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Posted May 24, 2010
Superior Organizational Performance Reflecting its Formal and Informal Hues
Jon Katzenbach and Zia Khan systematically explore the formal and informal elements of an organization. As the authors highlight repeatedly, the key challenge is how to integrate the two types of mechanisms that give an organization its distinctive DNA over time.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Katzenbach and Khan urge leaders to keep and strengthen their formal managerial approaches to their business i.e., strategy, structures, processes and procedures, programs and initiatives, and performance goals and metrics. These formal building blocks bring precision and permanence to the organization. At the same time, the authors encourage leaders to recognize the limitations of these formal mechanisms in their pursuit of superior performance. Leaders also have to identify and cultivate the informal building blocks of their organization. These informal (outside the lines) building blocks regroup shared value, informal networks, communities, and pride.
The identification and cultivation of the formal and informal elements of an organization is also important to all employees. The most effective employees in any organization learn quickly how an organization actually works instead of relying exclusively on the formal mechanisms that indicate how the organization is supposed to work.
The balance between the formal and informal elements of an organization evolves over the life cycle of the organization. As a young organization grows, the formal building blocks that bring it precision and permanence will gain in importance. However, the leadership has to be careful not to alienate powerful informal elements of the organization that can reject new formal initiatives in which they do not buy in. Imbalances resulting from a lack of integration of the two types of elements tend to appear either during periods of significant growth or significant declines in growth.
Katzenbach and Khan convincingly demonstrate that the mobilization of the informal elements of an organization is of particular importance to strategic planning, innovation, cost-cutting, culture change, or customer service. Whoever has worked in a turnaround environment will feel at home while reading the authors' coverage of mutating companies such as Bell Canada, Aetna, or The Home Depot.
In summary, Katzenbach and Khan invite leaders to mobilize the informal to solve performance challenges. Relying exclusively on the formal elements of an organization to achieve the desired performance will often lead to disappointing results.
Posted November 23, 2010
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