You’ve spent the last six months putting together your founding team, raising money for a startup, and then you start truly working on your product.
You know about company values. You understand that a mission and vision are essential. But how would you proceed to get things going? Too often, the easy thing is to start making the game, and the hard thing is to stop and think about how to be good at culture.
I’ve read countless books on company culture, and I’ve written many on the topic on my blog. I’ve interviewed CEOs who’ve built companies. Many have conducted workshops where they come up with the company’s values, which many people see as the backbone for a good culture.
In gaming, it feels that you will be happy as long as you get to make games. But I’ve observed that this is not enough. As you hire more people, as you hit bumps in the road, some bad things start surfacing. Politics starts to play a role in the company. People are confused about the ways that the company is operating. This leads to low morale and low productivity, ultimately the best employees leaving the company.
After I read Patrick Lencioni’s book The Advantage, I felt that I’d found the manual for leaders in companies to build healthy organizations, which are cohesive, there’s clarity, things are being communicated and reinforced through processes that support the cohesiveness and clarity.
The simple lesson of the book
This book focuses on the reasons why business leaders should be building both Smart and Healthy organizations.
Smart is the area of work which is most comfortable for people. Having good tech, sound finance, good marketing, and a good product strategy. As Patrick writes: “That is what gets covered in media, and what most business schools teach.”
But then you got the healthy organization, which consists of minimal politics, minimal confusion, high morale, and productivity, of people being psyched to come to work and people, get a lot done. And low turnover where good employees never leave.
The author talks about four disciplines that leadership teams need to develop.
Discipline 1 – Team
This discipline is about having cohesiveness behaviorally in the leadership team.
- The leadership team is small enough (three to ten people) to be influential. Members of the team trust one another and can be genuinely vulnerable with each other.
- Team members regularly engage in productive, unfiltered conflict around important issues.
- The team leaves meetings with clear-cut, active, and specific agreements around decisions.
- Team members hold one another accountable to commitments and behaviors.
- Members of the leadership team are focused on team number one. They put the collective priorities and needs of the larger organization ahead of their own departments.
Discipline 2 – Six questions to create clarity
- 1. Why do we exist? Why do you get out of bed every day?
- 2. How do we behave? What are the company values? We’ll never do anything that violates this code.
- 3. What do we do? The clarity around the company’s product and customer.
- 4. How will we succeed? Strategy: intentional decisions that differentiate from competitors and have the best possible chance to succeed
- 5. What is most important right now?
- 6. Who on the team must do what to make sure we succeed?
Discipline 3 – Over-communicate clarity
- Communicate the answers to the six questions on clarity
- People need to hear them seven times, for it sticks.
Discipline 4 – Reinforce clarity
- Basic human systems and processes should reinforce clarity.
- How to hire, reward, compensate, fire need to be aligned with the clarity.
Why leaders don’t bother about organizational health
For startups, it’s hard to see that this matters at the stage where it’s just ten people in the room. But the early stage is where it matters and has the most significant impact on the company. You define the company with your core group of people who’ve been there from the start. You hire everyone after your core group with a healthy organization as your guide.
When it’s just the founders, you might think that you don’t need any “cultural” work to be done, that you have a healthy organization already in place. But when you start hiring, no organization has organically, by accident, stayed healthy by doing nothing. I can say this from experiences.
Here’s a graph that shows why it’s impossible to keep things healthy by not doing anything. Each dot is one person in the company. Four founders mean that you have six people interacting, possibly in very mutual, harmonious ways.
As you grow, you add dots to this sphere. Each new dot needs to draw a line to each existing dot. Each line needs to be healthy and needs to signal cohesiveness and clarity. Imagine those lines having a color-coding of green for healthy to red for unhealthy.
When you don’t work on the healthiness and leave it to chance, those lines can start turning into signaling politics, confusion, low morale, low productivity, and low feelings of belonging.
One way to infect the organization is to introduce a toxic hire. They will gradually turn things unhealthy, and as leaders show neglect in dealing with culture misfits, the entire organization starts losing cohesiveness.
Some of my favorite quotes from the book
These quotes talk about why it’s so hard to care about organizational health:
“Many leaders struggle to embrace organizational health (which I’ll be defining shortly) because they quietly believe they are too sophisticated, too busy, or too analytical to bother with it. In other words, they think it’s beneath them.”
“The Sophistication Bias: Organizational health is so simple and accessible that many leaders have a hard time seeing it as a real opportunity for meaningful advantage.”
“The Adrenaline Bias: Becoming a healthy organization takes a little time. Unfortunately, many of the leaders I’ve worked with suffer from a chronic case of adrenaline addiction, seemingly hooked on the daily rush of activity and firefighting within their organizations.”
“The Quantification Bias: The benefits of becoming a healthy organization, as powerful as they are, are difficult to quantify accurately. Organizational health permeates so many aspects of a company that isolating any one variable and measuring its financial impact is almost impossible to do in a precise way.”
Get The Advantage from Amazon by going here.