When being smart is not enough

Smart leaders in the logistics and supply chain business are not hard to find. We report almost daily on cutting-edge operational advances that are led by very smart professionals.

Yet being smart, in and of itself, does not guarantee success. According to author Patrick Lencioni, companies must go beyond "smart" to truly reach their full market potential.

Speaking at Dematic's annual Material Handling and Logistics Conference, held earlier this week in Park City, Utah, Lencioni identified two characteristics that he considers hallmarks of a successful business. "There are two requirements for success today," he said. "Companies must be smart, but they must also be healthy." In fact, in his new book, The Advantage, Lencioni writes that organizational health "will surpass all other disciplines in business as the greatest opportunity for improvement and competitive advantage."

Some definitions are in order here. As for what defines a "smart" company, an organization obviously needs a good strategy, sound marketing that links to its strategy, a solid understanding of enabling technologies and how to put them to the best use, and, of course, a solid financial plan and management.

Really nothing new here, but what of the issue of an organization's health? "Healthy companies have some common attributes," Lencioni said. "They have minimal politics, minimal confusion, high morals, high productivity, and low turnover."

To get (and stay) healthy, companies must do four things, he said. First, they must build and maintain a cohesive management team. "The leaders must work together well," he said.

Second, those leaders must create clarity. "The goals must be clear and properly aligned," he noted. "There can be no ambiguity in the answers they give their employees."

The third requirement on Lencioni's list is communication—or what he likes to call "over-communication." "Research tells us that people need to hear things a minimum of seven times in order to believe it," Lencioni said. "[So you] need to say it again and again. The best CEO also needs to be the CRO, the Chief Reminding Officer. Employees want and need to know you are sticking to the company's message."

The fourth thing is essentially an extension of the third. "You need to not only over-communicate, but also reinforce it in all things you do. There can be no ambiguity at all, at any time," he said.

Making all this happen requires leaders to master several important behaviors and then see that they're engrained in the corporate culture, Lencioni maintains. First, there must be an extremely high level of trust among the management team members. "To get there, you must all be willing to be wrong and to be vulnerable," he explained. "If you are not humble enough to accept you will be wrong and to accept that other members of your team can be smarter on particular topics, then you are an insecure leader and you must change that behavior."

Second, you need to embrace conflict. "Conflict can be great," said Lencioni, who contends that if there is no conflict in an organization, then someone is holding back. Think of a boardroom filled with "yes men" who agree with everything the CEO says. "When you have trust, conflict is really just the pursuit of truth." Employees won't weigh in with their ideas if conflict is not an accepted and valued component of a company's behavior, according to Lencioni. And "if people won't weigh in, people won't buy in" to the company's goals and objectives.

And if employees and managers don't buy in? Then implementing the tactics that support your company's strategy will be like pushing a string up a flagpole.