Organizational Health: How It Can Drive Your Practice's Success

Organizational health is the most important competitive advantage for any business, regardless of industry, yet it's "largely untapped" by American businesses. So says Patrick Lencioni, bestselling author of business management books and the keynote speaker Tuesday at MGMA12 in San Antonio.

"Too many companies think it's beneath them" to take the steps necessary to create a highly functional organization, which is characterized by high morale, low turnover, and minimal office politics and confusion among staff, Lencioni said. To succeed, any organization has to be both smart - from a strategic, marketing, and technology standpoint - and healthy.

Because the items on the "smart" side of the ledger tend to be the kinds of straight business problems that executives are comfortable addressing, and because achieving organizational health is hard to measure and involves emotional maturity and nuanced leadership, organizations tend to stick to the "smart" side. The dynamic reminds Lencioni of a person who looks for a lost item in whatever room has the best light, even knowing he lost it somewhere else.

It's human to want to work on the problems that you're comfortable solving, but "the best companies aren't 'smart' ones," Lencioni said. "They're the ones that eliminate confusion and politics."

Lencioni, making the case he puts forward in his latest book, "The Advantage," said that a healthy organization has several principle components. It starts by building a cohesive leadership team. That doesn't mean leaders always speaking with one voice. In fact, he said, "consensus is a four-letter word," because consensus is usually arrived at through a series of compromises that makes no one happy. On the contrary, good leaders have enough trust in each other to disagree - sometimes hotly but never disrespectfully, without calculating the political cost of speaking up. "When there's trust, conflict is a search for truth," he said. "Without trust, it's political."

Once conflict clears and a decision is reached, healthy organizations act quickly and commit to their decisions. They then hold each other themselves accountable for achieving results.

Such organizations also create, over-communicate, and then reinforce clarity. Healthy organizations need to be clear about who they are and where they're going, and they need to make sure that their leaders and employees are clear, too. To do that, they have to ask basic questions about themselves, like "Why do we exist?" and "How will we succeed?"

They don't fear to say the important things over and over. "Research says that people have to hear something seven times before they start to believe it," Lencioni said. "Nobody ever left an organization because they felt communicated with too often and too clearly."

Finally, healthy organizations strive to reinforce clarity. Arguing that employees need less to be instructed on the things they don't know than reminded about the things they do know, especially the organization's core values, Lencioni said that leaders "need to be the CROs of our own organizations - the chief reminder officers."