolve any issues immediately. Written communication makes it far more difficult to read others’ emotions, which is a necessary component of conflict resolution.)

Step #4: Maintain Organizational Health With Effective Meetings

Finally, Lencioni explains that you must maintain organizational health by having effective meetings. In these meetings, the organization’s values and success strategies must be used to solve problems, achieve goals, and progress the organization. To be effective, the meetings must have a clear, narrow focus.

Implement Effective Meetings at All Levels of the Organization

While Lencioni emphasizes that the leadership team must have effective meetings to establish organizational health, Ray Dalio points out in Principles: Life and Work that effective meetings need to occur at every level of the organization to maintain productivity. As such, he recommends that all leaders and teams use the following criteria for meetings to keep them effective:

• Clarify the details—who’s running the meeting, what level the meeting is taking place at, and what its (clear and narrow) goal is. For example, it could be an informational meeting or a debate.

• Determine how many people should be invited and who they should be. Dalio points out, like Lencioni, that decision-making meetings should be limited in numbers—roughly three to five people. However, educational meetings can include more people.

• Track the conversation. Keep track of the conversation on a public board like a shared screen or a whiteboard to ensure that the meeting stays on-topic. This will also help members of the team stay on track because they can see where the conversation is going.

Lencioni proposes five types of meetings that your leadership team should have regularly.

#1: Daily Meetings

Every morning for five to 10 minutes, the team should meet to share any relevant administrative information like scheduling issues or important events. This will solve small problems quickly and ensure that everyone’s in the loop while saving time that’s usually spent emailing back and forth or playing phone tag.

(Shortform note: Lencioni’s concept of daily meetings is commonly used in the software development world. Such meetings are referred to as “stand-up” meetings. Experts add a few tips to Lencioni’s advice on how to keep these quick, daily check-in meetings effective: (1) Schedule a daily time for the meeting and stick to it. (2) Have a clear leader. (3) Make sure the meeting doesn’t exceed 15 minutes (in contrast to Lencioni’s 10-minute mark). (4) Note important side conversations that arise so you can discuss them later.)

#2: Weekly Meetings

Once a week, the team should meet for 45 to 90 minutes to discuss their progress toward their short-term goal. At the start of the meeting, collaboratively create an agenda: Begin by having each member briefly share their priorities for the week (issues to fix or activities to perform) that relate to the short-term goal. Then, the team must determine their progress level—good, average, or bad—toward each item on their to-do and areas of improvement lists (see Step #2, Principle #4). The areas with the lowest progress should indicate which of the topics listed by members should be added to the agenda and which can be left out. For example, if you’re making the slowest progress on “increasing sales,” make sure this is added to the agenda first.

How to Create an Effective Weekly Meeting Agenda

While Lencioni emphasizes that weekly meeting agendas should only be created at the start of the meetings with all members involved, many experts argue that agendas should be created and distributed to members in advance. In Traction, Gino Wickman explains that pre-established agendas provide consistent structure to meetings that increase productivity.

Furthermore, while Lencioni advises creating agendas at the start of meetings to allow for real-time collaboration when choosing discussion topics, Wickman’s pre-established meeting agenda still allows time for this.

Wickman explains that weekly meeting agendas should use the following format:

• Spend the first five minutes having members share good news.

• Identify how much progress you're making toward each of your goals. This corresponds to Lencioni’s advice to discuss progress toward items on your areas of improvement and to-do lists.

• Mark goals that are off track for later discussion.

• Discuss customer reviews, positive and negative, and mark negatives for later discussion.

• Discuss short-term to-dos that were identified at the previous weekly meeting to make sure they were followed through on and were effective. This will enforce accountability and productivity.

• Address the issues that you marked for “later discussion” in the previous steps. The solutions you’ve identified to these problems should be put on a to-do list to be discussed at the next meeting in Step 5.

• Conclude the meeting by reviewing what needs to get done and who needs to do it, identifying what needs to be communicated to employees, and having each member rate the productivity of the meeting from one to 10.

#3: Strategic Meetings

At least once a month, the team should gather for two to four hours to discuss critical, complex issues the organization is facing—for example, major changes in revenue, finances, the industry, or competition. During the meeting, the leader must first explain each issue and its major components. Then, the team should brainstorm all possible solutions, debate the pros and cons of each solution, and come to a concrete decision that every member commits to before the meeting ends.

(Shortform note: In Traction, Gino Wickman presents an alternative method for solving issues during strategic meetings. His method, called the ‘Issues Solving Track,’ has three major steps: identify, discuss, and solve. First, you must identify the issue by determining its type—either a problem to be solved, information to be shared and agreed upon, or an idea that needs feedback—and its source. Second, discuss the issue by encouraging people to share their ideas, as Lencioni suggests, and halting tangents when they arise. Third, solve the issue by keeping in mind the following tips: When members disagree, the majority is usually wrong; hear from all first-hand parties before acting; act in the company’s best interest; and face the most daunting issues first.)

#4: Developmental Meetings

Once every quarter, the team should meet for one to three days off-site to discuss the fundamentals of their organization’s health and standing—specifically, to evaluate their success strategies, short-term goal, employee performance, and cohesion (including that of the leadership team). They should also discuss changes in the industry, like new competition. This is the time when new short-term goals should be developed, success strategies should be altered if necessary, and plans to improve the organization’s overall health should be made.

Creating a Quarterly Meeting Agenda

While Lencioni suggests the general topics to discuss during quarterly meetings, he doesn’t lay out a specific agenda for discussing these topics. In Traction, Gino Wickman recommends using the following agenda to ensure that quarterly meetings are productive and progress the company’s goals:

• Open the meeting. Each member should reflect on the last 90 days and share good and bad news, what’s working and not working, and their expectations for the meeting.

• Review the previous quarter. Review financials, as well as the priorities of each leadership team and the company as a whole. Then, record which priorities were and weren’t achieved. Priorities that weren’t achieved should either be reassigned to the next quarter or put on a two-week to-do list if they’re close to completion.

• Review the company’s vision. In this step, Wickman recommends that members review what Lencioni refers to as the company’s core purpose and short-term goal. Afterward, compile a list of any barriers that prevent you from achieving your goal—for example, financial issues, competition, poor marketing, and so on.

• Determine this quarter’s priorities. This step mirrors Lencioni’s advice to set a new short-term goal or adjust your areas of improvement and to-do list. Wickman recommends narrowing your to-do list down to three to seven items that should be accomplished over the next quarter.

• Make a plan. Determine who needs to do what and whether there’s any new information that should be communicated to employees.

• Review the meeting. Each member should share how productive they think the meeting was from one to 10, whether their expectations from Step 1 were met, and any other feedback on the meeting they have.