The Five Temptations of a CEO
The Four Obsessions of an Extraordinary Executive
The Five Dysfunctions of a Team
Death by Meeting
Silos, Politics, and Turf Wars
The Three Big Questions for a Frantic Family
Getting Naked
The Advantage
Overcoming the Five Dysfunctions of a Team
The Ideal Team Player
The Motive
Copyright © 2007 by Patrick Lencioni.
Published by Jossey-Bass
A Wiley Imprint
One Montgomery, Ste. 1200, San Francisco, CA 94104 www.josseybass.com
Originally published in hardcover in 2007 as The Three Signs of a Miserable Job: A Fable for Managers (and Their Employees).
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the Web at www.copyright.com. Requests to the publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at www.wiley.com/go/permissions.
All people, companies, and events in this fable are fictitious, except that Nike, Inc., is a real company, used here to represent a recognizable sporting goods and apparel company.
Readers should be aware that Internet Web sites offered as citations and/or sources for further information may have changed or disappeared between the time this was written and when it is read.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass directly call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986, or fax 317-572-4002.
Jossey-Bass also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.
Library of Congress Cataloging-in-Publication Data:
Names: Lencioni, Patrick, 1965- author.
Title: The truth about employee engagement : a fable about addressing the three root causes of job misery / Patrick Lencioni.
Description: First edition. | San Francisco, CA :Jossey-Bass & Pfeiffer, [2016]
Identifiers: LCCN 2015038107 (print) | LCCN 2015040961 (ebook) | ISBN 9781119237983 (cloth) | ISBN 9781119238423 (pdf) | ISBN 9781119237990 (epub)
Subjects: LCSH: Employee motivation. | Employee morale. | Job satisfaction. | Management.
Classification: LCC HF5549.5.M63 L46 2016 (print) | LCC HF5549.5.M63 (ebook) | DDC 658.3/14–dc23
LC record available at http://lccn.loc.gov/2015038107
For my sons, Michael, Casey, Connor, and Matthew.
May the jobs you have in life be purposeful and fulfilling.
Work has always fascinated me, though I must admit, sometimes in a slightly morbid way.
I remember as a youngster being stunned and disturbed when I first learned that adults like my dad worked eight hours or more every day at their jobs. That was more time than I spent at school, and I could barely manage that!
And when I was told that many of those adults didn't really like their jobs, I was dumbfounded, unable to comprehend why people would spend so much time away from family and friends and not be happy about what they were doing. I suppose I also feared being in the same situation myself one day.
My fascination with jobs only grew when I too joined the workforce at the age of thirteen. As a summertime busboy at a large restaurant, I worked with waitresses and dishwashers and cooks and bartenders, most of whom were career employees. Later, during college, I spent my summers working as a bank teller, again with full-timers. In both of these jobs, I always found myself wondering whether my coworkers enjoyed their work, and over time I came to the inescapable conclusion that many of them did not.
Which continued to bother me.
My obsession with work reached a whole new level when I graduated from college and landed my first full-time job as a management consultant. That's when I learned about—and experienced for myself—something called the Sunday Blues.
The Sunday Blues are those awful feelings of dread and depression that many people get toward the end of their weekend as they contemplate going back to work the next day. I must admit that there were times toward the beginning of my career when the Sunday Blues began to take hold of me as early as Saturday night.
What was particularly troubling for me then was not just that I dreaded going to work, but that I felt like I should have enjoyed what I was doing. After all, I had landed one of the most sought-after, highest-paying jobs of anyone in my graduating class. I certainly wasn't in the kitchen of a restaurant shoveling other people's food into doggy bags, or standing alone in a bank vault counting cashier's checks. I was doing work that was interesting to me, and I was doing it in an upscale office with breathtaking views of the San Francisco Bay.
That's when I decided that the Sunday Blues just didn't make any sense.
