I am reading an interesting book at the moment called The Advantage – Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni.
Lencioni's argument is that too many companies – and their executive teams - are limiting their search for competitive advantage to conventional and largely exhausted areas like marketing, strategy, and technology. Instead Lencioni argues that if the focus was shifted into making organisations healthier, then they would be able to tap the expertise and intelligence they already have.
Lencioni has a Four Disciplines Model for this. Stage one is called Building a Cohesive Leadership Team, and has an instructive, and relevant case study to demonstrate what happens when this does not occur.
The leadership team of an international pharmaceutical company sees sales declining, and decides to cut costs by declaring a moratorium on all first and business class travel.
There is no debate around this decision, with the assembled executives in the leadership team merely nodding their heads in agreement.
Half the executives then go to their teams and give them the unpopular order to change the way they travel. The other half tell their teams to ignore the decree. When people in the organisation begin to notice the discrepancy in behaviour between the departments, anger and frustration breaks out.
Lencioni sees this as an example of not achieving real commitment (ie: not having a cohesive leadership team). He sees it as a result of the leadership team not engaging in healthy conflict, and the cost is not only the financial cost of people continuing to fly business class, it is also the loss of credibility that executives encountered afterwards and the internal politics they created by failing to achieve active commitment around the decision.
Lencioni's solution to this is that instead leadership teams should argue decisions such as this through to achieve what Intel the microchip manufacturer used to call “disagree and commit”