The Four Obsessions of an Extraordinary Executive
I've scoured the web looking for an excellent summary of this, one of my favourite books. I believe Kevin Neuner has done an incredible job. Please see below and check out his other studies.
"If everything is important, then nothing is.
I believe that all successful organizations share two qualities: they are smart, and they are healthy. An organization demonstrates that it is smart by developing intelligent strategies, marketing plans, product features, and financial models that lead to competitive advantage over its rivals. It demonstrates that it is healthy by eliminating politics and confusion, which leads to higher morale, lower turnover, and higher productivity.
As important as both of these topics are, I have found that most leaders spend the majority of their time and energy making their organizations smarter, with relatively little effort directed toward making them healthier. This is understandable considering the predominant focus of business schools and business media. It is regrettable, however, when one considers the powerful and unique attributes of organizational health.
First, healthy organizations have a way of making themselves smarter. Even if their ideas are temporarily inferior to those of competitors, they are usually humble and efficient enough to recognize their deficiencies and make changes in their plans before it’s too late. On the other hand, plenty of anonymous and forgotten companies have squandered intellectual advantages because of infighting, lack of clarity, and other problems that plague unhealthy organizations.
Second, healthy companies are far less susceptible to ordinary problems than unhealthy ones. During difficult times, for instance, employees will remain committed to a healthy organization and stay with it longer, ultimately working to reestablish competitive advantage.
Finally–and this point is critical–no one but the head of an organization can make it healthy.
… And so, as odd as it may seem, it is actually more important for leaders to focus on making their organizations healthy than on making them smart.
But don’t misunderstand me. Not for a second am I saying that issues like strategy, product innovation, and marketing are unimportant. They are indeed critical and deserve a great deal of mindfulness from any executive team. It’s just that these topics receive a widely disproportionate amount of attention from well-meaning and intelligent executives who somehow cannot find the time and energy to focus on making their organizations healthy.
Why does this happen? Because organizational health is relatively hard to measure, and even harder to achieve. It feels soft to executives who prefer more quantitative and reliable methods of steering their companies. It also entails a longer lead time to implementation than does a technical or marketing strategy, which yields more immediate results and gratification.
But perhaps most important of all, organizational health is often neglected because it involves facing realities of human behavior that even the most committed executive is tempted to avoid. It requires levels of discipline and courage that only a truly extraordinary executive is willing to embrace."
(from the INTRODUCTION)
In Lencioni parable form, he takes us through the story of two competing companies; one healthy, one smart. With drama, twists, and turns, the contextual nature of his writing really highlights the principles in “real-life” circumstances. Excellent, as always. Here are a few tidbits I picked up along the way:
The first area “which had a profound connection to each of the four disciplines, was the hiring of new employees.” (20)
Three of the firms values in hiring people were “humble, hungry, and smart.” (25) Humility, of course being an absence of pride, hubris, or self-aggrandizement, hungry, being a drive to perform (an mule’s work ethic), and smart being well educated, etc.
“…letting more than three months go by between formal feedback sessions was irresponsible.” (31)
“Senior people should get less rope, because in the process of hanging themselves, they snag other people too.” (33)
“Identity is about the company’s hiring values and its underlying motivation.” (103)
“The minute you make any of this [the four disciplines] feel like a marketing campaign, it loses its ‘groundedness.’ It starts to feel like a slogan more than a reality.” (112)
The first area “which had a profound connection to each of the four disciplines, was the hiring of new employees.” (20)
“Structure has to do with human systems and operations–things like interviewing and hiring people, managing their performance, rewarding them, and letting them go.” (122)
“These disciplines didn’t seem accessible … After all, [we] don’t go into business so he could referee executive team meetings and deliver employee orientation. Vince loved strategy and competition, and that was it.” (132)
Organizational Health: The Model
"The first step is to embrace the idea that, like so many other aspects of success, organizational health is simple in theory but difficult to put into practice. It requires extraordinary levels of commitment, courage and consistency. However, it does not require complex thinking and analysis; in fact, keeping things simple is critical."
DISCIPLINE ONE: BUILD AND MAINTAIN A COHESIVE TEAM
“Building a cohesive leadership team is the most critical of the four disciplines because it enables the other three. It is also the most elusive because it requires considerable interpersonal commitment from an executive team and its leader.” (140)
"Politics is the result of unresolved issues at the highest level of an organization and attempting to curb politics without addressing issues at the executive level is pointless. Although most executives are aware of the existence of some political behavior within their teams, they almost always underestimate its magnitude and the impact it has on the company and its people.