You see, until then I had maintained a theory that eliminating dissatisfaction at work was all about finding the right job. A bad job was one that involved doing menial, boring work for low wages in an unattractive environment. And so I decided that the key to fulfillment and engagement was as simple as finding interesting work that paid well and kept me indoors. But even after having satisfied all those criteria, I was still miserable, which made me wonder if maybe I didn't really like consulting after all.
So I changed careers. And was no happier than I had been before.
My theory about job satisfaction was eroding quickly, especially as I met more and more people with supposedly great jobs who, like me, dreaded going to work. These were engineers and executives and teachers, highly educated people who carefully chose their careers based on their true passions and interests. And yet they were undoubtedly miserable.
The theory crumbled completely when I came across other people with less obviously attractive jobs who seemed to be engaged in their work—gardeners and waitresses and hotel housekeepers. And so it became apparent to me that there must be more to employee engagement than I had thought. I wanted to figure out what it was so I could help put an end to the senseless tragedy of job misery, both for myself and for others.
And calling it a tragedy is not hyperbole.
Scores of people suffer—really suffer—every day as they trudge off from their families and friends to jobs that only make them more cynical, unhappy, and frustrated than they were when they left. Over time, this dull pain can erode the self-confidence and passion of even the strongest people, which in turn affects their spouses and children and friends in subtle but profound ways. Of course, in some cases the impact of job misery is not subtle at all; it leads to serious depression, drug and alcohol abuse, and even violence at work and at home.
Beyond the human misery caused by this phenomenon, the impact on organizations is undeniably huge. Though it may be difficult to quantify, the disengagement of employees has a direct impact on productivity, turnover, and morale, all of which eventually hit a company's bottom line hard.
What makes all this so absurd is that there is indeed an effective remedy out there, one that is barely being used. It has no direct cost and can provide almost immediate benefits for employees, managers, and customers, thus giving companies who use it a powerful and unique competitive advantage.
But let me be very clear about something; the remedy I propose here is going to seem ridiculously simple and obvious at first glance. I am aware of that, and I must admit a little apprehensive about it. But when I consider how many managers fail to put these ideas into practice, and how many people continue to suffer through miserable jobs as a result, I come to the conclusion that perhaps simplicity and obviousness are exactly what is needed right now. In fact, I am convinced of it.
As the eighteenth-century author Samuel Johnson once wrote, “People need to be reminded more often than they need to be instructed.” I sincerely hope that this little book is a simple and powerful reminder, one that helps you make someone's job—maybe your own—more engaging and rewarding.
Brian Bailey never saw it coming.
After seventeen years of serving as CEO of JMJ Fitness Machines, he could not have guessed that it could all be over, without warning, in just nineteen days. Nineteen days!
But over it was. And though he was better off financially than he had been at any time in his life, he suddenly felt as aimless as he had when he dropped out of college.
What he didn't know was that it was going to get a lot worse before it got better.
Early in his career, Brian Bailey came to an inescapable conclusion: he loved being a manager.
Every aspect of it fascinated him. Whether he was doing strategic planning and budgeting or counseling and performance appraisals, Brian felt like he had been created to manage. And as he experienced more and more success as a relatively young leader, he quickly came to the realization that his decision to forgo college made him no less qualified than his peers who had been to business school.
But then again, he hadn't had much choice about leaving school. Brian's family, being lower middle class to begin with, fell on particularly hard times when the Bailey walnut orchards in northern California were hit two years in a row by crippling frosts.
Being the oldest of five kids and the only one out of the house, Brian felt a sense of responsibility not to drain the family resources. Even with the financial aid programs offered at St. Mary's College, keeping him in school would have been a serious burden for the Baileys. And Brian's academic focus on theology and psychology didn't make the economic justification for staying in school any easier.
So, answering an ad in the newspaper, Brian took a line manager position in a Del Monte packing plant, and spent the next two years on a factory floor, ensuring that tomatoes and green beans and fruit cocktail were stuffed into cans as efficiently as possible. Brian liked to joke with his employees that he had always wanted to visit a “fruit cocktail farm.”
