Most leaders understand that their organizations need to be smart. Smart organizations have sound strategies, effective marketing, forward-thinking technology, and follow other fundamental business practices. No one doubts that these essentials are critical to success. However, being a smart organization is no longer enough for significant viability.
Patrick Lencioni, best-selling author of The Advantage (2012) and The Five Dysfunctions of a Team (2002), says “Being smart is only half the equation. The other half of the equation, the one that is largely neglected, is about being healthy.” Lencioni describes a healthy organization as one that is “whole, consistent, and complete, that is, when its management, operations, strategy, and culture fit together and make sense.”
Healthy means that its cultural environment:
- has minimal politics and confusion;
- egos do not get in the way of collaboration and productivity;
- and communication and emotional intelligence are high, as is morale.
Okay, you may be thinking this all sounds lovely and Zen-like, but you still have to meet deadlines and produce. After all, you probably do not have a line item on your financials measuring trust in the workplace, skillful communication, or leadership through interpersonal mastery.
Healthy organizations have a definite competitive advantage! A few of these advantages include:
- less dysfunction getting in the way of adapting to change and executing solutions,
- capacity to tap into the organization’s intellectual capital rather than spending time and energy on drama and conflict,
- happier and more motivated people,
- increased teamwork,
- higher trust,
- less waste,
- low turnover among good employees, and
- financial savings.
Lencioni states in The Advantage (2012), “After two decades of working with CEOs and their teams of senior executives, I’ve become convinced that the seminal difference between successful companies and mediocre or unsuccessful ones has little, if anything, do with what they know or how smart they are; it has everything to do with how healthy they are. But if someone was to press on me which of the two characteristics of an organization, intelligence or health, should receive first priority, I would say without hesitation that health comes out a clear number one.”
As Peter Drucker eloquently explained, “Culture eats strategy for breakfast.” Strategy does matter, but the competitive advantage defaults to healthy organizations.