Transforming Organizations & Lencioni's Five Dysfunctions
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In Lencioni's book on the five dysfunctions of organizations, several critical and relevant points pertaining to the realities of revolutionary change for a company by adoption of his principals of leadership are missing. Therefore, by failing to keep these important points in mind, even the best intended leaders trying to accelerate competitive effectiveness via application of Lencioni's disciplines will fail to achieve positive outcomes.
The first missed point is the need for leaders and managers to have relevant specific abilities (relevant talent) and the second is that an alignment of the values among managers and ownership surrounding the five dysfunctions and how they can be overcome must exist. The author overly simplifies the solutions he proposes by leaving these critical and common challenges out of his analysis. It is sad but true that most organizations cannot navigate change well because they do not have the right people talent and their ownership or stakeholders do not have the proper view of what it takes to succeed in the new world of competition.
On the first missing point, without exceptional talent and skill among the team, functionality will rarely be achieved. Start with people first, as Collins established in his perennial work "Good to Great." The world has become increasingly complex and the skill sets required of managers and leaders for an organization to achieve greatness are becoming more unique and difficult to find. In order for a team to be successful its team members must have a rare set of competencies to deal with a global world. Without these talents, it does not matter how much trust a business instills in its team at a given time because attention to results will lead to attempts to hold people accountable for outcomes they cannot achieve - no matter how functional the group. Soon any temporary functionality will be undermined by failures that point to members' ineptitudes at execution or even vision because the world is changing faster than the team or important team members can comprehend: many team members are just not capable of it.
When assessing the matter of having relevant talent, one must understand that it is largely a function of the nature of the industry the organization operates in. It is why many organizations go "outside" their industries at some point when cataclysmic change ensues. Industries that have been more effected by the revolution, for example global retail clothing production which has been greatly impacted over the past decade by significant upheavals, possess a large number of individuals more experienced in rapid change and the deployment of proven cutting edge methods required of the new economy. Creating and utilizing network orchestration is but one example of what I would term as a cutting edge method and demonstrates a specific ability of "relevant talent". However, in industries that have to date avoided as significant an evolution, stakeholders, leaders and managers still remain whom are largely unscathed by the impact of changes in technologies, production methods, and many other pervasive new modes of competing. Many of these businesses leaders cannot even fathom the impact that awaits them. They are among the remaining dinosaurs waiting for their demise. Thus, there is not the degree of talent relevant to success in the new economy in these industries and until similar upheaval descends upon these businesses over time to punish those who have not been sharpening their swords, the depth of people available to navigate the challenges will be shallow. It is a cycle that has impacted many an industry over the past several decades.
The second challenge for leaders that was not addressed by Lencioni deals with the fundamental matter of stakeholder control and the realistic role of leaders to manage expectations of owners amid markets that are rapidly and unpredictably changing. The ultimate impact of this dynamic is that stakeholders behaviors do not align in many instances with the behaviors required to overcome the five dysfunctions themselves. Near term performance is not the appropriate measure when embracing the five dysfunctions, particularly when considering the first item above. Consider this: the average life cycle of an S&P 500 company today is less than 15 years. CEO's are routinely hired to address complex challenges as are other senior managers, only to be terminated within short order. In reality ownership, particularly among businesses that have experienced some modicum of success in legacy industries, often has unrealistic expectations based on past success and do not understand the relevant risks they truly face, at least not until they start losing significant market share, corresponding value and the results affect their pocketbook - often at that point its too late.
Past success is a stakeholders worse enemy and ultimately a leader cannot engage in behavior that builds trust organizationally when majority stakeholders give lip service to the long view while firing managers and leaders who do not deliver in the short term or pay their outdated strategies homage. It is the pervasive doom loop mentality which sits at the feet of many a shareholder and it is inherently contrary to building trust because the implication is that ownership knows better, despite their often being largely uninvolved and basing their thinking on long expired paradigms. It is the nature of humans to recall the glory days and conclude that challenges being experienced financially are the result of failure to do what was done before, a common misconception, leading to short cited conclusions and reactions. Recall that now days long past can be but a year ago. These businesses and their shareholders are grist for the revolutionary mill. Risking wealth or often times ego is just not worth it for them. However in the new world it is an opportunity for those who know better and this dynamic of the founder, owner or group of stakeholders separate and apart from the leader striving to advance a business organizationally is not effectively addressed in the book despite the ubiquity of the dynamic in many companies.
In conclusion, the five dysfunctions and the behaviors required to overcome them, while well developed in their conceptualization and valuable in their consideration, are an unrealistic methodology to apply without first more openly acknowledging that having the proper and relevant talent (think Collins Good to Great - People first) and second with ownership and stakeholders willing to be as trusting and aligned with Lencioni's principals along with the leadership they engage to enact it.