As his father's orchard rebounded and the family's financial situation improved, Brian had a decision to make. He could go back to school and finish his degree—or continue to work at Del Monte, where he was on a fast-track to promotion and a possible shot at running his own plant one day. To the chagrin of his parents, he opted for neither.
Instead, Brian indulged his curiosity and took a job with the only automobile manufacturing plant in the San Francisco Bay Area. For the next fifteen years, he blissfully moved up various corporate ladders at the plant, spending equal time in manufacturing, finance, and operations.
Outside work, he married a woman he had briefly dated in high school, and who, ironically, attended St. Mary's after Brian had left. They moved to a small but growing community appropriately named Pleasanton, and raised a family of two boys and a little girl.
By the time Brian was thirty-five, he was vice president of manufacturing for the plant, working for a dynamic COO named Kathryn Petersen.
A few years after joining the plant, Kathryn had taken a personal interest in Brian because of his modest educational background, his work ethic, and his desire to learn. She kept Brian at one job or another in her part of the organization for as long as she could. But Kathryn knew it couldn't last forever.
When a headhunter friend of Kathryn's called and asked if she would be interested in interviewing for the CEO position at a relatively small exercise equipment manufacturer in the central valley, she declined. But she insisted that her friend recommend Brian as a candidate for the job.
Looking at his résumé—and his lack of a college degree—the headhunter decided there was no way Brian would be hired, but—as a favor to Kathryn—agreed to let him interview. He was shocked when his client called two weeks later to say that Brian had been “the best candidate by far,” and that he was being hired as CEO of JMJ Fitness Machines.
What impressed his interviewers at JMJ, and would continue to impress them on the job, was Brian's ability to communicate with and understand people at every part of the social spectrum. He seemed no more or less comfortable on the floor of the factory than he did in the boardroom, demonstrating a combination of competence and unpretentiousness that was rare among executives, even in the world of manufacturing.
As for Brian, he felt like a kid in a candy store, blessed to have the opportunity to do something he enjoyed. JMJ would benefit from that blessing.
Located in Manteca, California, a small bedroom and agricultural town sixty miles east of San Francisco, JMJ was a relatively young company that, for most of its first decade in existence, had merely survived. It did so largely by tapping into the relatively cheap labor in the area and mimicking its more innovative competitors. Though the company had managed to turn a modest profit, it was a minor player in a relatively fragmented industry, garnering less than 4 percent of the market and a position no higher than twelfth in terms of market share.
And then the company's founder and original CEO decided he'd had enough, prompting the call to the headhunter who ended up finding Brian.
The first year of Brian's tenure was no picnic as JMJ found itself enmeshed in a frivolous but distracting lawsuit. Ironically, that situation provided Brian with his first opportunity to prove himself as a leader, and provoke him to make some strategic changes.
For the next couple of years, Brian repositioned JMJ in every way possible. Most visibly to the outside world, he shifted the company's strategic focus almost exclusively toward institutional customers, which included hospitals, hotels, colleges, and health clubs.
Brian also injected a sense of inventiveness into the company by bringing in a few creative engineers and exercise physiologists from other industries. The net result of both these moves was a higher selling price for JMJ products, and unbelievably, higher demand for them too.
But as important as these changes were, nothing had a greater impact on JMJ's long-term success than what Brian did to its culture.
Like most other manufacturers in the area, the company had been plagued by relatively high turnover, low morale, and unpredictable productivity, living under the subtle but constant threat of unionization. Brian knew that turning around the organization would require him to change all that.
Over the course of just two years, Brian and his team managed to raise employee engagement and morale to unthinkably high levels, allowing the relatively obscure company in the Central Valley to establish a reputation for workforce satisfaction and retention. As a result, JMJ wound up winning more industry awards for being “A Great Place to Work” than it could cram into the glass trophy case in its lobby.
When reporters asked Brian for his secret to accomplishing this, he usually downplayed his role and told them that he simply treated people the way he would like to be treated. Which was mostly true, given that he had never really developed a specific methodology.