This blindness occurs because what executives believe are small disconnects between themselves and their peers actually look like major rifts to people deeper in the organization. And when those people deeper in the organization try to resolve the differences among themselves, they often become engaged in bloody and time-consuming battles, with no possibility for resolution. And all of this occurs because leaders higher in the organization failed to work out minor issues, usually out of fear of conflict.
The commonness and severity of this problem make the point worth repeating. When an executive decides not to confront a peer about a potential disagreement, he or she is dooming employees to waste time, money, and emotional energy dealing with unresolvable issues. This causes the best employees to start looking for jobs in less dysfunctional organizations, and it creates and environment of disillusionment, distrust, and exhaustion for those who stay."
Cohesive teams, on the other hand resolve their issues and create environments of trust for themselves, and thus for their people. They ensure that most of the energy expended in the organization is focused on achieving the desired results of the firm. What is more, I have found that outstanding employees rarely leave these organizations. (143-4)
Cohesive teams are “efficient.” They arrive at decisions more quickly and with greater buy-in. (144)
“One of the best ways to recognize a cohesive team is the nature of its meetings. Passionate. Intense. Exhausting. Never boring. For cohesive teams, meetings are compelling and vital. They are the forums for asking difficult questions, challenging one another’s ideas, and ultimately arriving at decisions that everyone agrees to support and adhere to, in the best interests of the company. (144)
Finally, cohesive teams fight. But they fight about issues, not personalities.
HOW? The most important activity is the building of trust, and one of the best ways to do this is what I call “getting naked,” … a general process of getting to know one another at a level that few groups of people–unfortunately, even many families–ever achieve. (146)
“A key part of building trust is about living through difficult times. Like a marriage or any other meaningful relationship, the only way to build strength is to share experiences that require everyone to rally and overcome obstacles.” (147)
DISCIPLINE TWO: CREATE ORGANIZATIONAL CLARITY
WHY? “Because it provides employees at all levels of an organization with a common vocabulary and set of assumptions about what is important and what is not. More important, it allows them to make decisions and resolve problems without constant supervision and advice from managers. Essentially, organizational clarity allows a company to delegate more effectively and empower its employees with a true sense of confidence.” (151)
“An organization that has achieved clarity has a sense of unity around everything it does. … The result is an undeniable sense of focus and efficiency. … Employees in these organizations seem to have amazing levels of autonomy.
WHY DON’T ALL EXECUTIVES CREATE CLARITY? “Many of them overemphasize the value of flexibility. Wanting their organizations to be ‘nimble,’ they hesitate to articulate their direction clearly, or do so in a less than thorough manner, thus giving themselves the deceptively dangerous luxury of changing plans in midstream.” (153) Ironically, truly nimble organizations dare to create clarity at all times, even when they are not completely certain about whether it is correct. And if they later see a need to change course, they do so without hesitation or apology, and thus create clarity around the new idea or answer.” (154)
“The key is that any given point in time, a healthy organization can point to an unambiguous answer for each question. … One key is focusing on the essence of each question and not getting bogged down by the temptation to wordsmith the answers.” (155)
Why Does the Organization Exist?: The challenge with this question is convincing a skeptical executive team that its answer has relevance for the organization and for the daily activities of employees. Though it may seem at first esoteric, it sets the stage for almost every decision the organization makes. (156)
What Behavioral Values?: The key to answering this question lies in avoiding the tendency to adopt every positive value that exists. …all things good are not necessarily essential. (157)
fundamental values are not chosen from thin air based on the desires of executives; they are discovered within what already exists in an organization. [VIA: Which is why the “who” question is so fundamental and of utmost importance and priority; because “who” will always bring the “what” of values.]
One way to identify fundamental values is to think about the two or three employees whom they believe best embody what is good about the firm. Then write down one or two adjectives that describe the employees listed. Then, list one or two employees that have left, or should leave, because of their behavior or performance. (158) The wrong way to determine an organization’s values is to survey the employee population. This may seem to be a useful way to test a hypothesis, but it is not a replacement for the introspection and discussion of an executive team. (158)
What Business Are We in?: I believe that a company cannot be called great if virtually every employee, and certainly every executive, cannot articulate the basic definition of what the company does. (159) BTW, that word mission often creates confusion. If so, stop using the term altogether and come up with a different term instead. Why articulate exactly what it does, whom it serves, and against whom it competes? Because all employees should be made to feel like salespeople or ambassadors for the firm, and they cannot do this without a fundamental understanding of an organization’s business.
