Organisational Health

Organisational health is Patrick Lencioni’s term for the half of a business almost nobody works on. The smart half is strategy, marketing, finance and technology — the things that get studied, measured and argued about. The healthy half is minimal politics, minimal confusion, high morale and low staff turnover. His argument is that health is the larger opportunity, because every competitor you have is working on the smart half and very few are working on the other one.

A good strategy run by a confused team returns very little.

What does organisational health mean?

Lencioni’s four measures are commercial ones: politics, confusion, morale and staff turnover.

Politics is people making decisions based on what is good for them rather than what is good for the business, and it grows wherever the rules are unclear or unequally applied. Confusion is people spending effort on the wrong thing because nobody told them which thing was right. Morale and turnover are the price you pay for the first two.

The four disciplines

Build a cohesive leadership team — one that argues properly in the room and leaves it aligned. Create clarity, by answering a small number of questions the same way. Overcommunicate that clarity, well past the point where you personally are bored of saying it. Then reinforce it through the human systems: hiring, induction, one-to-ones, performance conversations and the standing agenda of your meetings.

The six questions

Clarity means six answers that every member of your leadership team gives the same way.

• 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?

The fifth does most of the damage when it is missing. A business cannot survive four senior people each pursuing a different single most important thing, because everything below them then pulls in four directions and none of it finishes.

How the problem shows up

Health problems tend to show up as something else:

• Decisions get made twice — once in the meeting, then again afterwards in a smaller conversation with whoever decides.
• Nothing finishes. Initiatives start with energy and are quietly abandoned the moment a different priority arrives from a different direction.
• People check upwards before acting on things well inside their remit, because the rules have changed before without warning.
• The same complaint reaches you from two departments about each other, and both versions sound entirely reasonable.
• Good people resign without another job to go to.

Each of those has a cost you can put a figure against, and none of them appears on a management report.

How to use it

Ask your senior people the six questions separately, in writing

Collect the answers before anybody sees anyone else’s. The gaps between the answers show where the health problem is.

Settle question five first

Choose one thing, for one quarter, that everybody can name.

Audit your last leadership meeting for disagreement

Teams that do not argue in the meeting argue afterwards in smaller conversations, and that is where politics starts.

Say the priority again, in three different places

The all-team update, the one-to-ones, and the way you open your own week. Lencioni’s point is that leaders tend to stop repeating a message at roughly the moment the organisation starts to hear it.

Change one human system to match

Add the priority to the standing agenda, to the one-to-one template, or to how you interview.

Count what your unplanned leavers cost

Take the people who left in the last two years without you wanting them to, and add up recruitment, lost output and the time it took each replacement to become useful.

Common mistakes

The first mistake is treating health as morale and trying to fix it with events. Health is structural: whether people know what matters, whether the rules apply to everybody, and whether the leadership team can disagree in a room and leave with one position.

The second mistake is assuming a quiet leadership team is a healthy one. Silence in a senior meeting often means people have decided not to raise the disagreement.

The third is working on the smart half because it is more enjoyable and easier to measure, while the difficult conversation with your second in command keeps moving down the diary.

Questions to ask yourself

• Out of 10, how confident are you that your senior people would give the same answer to what is most important right now?
• Where in your business are decisions currently being made on the basis of what is good for the person making them?
• When did your leadership team last disagree in front of each other, and what happened afterwards?
• What has your staff turnover cost you in the last two years, once you count recruitment, lost output and the time a replacement takes to become useful?

This sits underneath the systems and scale work in Business Coaching. The Planning Hierarchy is the mechanism that turns question five into a quarter everybody can name, and The Performance Matrix is how you deal with the individual whose behaviour is quietly setting the rules for everyone else.