CSCMP's Supply Chain Quarterly
December 14, 2017
Supply Chain Executive Insight E-Newsletter
Each week the Supply Chain Executive Insight e-newsletter will include brief articles about developments that are often overlooked by other supply chain publications. We will present you with summaries of the latest research as well as new ideas on how to make your supply chain operations more effective. And we'll offer commentary that sheds light on what's happening in supply chains today.
Sign up now!

Most Read Articles

News from our sister publication
DC Velocity
Afterword
Afterword

When being smart is not enough

Comment
Lots of companies concentrate on being smart. What they really should be focusing on, says Patrick Lencioni, is being healthy.

Smart leaders in the supply chain profession are not hard to find. 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 a few months ago, Lencioni identified two characteristics that he considers to be 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, **ital{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 characterizes 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.

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. "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 some important behaviors and then see that they're ingrained in the corporate culture, Lencioni maintains. First, there must be an extremely high level of trust among the management team members. Second, they 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."

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.

Mitch Mac Donald is Group Editorial Director of AGiLE Business Media.

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.


Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2013: When being smart is not enough"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.