And as much as Brian publicly deflected credit for the cultural turnaround at his company, he quietly took great pride in the fact that he had given his people, especially the less privileged ones, more rewarding and fulfilling jobs than they would have found elsewhere in the area. More than any revenue goal or product innovation the company had achieved, this made Brian feel like his own job was meaningful.
Which is why selling the company would be so painful for him.
From a financial standpoint, JMJ was as solid as any medium-sized company could be. Under Brian's leadership, the firm had generated fifteen years of solid results, leapfrogging to become the number three—and at times, number two—player in the industry. With no debt, a well-respected brand, and plenty of cash in the bank, there was no reason to suspect that the privately held company was in any danger.
And then one day it happened.
It was a two-paragraph article in the Wall Street Journal, announcing that Nike was thinking about entering the market for exercise equipment. To most people reading the paper that day, the news was insignificant. For Brian, it was the precursor to an earthquake.
The chain reaction actually began two days later when Nike publicly identified the company it planned to acquire—FlexPro, JMJ's largest competitor. Before anyone knew what was happening, companies that had been operating independently for decades were positioning themselves to be swallowed up by brand name conglomerates from a variety of industries that were now interested in the exercise equipment market. For Brian and his 550 employees, it was only a matter of time.
Within just a few days of reading that fateful article in the Wall Street Journal, Brian and his board numbly came to the conclusion that they would have to sell JMJ, and quickly.
As difficult as that might be, denial was not something Brian or his company could afford. After all, he didn't want to be the only company left standing when the music stopped—to find himself and his employees, all of whom owned stock, unrewarded for all their years of hard work. So he called one of his friends at an investment bank in San Francisco and asked him to help find a buyer for the company he loved.
Actually, Rick Simpson wasn't so much a friend as an old acquaintance. The two had lived for a year in the same suite in a dormitory at St. Mary's. Though never terribly close, they had managed to stay loosely connected ever since.
Brian had always found Rick to be brilliant and occasionally hilarious, as well as arrogant and insensitive. But for some reason, he could not bring himself to really dislike the man. As Brian explained to his puzzled wife, Rick always seemed to know when he was pushing the limits of obnoxiousness, and then recover by doing something genuinely redeeming.
In spite of his personality quirks, Rick had succeeded wildly in his career, developing a reputation as one of the best investment bankers in the country. In fact, he had become something of a celebrity in his field.
His response to Brian's initial call was typical. “So you've had enough of that cow town, huh?” Though that was certainly teasing, Brian was not in the mood for it.
“Well, I actually live in the Bay Area and commute over here. And I don't mind the valley so much. But I do need to sell the company.”
“Why?”
“I don't have much of a choice. Nike just bought FlexPro, and if we try to compete against companies with that kind of marketing power, we're going to get crushed.”
“Oh, right. I remember reading about that somewhere.” Rick seemed to be rifling through some papers on his desk. “But aren't you moving kind of fast?”
“Well, everyone's going to have to bail out eventually, and the smart ones usually go first.”
“I can't argue with that,” Rick agreed. “So you want me to help you find a buyer?”
“Yeah. And someone who sees our business as a strategic fit, and who understands our unique value.”
“And what exactly is that value?” Rick wasn't being skeptical. He just needed to know.
“Well, our market share is nothing to sneeze at. Somewhere around 20 percent. We're a strong number two or three in a fairly fragmented market, depending on how you slice the pie.”
Rick didn't respond, but Brian could tell he was writing it down, so he continued. “And we've got a solid balance sheet, a good brand name, strong sales projections for the next five quarters, and a few patents that won't expire for another couple of years.”
“Sounds good so far. Is the market growing?”
Brian didn't hesitate. He knew the industry as well as anyone. “Projected at nine percent next year, though I think we'll come in somewhere closer to twelve.”
“Sounds like you've done a hell of a job in that cow town.”
Brian knew Rick well enough to appreciate the sarcastic compliment.
