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Fear of conflict allows bad things to happen: Lencioni on the banks

Royal Commission exposes a classic team fault says author

New York Times bestseller author Patrick Lencioni says a lack of conflict in teams was probably at the heart of bad decisions, that led to the The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The leading organisational expert and author of The Five Dysfunctions of a Team indicates robust conflict might have, for example, averted bad decision making, and the subsequent profit losses, at wealth managers AMP.

“Someone knew that someone was charging (insurance premiums to) people who were dead, and instead of standing up in that meeting and saying ‘Wait, this is not right’ they said “Oh, I don’t want to accuse them, this could be difficult.’ You see where the lack of conflict allows people to watch bad things happening and not do something about it,” he said.

Speaking in an interview with The Growth Faculty, Lencioni says when there is no conflict and people don’t weigh in their opinion, they don’t really buy in.

“They sit in a meeting and nod their heads and say okay we can do that, and they go back to their team and say ‘I don’t think this is a good idea’,” he said.
“When it comes to turning to someone on their team, and holding them accountable for their behaviours or their performance, most people don’t like to do it.” 

The New York Times bestselling author and organisational expert says if he had to look at one thing in an organisation to predict their success going forward, he wouldn’t look at their balance sheets, he would go and watch one of their staff meetings with their CEO and their executive teams.

“When things go bad people tend to look at things they can measure…a strategic error here or a financial problem…but those are downstream symptoms. The fact is, if you watch the behaviour of the leaders in a meeting, you’re going to be able to predict the success of the company,” he says.

Lencioni says companies do need to be making money, but when they are so determined to prove they’re successful that they throw out ethics and morality out the window, they always suffer for it.

“You can never cheat that way. It’s bad math, and I don’t mean financial math, it’s bad life economics to think you can do something without ethics and integrity and still feel good about what you’ve achieved. Ultimately you pay for it,” he said.  

To illustrate his point that behaviour always precedes results, Lencioni cited the example of one of his clients: Southwest Airlines. 

“Southwest Airlines is now the largest carrier of passengers in the United States. I’ve worked with their executive team, and I can tell you this: When they make decisions, the first, second or third filter is NOT ‘What is this going to do to our bottom line?’; it’s ‘Is this the right thing by our customers?’, ‘Is this the right thing for our employees?’, ‘Does this live consistent with our values?’” he told The Growth Faculty.

And, because they do that, he said, their results have been better than any airline in U.S. airline history.

“I’ve been in the room with them, they do not first calculate the financial impact. They’re like ‘let’s be true to who we are and what makes sense, and as a result they are financially responsible. And people often get this wrong. Do the right thing and good things happen. And, that’s true of all the best, sustainably successful companies. Short term you might be able to eke your way to success by cutting corners ethically, but it never sustains long-term,” he said.

Lencioni asks leaders to answer six critical questions so they can create clarity and build a healthy organisation. Imagine, as you go down the list, the answers the banks should have kept top of mind: 

1.    Why do we exist? (the fundamental reason we were founded)
2.    How do we behave? (the ultimate guide for our employees’ behaviour at all levels) 
3.    What do we do? (our business definition)
4.    How will we succeed? (our plan for success and differentiation)
5.    What is most important, right now? (our single top priority we’re focussing on)
6.    Who must do what? (our respective responsibilities)

Lencioni writes that members of any leadership team must take responsibility for ensuring that compensation and rewards programs are simple, understandable, and, most important of all, clearly designed to remind employees what is most important.

“This is especially true at the executive level, because the way leaders themselves are rewarded and compensated will inevitably have an impact on how they motivate their people,” he said.   


Patrick Lencioni is being hosted by The Growth Faculty for his first ever Australian visit.  Building High Performance Teams is the theme of the National Growth Summit in Sydney on March 13 and Melbourne on March 15. Tickets on sale now.  Members of The Growth Faculty receive the greatest ticket discount.

Not a member? Join The Growth Faculty today to access exclusive content, including an interview with Patrick Lencioni On Demand at the Business Book Club.