How Does Our Approach Differ?: Essentially this is a strategy question, and there is no clear and simple definition of what it means. The key is taking the time to look at all of the decisions that the company has made, even the obvious ones, and identify those that, when combined, make the company uniquely positioned for success. (161)
What Are Our Goals?: At the highest level, an organization should have one or two basic thematic goals for a given period with a goal to rally employees, regardless of their specific jobs, around a common direction. “This is the year that our organization will…” (161-2) Beneath a thematic goal there should be major strategic goals that span the organization and support its overall theme. … Like so many other aspects of clarity, the key here is to focus on the areas that matter most and to avoid making every possible topic an area of equal importance. … Within each of these goals, an organization must be explicit. (162) Finally, the strategic goals need to be aligned with an organization’s permanent measure of success, which are metrics, quantitative objectives related to permanent topics like revenue, expenses, profit, employee turnover, employee satisfaction, and productivity. (163)
Who Has To Do What?: One of the greatest problems that organizations encounter when it comes to achieving clarity is the inability to translate company goals into concrete responsibilities for members of an executive team. (164) “Clear deliverables.” Each strategic goal will have many sub goals, and ownership for each of those should be explicit. (165)
DISCIPLINE THREE: OVER-COMMUNICATE ORGANIZATIONAL CLARITY
“This is the simplest of the four disciplines, but tragically, the most underachieved. Why is this tragic? Because after having done all the work associated with disciplines one and two, it is a shame not to reap the benefits of those achievements. Especially when it is so simple.” (166)
“Employees in healthy organizations may joke, or sometimes even complain, about the volume and repetition of information that they receive. But they’ll be glad that they are not being kept in the dark about what is going on.” (166)
Repetition: The issue here has to do with the fear of repetition; not wanting to underestimate the intelligence of their audience and making the dangerous assumption that once a message has been heard, it is both understood and embraced by employees. Other executives complain because they are bored with a message after communicating it once or twice and want to move on to solve the next problem. Some experts say that only after hearing a message six times does a person begin to believe and internalize it.
This problem is extremely common in organizations where I have worked. Almost without exception, executives lament having to repeat the same “tired” messages. In the next breath, they complain that employees are not hearing and acting on the messages they communicate. (169)
Key: get use to saying the same things again and again, to different audiences, and in slightly different ways. Whether they are bored with those messages is not the issue; whether the employees understand and embrace them is. (169)
Simple Messages: Avoid overcomplicating key messages. That is not to say that employees are simple people, but rather that they are inundated with information every day. What they need from leaders is clear, uncomplicated messages about where the organization is going and how they can contribute to getting there. (169)
Multiple Mediums: Relying on one or two channels of communication within an organization will guarantee that some parts of the employee population will miss key messages. This is because employees also have preferences about the way they receive information. Live communication provides opportunities for meaningful interaction and emotional context. E-mail allows for more extensive information to be received and maintained for later review.
In spite of the validity of each of these mediums, there is one form of communication that I have found to be the most powerful and underused within organizations of all sizes, from twenty-five to ten thousand employees. I call it cascading communication. The key is to take five minutes at the end of staff meetings and ask the question, “What do we need to communicate to our people?” After a few minutes of discussion, it will become apparent which issues need clarification and which are appropriate to communicate.
DISCIPLINE FOUR: REINFORCE ORGANIZATIONAL CLARITY THROUGH HUMAN SYSTEMS
“Build a sense of clarity into the fabric of the organization through processes and systems that drive human behavior.” (173) The challenges lie in doing this without creating unnecessary bureaucracy.
Hiring Profiles: Look for qualities that match the values of the company. Then ask behavioral questions and probe for evidence that the candidate has the potential to fit within the organization. After interviews take place, interviewers debrief with one another, paying special attention to the assessments of colleagues regarding the candidate’s alignment with fundamental values. (175)
Performance Management: Identify opportunities for growth and development, to constantly realign their work and behaviors around the direction and values of the organization at large. Performance management is about communication and alignment. Two main misapplications. Systems are too complex (endless and complicated forms and numerical assessments), and any sense of real management communication and coaching is lost among the instructions and requirements. Another common problem is “off-the-shelf systems. The best performance management systems include only essential information and allow managers and their employees to focus on the work that must be done to ensure success. What is more, these systems are customized to provoke meaningful discussion between managers and employees about relevant issues that they are dealing with on a daily basis. Finally, it’s about ongoing dialogue around how employees can align their behaviors around the organization’s clarity.
Rewards and Recognition: This system has to do with the manner in which organizations reinforce behavior. Healthy organizations eliminate as much subjectivity and capriciousness as possible from the reward process by using consistent criteria for paying, recognizing, and promoting employees.
Dismissal: Healthy organizations use their values and other issues related to organizational clarity to guide their decisions about moving employees out of the company. It helps companies avoid making arbitrary decisions about an employee’s suitability for remaining within the organization.
There is nothing more important than making an organization healthy. Second, there is no substitute for discipline. (180)