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The Advantage: Why Organizational Health Trumps Everything Else In Business Hardcover – March 13, 2012
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Checklist for Organizational Health
Members of a leadership team can gain a general sense of their organization's health and, more important, identify specific opportunities for improvement by completing the following checklist.
Discipline 1: Build a Cohesive Leadership Team
- The leadership team is small enough (three to ten people) to be effective.
- Members of the team trust one another and can be genuinely vulnerable with each other.
- Team members regularly engage in productive, unfiltered conflict around important issues.
- The team leaves meetings with clear-cut, active, and specific agreements around decisions.
- Team members hold one another accountable to commitments and behaviors.
- Members of the leadership team are focused on team number one. They put the collective priorities and needs of the larger organization ahead of their own departments.
Discipline 2: Create Clarity
- Members of the leadership team know, agree on, and are passionate about the reason that the organization exists.
- The leadership team has clarified and embraced a small, specific set of behavioral values.
- Leaders are clear and aligned around a strategy that helps them define success and differentiate from competitors.
- The leadership team has a clear, current goal around which they rally. They feel a collective sense of ownership for that goal.
- Members of the leadership team understand one another's roles and responsibilities. They are comfortable asking questions about one another's work.
- The elements of the organization's clarity are concisely summarized and regularly referenced and reviewed by the leadership team.
Discipline 3: Overcommunicate Clarity
- The leadership team has clearly communicated the six aspects of clarity to all employees.
- Team members regularly remind the people in their departments about those aspects of clarity.
- The team leaves meetings with clear and specific agreements about what to communicate to their employees, and they cascade those messages quickly after meetings.
- Employees are able to accurately articulate the organization's reason for existence, values, strategic anchors, and goals.
Discipline 4: Reinforce Clarity
- The organization has a simple way to ensure that new hires are carefully selected based on the company's values.
- New people are brought into the organization by thoroughly teaching them about the six elements of clarity.
- Managers throughout the organization have a simple, consistent, and nonbureaucratic system for setting goals and reviewing progress with employees. That system is customized around the elements of clarity.
- Employees who don't fit the values are managed out of the organization. Poor performers who do fit the values are given the coaching and assistance they need to succeed.
- Compensation and reward systems are built around the values and goals of the organization.
Consulting executive Lencioni (The Five Dysfunctions of a Team) has an answer for floundering businesses—aim for organizational health. In other words, businesses that are whole, consistent, and complete, with complementary management, operations, strategy, and culture. Today, the vast majority of organizations have more than enough intelligence, experience, and knowledge to be successful. Organizational health is neither sexy nor quantifiable, which is why more people don't take advantage. However, improved health will not only create a competitive advantage and better bottom line, it will boost morale. Lencioni covers four steps to health: build a cohesive leadership team, create clarity, overcommunicate clarity, and reinforce clarity. Through examples of his own experiences and others', he addresses the behaviors of a cohesive team, peer-to-peer accountability, office politics and bureaucracy and strategy, and how all organizations should strive to make people's lives better. This smart, pithy, and practical guide is a must-read for executives and other businesspeople who need to get their proverbial ducks back in a row. (Apr.) (Publishers Weekly, 1/16/12)
From the Inside Flap
"Organizational health will one day surpass all other disciplines in business as the greatest opportunity for improvement and competitive advantage."
This is the promise of The Advantage, Patrick Lencioni's bold manifesto about the most unexploited opportunity in modern business. In his immensely readable and accessible style, Lencioni makes the case that there is no better way to achieve profound improvement in an organization than by attacking the root causes of dysfunction, politics, and confusion.
While too many leaders are still limiting their search for advantage to conventional and largely exhausted areas like marketing, strategy, and technology, Lencioni demonstrates that there is an untapped gold mine sitting right beneath them. Instead of trying to become smarter, he asserts that leaders and organizations need to shift their focus to becoming healthier, allowing them to tap into the more-than-sufficient intelligence and expertise they already have.
The author of numerous best-selling business fables including The Five Dysfunctions of a Team and Death by Meeting, Lencioni here draws upon his twenty years of writing, field research, and executive consulting to some of the world's leading organizations. He combines real-world stories and anecdotes with practical, actionable advice to create a work that is at once a great read and an invaluable, hands-on tool. The result is, without a doubt, Lencioni's most comprehensive, significant, and essential work to date.
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What is the advantage? He defines it as a "healthy organization," which consists, basically, of systems that enforce good management practices based in psychology and science, clear and decisive values and purpose, and a well-oiled organizational machine for meetings and communication. This is—as he says—pretty simple stuff to understand, but it all needs to be done together to be effective, lest any one part short-circuit any other. Correct.
What else he got right:
- The overall premise. With improvement of people management, and a few easy-to-understand, basic concepts done well, vast improvement is possible.
- Most of the psychology of teams, individuals, and dysfunctions thereof. Especially in noting Attribution bias.
- Framing of performance reviews as a process for improvement, not as a means for, well, anything else.
- The idea that no one part, on its own, is the key to success—that you must look at the health of the whole organization.
- The clear outline of purpose, values, and alignment, and the no-nonsense discussion of the humanity thereof. Spot on.
Shaky ground (one star deducted for these purposes primarily).
- The whole discussion of Accountability. I'll write a bit about this, since it's a big misstep, even though few understand why. One gets the impression that this is an old concept of his that he hasn't fully developed, and that even he, the master of his own book, is uncomfortable with the premise. He should trust his own instincts! Accountability is the wrong concept, and in the entire chapter he wavers back and forth between various definitions and examples that don't support what he's saying and sometimes have nothing to do with the concept at all. What's the right way to look at accountability? Forget the concept entirely. Toss it in the trash. It's a useless concept grounded in ancient management practices of command-and-control, founded in the idea that punishment for sub-par work is the best way to motivate people. This is an idea that Lencioni himself disproves later on in the book, when he talks about performance management—the goal is always to improve, not to blame or punish, and Accountability ruins the trust necessary to improve. It conflicts with the rest of his model, and it's out of place because of it. I have a feeling the inconsistency will dawn on him soon, as it's clear from the rest of his model that he's very close to the whole deal.
