The Mercury News

STRIVE TO ACHIEVE

Organizati­onal health requires having a reason to exist beyond making money

- By Seung Lee slee@bayareanew­sgroup.com

Patrick Lencioni is not enamored with the Steve Jobs and Elon Musk types of Silicon Valley CEOs.

Rather than getting hung up on the superstar visionary CEO, which the tech industry has in spades, Lencioni prefers a more humble, off-camera personalit­y for a successful CEO. Most important, Lencioni hopes that the CEO and other top executives of a company pay relentless attention to the firm’s organizati­onal health.

Lencioni is the founder of The Table Group, a Lafayette-based company that provides leadership consultati­on to CEOs and executives at companies with widely recognized brands, such as Intuit, Southwest Airlines and Chick-fil-A.

He has written 11 books about leadership and organizati­onal health, selling more than 5 million copies.

Lencioni delivered a speech in May at Santa Clara University, as The Table Group partnered with the Silicon Valley Executive Center in the university’s Leavey School of Business to teach students about the importance of organizati­onal health. This interview has been edited for length and clarity.

Q What brings you out to Santa Clara University?

A We have this concept called organizati­onal health, which we think is the biggest thing that is lacking in most companies. We’ve been looking for an academic home for this idea. We are going to partner with Santa Clara so that if Kellogg School at Northweste­rn is all about marketing, and Wharton at Penn is about finance and Harvard is about strategy, we want Santa Clara to be the home of organizati­onal health.

Q And for those unfamiliar, what is your definition of organizati­onal health?

A Organizati­onal health is about how to create the most effective organizati­on possible through teamwork among leadership team, clarity around where they are taking the company, constant communicat­ion about that

clarity and constant reinforcem­ent of every process it puts in place. The healthiest organizati­ons will generally win. Southwest Airlines is not smarter than their competitio­n, but healthier. And I’m sure United has more Ph.D.s and industry experts, but they are so dysfunctio­nal. Whereas Southwest puts nice, down-to-earth people in a room and makes great decisions. So I’m trying to figure out, how do you create a company that is not too political and not confused?

Q I understand that you also believe Silicon Valley is more lacking in organizati­onal health than other industries. Can you expand?

A Silicon Valley is uniquely challenged because people here have such emphasis on the smart and technical side of business. People often think it’s the smartest people who will rise to be successful. It’s actually the people who actually learned to work as a team and create a healthy culture who see most success.

There is a skepticism about these things, and Silicon Valley and Wall Street have it most. People attribute success to decision sciences, stuff like technology and strategy. Those are important, no doubt, but they are not enough. It’s hard to convince some Silicon Valley CEOs because they think it’s about the next piece of tech which is going to make them a billionair­e.

Q But in a way, some of the Silicon Valley companies who eschewed organizati­onal health became the most successful. Apple, for example. Steve Jobs used to encourage his executives to get confrontat­ional with each other and butt heads.

A There are some companies which succeed because of the force of will of the founder or the leader. But it’s so much work and so much less loyalty, and when things go bad there is a greater likelihood of people jumping ship. What Apple has done is remarkable. I don’t know what their culture exactly is because I have not worked with them. I don’t know what Tim Cook is like. But there are a lot of dead bodies and injuries (from the confrontat­ions). The question is — What could they have achieved had they been even more united and more cohesive as a team?

Q Silicon Valley has other companies with arguably poor organizati­onal health which have seen public scandals lately. Let’s take Facebook and its Cambridge Analytica scandal recently. Can you gauge what went wrong for Facebook?

A I can say that there is a certain amount of hubris and disregard of the social impact with what they are doing. To be a great team player, you need to be humble and you have to create humility. Humility is subservien­ce to your customers and to the market you serve. Companies are sometimes more self-impressed and more interested that they are kings of the world than how does this work. Facebook is interestin­g because studies find Facebook is not good for people. The question is — Does it bother them, or is it like, “Hey, we are making a crap load of money”? Are you concerned about the impact you are having on your customers? It’s things like that that humble organizati­ons would ask.

Q And Uber under former CEO Travis Kalanick? They were a lightning rod for controvers­y not so long ago.

A They acted like they were surprised when they were caught. And they were pursuing profit above all else. But you have to know why you exist and have a reason why you exist beyond making money to be successful.

Q What would you diagnose in general for most tech companies? Is Silicon Valley unique in its disregard for organizati­onal health?

A Outside of technology, people recognize and accept this concept more. I think the potential of getting rich, like IPO-ing, makes people here put up with a lot of crap that other people wouldn’t. It’s a shame, because most people aren’t going to get filthy rich at the end of the day. And frankly, the dayto-day experience of working at companies like that is going to be awful. In many ways, they have artificial­ly golden handcuffs. Misery at your job can be very costly.

Q This organizati­onal health concept seems to fit well for startups who start with a small headcount. What should startup founders recognize as they scale up their business?

A It’s definitely easier in a startup to do this. But larger companies said they want this, too. It’s harder to turn around a big company, but even larger companies are realizing the competitiv­e advantage of turning their organizati­on into a healthier one is great because turnover will go down, they are going to attract better people, and reduce internal infighting and politics.

When you start a company, you should express, “This is why we are starting this, and this is how our people will behave.” And then your strategy, market and products are probably going to change, but the core values won’t. If you change those things, you are essentiall­y doing a restart. And that’s what the exec team’s job is: How do we preserve the core of what we are?

 ?? HALEY NELSON — SPECIAL TO BAY AREA NEWS GROUP ?? Patrick Lencioni says that Silicon Valley businesses could benefit from developing a healthy work culture and a little humility.
HALEY NELSON — SPECIAL TO BAY AREA NEWS GROUP Patrick Lencioni says that Silicon Valley businesses could benefit from developing a healthy work culture and a little humility.

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