“We've done okay. Anyway, there's one more thing that I think a prospective buyer should know about us.” He hesitated before continuing, not wanting to provoke another jibe. “We have the highest employee satisfaction in our industry. In fact, we're one of the best in any market. We've been named one of the top fifty medium-sized businesses to work for in America.”
Rick didn't say a word at first, then chuckled. “Well, I'll have to adjust my valuation upward by a couple hundred dollars then.”
“What's that supposed to mean?”
Brian's tone made it clear he was annoyed, so Rick backed off a little.
“I'm just teasing you, Brian. I'm sure you've worked very hard to build a nice culture over there, and I'll definitely put it in the package.” He paused. “But I'm not going to lie to you. I don't think it'll translate into anything meaningful in terms of selling price.”
“Well, it should.” Brian knew he was sounding proud and defensive, but he couldn't help it.
As usual, Rick didn't mince his words. “It doesn't in my book. I mean, when I look at a company, I just want to know how fast the market's growing, how much of that market it owns, and whether it's in position to increase its share. I'm not big into the soft stuff. If it really matters, then it should be reflected in the bottom-line numbers anyway.”
Nothing tweaked Brian more than being called soft, and he was tempted to slam the phone down right then and call someone else. But he knew that it wouldn't be in the best interest of his company. And somewhere in the darkest recesses of his brain, he feared that his cynical friend might be right.
So he took a breath. “You know, Rick, you can be a real jerk sometimes.”
Rick laughed. “But you love me anyway, don't you, Brian? And you know what? I'll get you more money for your company than anyone else can.”
Brian didn't respond, so Rick continued in a more conciliatory tone. “Hey, I don't want you to get the wrong idea. I'll admit that I've been following you and JMJ off and on for the past ten years or so. I have a pretty good idea about what you've done over there. In fact, I've even got one of your elliptical machines in my basement.”
Brian silently accepted the muted apology. “Anyway, let me know later this week what you think we need to do.”
“I'll call you Thursday. We'll do this right for you, buddy.”
Brian said good-bye and hung up, amazed that Rick had not changed at all. And that he still couldn't hate the guy.
When Rick called on Thursday, Brian was expecting to hear that he'd made progress. After all, he was one of the best in the business. But Brian could not have guessed that Rick would have already identified a buyer and negotiated an informal ballpark selling price, one that exceeded anything he had imagined.
Rick's strategy was to exploit the “first mover advantage” card on both sides of the table, and he played it perfectly. He convinced the potential buyer to move quickly before other suitors could bid up the price. This made them a little more generous than they had intended to be. And he encouraged Brian to act before his other competitors entered the game, which would crowd the playing field and dilute his value on the open market.
So, after just a week and a half of conference calls, visits, and negotiation sessions, Brian signed the papers that gave control of his company to the country's largest medical equipment supplier. He would later admit that he was not at all prepared for the consequences of that signature.
JMJ's acquirer was not new to the acquisition game, and its executive team had adopted an extremely aggressive strategy when it came to integration. Their rationale was that it was better to accelerate a transition by moving quickly, even if that caused disruption, than to wait and let lethargy and fear take hold. “Like ripping off a Band-Aid in one fell swoop,” their CEO explained before the ink on the contract was dry.
Their plan called for the name of the company to change immediately, which included everything from the way receptionists answered the phones to putting a new sign on the front of the building. It also meant that executives who weren't part of the company's long-term plans—which almost always included the CEO—were to be moved out as soon as possible. Brian's last day was set for just seven days after he had signed the company away.
Throughout the next week, Brian attended a number of emotional farewell luncheons and company celebrations marking the end of what had once been a humble little independent company. Though he deeply appreciated the overwhelming expressions of gratitude and affection from employees, especially the long-term factory workers whose lives had changed drastically during their time with the company, he found the experience to be so emotionally exhausting and overwhelming that he was quietly yearning for it to be over.
Finally, on a rainy Friday evening, after even the janitors had gone home, Brian packed his office and left the building for the last time. Preemptively wiping his eyes to keep any tears from escaping, he drove away wondering what the rest of his life would be like.