- The—it's hard to describe—hubris, self-importance, the lack of humility shown in the whole model and his presentation of it. What he's landed on here is not all that new or original, as he implies it is. It's the same core concept that Deming landed on, and Ackoff, and Juran, and a few others. It contains elements of Lean management, of the Toyota way, of Peter Scholte's interpretation of Deming, and of many concepts from other systems thinkers and organizational modelers that have—albeit perhaps less accessibly—rounded out the same model that Lencioni has. He mentions none of them. He gives the impression that he's landed on all of these concepts all by himself, which is either true (someone observing reality can reach the same conclusions), or demonstrates either ignorance (unlikely) intentional simplification (perhaps) or willful disregard for the great management thinkers who came before him. No matter how you slice it, it's irritating.
As much as those minor flaws annoy me, this is, overall, a mostly right-side-up view of organizations and how to work them, with a whole lot of positive ways of thinking that would help many a company work better and, as W. Edwards Deming said, to find "joy in work" that is the true indicator of a healthy company. Managers and leaders would do well to read this and take its concepts to heart. It is, overall, a good intro to a series of learnings on the path to a more enlightened organization.
Your next reads, (the Big Kids' Bikes, if you will):
- The Leader's Handbook: Making Things Happen, Getting Things Done (absolutely essential)
- Team of Teams: New Rules of Engagement for a Complex World (an alternative model, with much more insight and innovative thought)
- The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer (how to really drive a "healthy organization" with a systems view)
- Dr. Deming: The American who Taught the Japanese About Quality (a deep dive on Deming, who is the true father of the "holistic organization" systemic health that Lencioni talks about)
- Thinking in Systems: A Primer (how to think about organizational—and any other—systems, in concrete and useful terms)
This is the right way to proceed. Get started with Lencioni if you like his style, and don't stop there. Good luck.
By Patrick Lencioni
Patrick Lencioni is a proven master of the business fable--a short story that provides a lesson that can be applied to the business world. His numerous bestsellers, "The Five Dysfunctions of a Team," "Death by Meeting," and "Silos, Politics and Turf Wars," among others, each focus on providing the reader with a lesson on a particular business topic.
In his latest book, "The Advantage: Why Organizational Health Trumps Everything Else in Business," Lencioni pulls together the many separate themes of his previous works and weaves them into a comprehensive business theory. And despite his expertise as a storyteller, in this book he chooses not to use the business fable.
Perhaps the fable format is not extensive enough to meet his needs. Whatever the reason, the insight and strength of this book prove that he made the right choice. The result is first-rate writing that supports discerning insights about the essentials factors for business success.
The opening line in the first chapter captures the premise of the book, "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 everyone who wants it."
Organizational health is readily accessible, the author argues, but most organizations choose to be smart rather than healthy. Smart may include a great marketing plan and cutting edge technology. It focuses on "tweaking the dials," in these and other areas, rather than on overall health of the organization. Studying spreadsheets and financial statements is relatively safe, Lencioni suggests, unlike the messier, unpredictable ways of establishing the health of the organization.
The healthy organization is the victim of three strong biases: The Sophistication Bias (organizations often ignore that which is simple and straightforward); The Adrenaline Bias (most leaders suffer from chronic adrenaline addiction, the stress rush of fighting fires every day); and The Quantification Bias (the difficulty of measuring it in financial terms).
Lencioni suggests there may be a fourth reason for such bias: no one has ever presented it as a simple, integrated discipline. In doing so for the first time, the author believes that it is the practice that will surpass all other disciplines in creating competitive advantage.
This foremost advantage, organizational health, is about integrity, Lencioni says. Integrity in this context is defined as an organization that is whole, consistent and complete, "when its management, operations, strategy, and culture fit together and make sense."
Health can be recognized by reading the signs within an organization that include, minimal politics, low confusion, strong morale, high productivity and very low turnover.
The author suggests an organization becomes healthy in much the same way as a couple builds a strong marriage or family--"it's a messy process." It involves doing several things at once.
He outlines four disciplines to do this:
* Discipline 1: Build a Cohesive Team. The leaders of any group, whether a church, school, or international corporation must build trust, master conflict, achieve commitment, embrace accountability and focus on results. "Teamwork is not a virtue," Lencioni says. "It's a choice."
* Discipline 2: Create Clarity. Six questions help to clarify, including, "why do we exist? What do we do? Who does what? "What is new is the realization that none of them can be addressed in isolation; they must be answered together," the author says. "Failing to achieve alignment around any one of them can prevent an organization from attaining the level of clarity necessary to become healthy."
* Discipline 3: Overcommunicate Clarity. Clearly, repeatedly and enthusiastically give the answers created to help clarify. There is no such thing as too much communication.
* Discipline 4: Reinforce Clarity. Critical systems must be implemented to reinforce clarity in every process. Every policy and program should be designed to remind employees what is really important.
The book also contains practical structures gathered from Lencioni's previous books. For effective communications, for example, a healthy organization deals in daily check-ins, weekly tactical staff meetings, monthly strategic meetings, and offsite meetings.
The author's enthusiasm is more than compelling; it is contagious. "Is this model foolproof?" he asks about the healthy organization. "Pretty much," is the response. If leaders are aligned around a common set of answers, communicate those answers repeatedly, put effective processes into place that reinforce them--they effectively "create an environment in which success is almost impossible to prevent. Really."
That would indeed be a healthy organization.