Tuesday, August 21, 2012

Teams, Being Smart Isn't Enough! You Have to Be Healthy

Some notes from hearing Patrick Lencioni at The Leadership Summit in August... 

Lencioni started by saying that much of what he was going to share were things we all already know, and quoted Samuel Johnson, saying "People need to be reminded more than they need to be instructed."

For the second time during the conference, I heard someone talk about Southwest Airlines (the first time was by Jim Collins). Lencioni started his talk, as he starts his new book The Advantage, by sharing a story from Southwest Airlines. For those who don't know, Southwest is the most successful airline, in a very competitive field, when looking at financial consistency (143 consecutive profitable quarters, including the only major airline to do so following 9/11), and customer satisfaction (consistently at the top for lowest customer complaints, most on-time flights and fewest baggage problems).

Lencioni was at a leadership event at Southwest listening to presentations detailing Southwest’s values (the ‘Southwest Way’ - a Warrior Spirit, a Servant’s Heart, and a FunLUVing), their unorthodox approach and the things they do to make their customers happy. He was sitting next Southwest CEO Gary Kelly. Lencioni leaned over and asked, "Gary, why don't your competitors do any of this." It was a rhetorical question, but he said, "Honestly, I think they think it's beneath them."

Building a Heathly Organization
Organizational health is the single greatest competitive advantage in business. It is virtually free and accessible to any leader who wants it, and yet it remains ignored by most leaders and virtually untapped in many organizations. Too many leaders think it's beneath them. It's not measurable enough. Not immediate enough, not push-button results.

To better understand why this is, Lencioni used contrast. In order to maximize success and to be the best, there are two requirements for success. You have to do things well in these two categories:

Be Smart

Be Healthy


Minimal Politics


Minimal Confusion


High Morale and Productivity


Low Turnover

Being Smart is all good stuff. You should be solid in the areas of strategy, marketing, finance, and technology. It's only half of what a company needs to be successful, but gets about 98% of leaders attention. We are more comfortable with those things that are easier to measure and less emotional. But to change organizations you have to make them healthier!

Southwest is fabulous, not because they are smarter than their competitors, but because Southwest is so healthy as an organization. They get so much more out of their number of employees than their competitors do.

CEO's want to improve their companies, but it's like a classic scene from I Love Lucy. In the scena, Lucy is on her hands and knees looking at the carpet in the living room. Ricky comes in and asks what she's doing.
"Looking for my earrings," she replies. 
"Did you lose them here in the living room?" 
"No, I lost my earrings in bedroom, but the light out here is so much better."
CEO's know they are missing some things on the human, touchy-feely right side, but they are out of their comfort zone in dealing with them, so...they gravitate back to the left side. They focus even more on strategy and technology, etc. But the truth is, if we want to change the organization, we have to make it healthier.

Thirty years ago, the Smart side was new. There were lots of gains to be made by focussing on that side. But now, you can't distinguish your company by focussing only on the Smart side. You can have lots of great people working at your company, and they can all have the domain expertise to be awesome. But you won't be able to tap into it. You won't bring out their potential. Southwest's people aren't smarter than their competitors. But they use every bit of knowledge they have.

Organizational health is the multiplier.

The next post will be on "How do we do it?"

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