Models of Organizational Health

Organizational health is one of the most underutilized opportunities for growth and success in businesses today. Most organizations focus on more practical elements like strategy and finances, which are of course essential to having a successful business. But too often they ignore or tolerate deep dysfunction on the organizational health and culture side, and seem unaware of the huge costs they incur as a result. Patrick Lencioni, author and consultant, has a Four Disciplines Model that takes the ethereal “organizational health” and makes it tangible. Tony Hsieh, entrepreneur and founder of Zappos, created an organization with intentional cultural elements that set it apart from the average business. These two perspectives together highlight key elements of organizational health and cultural design that could revolutionize any organization. 

Lencioni’s first discipline is to build a cohesive leadership team. Strong unity and collaboration at the top yield incredible fruit throughout an organization; a dysfunctional team drags the whole company down with it. The lead team sets the tone for everything else, and Lencioni is wise to start here. Similarly, when Hsieh began his first forays into business, he formed startup teams with people he enjoyed and trusted. Their camaraderie and collaboration set the precedent for the organizations as they grew. In the case of LinkExchange, when the company grew rapidly and relationships became less intentional, it ceased to be a fun and exciting place for him to be and he ended up selling it and moving on to other things. Much of Hsieh’s organizational success overall is built on strong leadership teams; the cohesiveness of his teams that work well are established with mutual trust and a value on innovation and fun. Both approaches are solidly anchored in core values, but Hsieh’s and Lencioni’s values are different, as the next discipline shows.

The second Lencioni discipline is to create clarity. This involves being “intellectually aligned and committed to the same answers to six simple but critical questions.” Identifying what matters and having clarity and unity around that generates a clear runway for a business to take off. In Hsieh’s case, he often experienced great clarity of vision and purpose that united his startup teams in the early stages, but this clarity was eventually lost in the growth of LinkExchange. This was something he purposely sought to remedy as he launched Zappos and nurtured as it grew, with incredible results. The contrast here with Hsieh is that the clarity they shared happened through their mutual passion and relational capital. There is not an emphasis on specific missional or strategic clarity and unity, as Lencioni directs; rather, the “magic” of Hsieh’s leadership team building when it is working well is that it is built on a foundation of trust, grows more organically, and emphasizes innovation, fun, and enjoyability at work.

The third element of Lencioni’s Four Disciplines Model is to over-communicate clarity. The clarity experienced at the top of any organization tends to become muddier the farther down in the ranks it goes, which only worsens as it gets larger and more complex. Clarity must be fought for, and once obtained, communicated with great intentionality, consistency, and repetition. As confusion arises, it must be met with the same message, no matter who is answering. At Zappos, this is reflected in their company values: they value openness and honesty, emphasizing the need for intentional communication so everyone knows how what they do fits into the big picture. They want everyone to “go the extra mile in encouraging thorough, complete, and effective communication”. Throughout the story of the development of Zappos, clarity in communication is seen repeatedly and modeled well. Especially in the early days, Hsieh or other leaders would make decisions about what they needed to do to stay afloat for another month. A company-wide email would go out, which was really more of a rallying cry. They would cast vision, point people to their ultimate purpose and goal, and illustrate how the current decisions would get them where they wanted to go.

The fourth Lencioni discipline is to reinforce clarity. This may sound redundant, but Lencioni’s career as a consultant demonstrates its validity: fighting for clarity is the most important thing an organization can do to work toward being healthy and strong. This fourth discipline is about establishing a few simple but powerful systems that reinforce clarity in every process that involves people. Each element points people back to what is most important. This is where the practicality of maintaining an intentional healthy organizational culture is lived out in the daily rhythms of what is happening inside a company. For Hsieh, it was this level of intentionality that was lacking at LinkExchange, and what he sought to do differently at Zappos, with great success.

One interesting contrast I see in looking at these two models is that Hsieh has a high value on creativity and innovation as foundational elements of the culture, not just in the startup phases of LinkExchange and Zappos, but in an enduring cultural value. This element is missing in Lencioni’s model. It’s possible that in this great drive toward clarity, which is so needed and so often the thing that is lacking in so many organizations, creativity and flexibility could potentially be sidelined in favor of clarity in what is already established. However, innovation is a key to organizational growth, but clarity is still needed in the how. How will ideas be gathered, shared, and piloted? How will feedback be collected and applied? Clarity doesn’t have to mean that all the answers are handed down from the leadership team and everyone else’s job is simply to execute them to the letter. Rather, that there would be clear pathways in place to allow innovations to flourish.

Overall, I find Lencioni’s model and Hsieh’s practices at Zappos both practical and inspiring. While organizational health can feel elusive and intangible, each person has forged a pathway to intentionally and practically shape organizational cultures so that people actually want to come to work. They can know what their job is and feel like they are part of something larger than themselves. I hope this inspires you to take hold of your culture, work toward clarity, and see your organization thrive.

What inspires you in these models? What intrigues you? Where are you skeptical? Let me know in the comments!