This is the last book review form my What I’m reading in  September Post. It’s not so much a review as a collection of thoughts from my reading of the book, which I hope you’ll find interesting.

If you aren’t a senior leader, front line manager or an individual contributor, then this is not the book for you.

Because this is the book about how work in today’s best organisations really gets done.

In most companies the formal structure is well recognised. Organisational charts,  process documentation and job descriptions.  These are the things that most people latch onto when talking about an organisation. The informal structure tends to go unnoticed, as these “fuzzier” aspects of running an organisation are less noticeable.

Because informal organisations are less noticeable, they are harder to define and consequently, less documented. This is the book that sets that straight, not only explaining the benefits of informal organisations, it shows you how to benefit from having one. It’s kind of formalising informality….

As the current business environment is synonymous with change, globalisation and social networks, more and more companies are finding that the best way to create lasting value is by making use of informal  networks rather than rely on top down rules of ‘engagement’.

The ‘magic’ of the informal

Whilst it makes sense to make use of the informal organisation -  if you work in an organisation you’ll be familar with the people who know how to get things done much more quickly and that’s what leaders Leading Outside The Lines By Katzenbach and Khan [US Readers] [UK Readers] is argue that organisations that can mobilise both the formal and informal can create a real and sustainable advantage, here’s how:

• They foster encourage and support values that inform the decisions and actions taken at all levels in the formal organisation.
• They ensure that formal, long range strategy is understood by people working on the front line
• They retain the efficiency and clarity of the formal organisation but capitalise on the flexibility and speed of the social networks
• They ensure that as well as the formal methods of compensation (pay, benefits etc), they ensure that employees have emotional sources of motivation that commit them in ways that formal mechanisms can’t.

Informal by it’s nature isn’t that well defined.  Because it doesn’t have the clear boundaries that the formal has.  Unlike the formal organisation, the informal organisation is rarely documented.

Nevertheless Katzenbach and Khan identify  the key elements of an informal organisation:

• Shared values – these are the shared beliefs and norms for making decisions and taking action both individually and collectively
• Informal networks - these are the patterns of relationships between people that may be based on knowledge sharing, trust, energy or other characteristics.
• Communities - these are the more focused, cross functional groups that share a common identity.
• Pride - people feel proud when they use the skills that are meaningful to them.

The informal is good for motivating people to go above and beyond their job description,  communicating information quickly and meaningfully, catalysing and accelerating behaviour change.

Values Driven, Not Values Displayed

Guess the organisation: Organisation A had communication, respect, integrity and excellence as it’s core values which were posted on the company website, included in the company manual, displayed throughout it’s offices and promoted at company events. However, the employees engagement survey, researchers found a large gap in the degree to which the employees actually subscribed to these values.  It wasn’t that the employees disagreed with them,, it’s just that they didn’t apply them to either the their decisions or their behaviour.

Organisation B has the values honour, courage, and commitment.

The real difference in these values statements is not the words, but how they actually determine value. In Organisation B’s case, every person in the organisation talks openly about the values and makes critical decisions based upon them.

Can you guess the organisations?

Organisation A was Enron, which went bankrupt in 2001 after massive corporate fraud.  Organisation B is the U.S. Marine Corp with a 200 year history as an elite high performing institution.

The difference between the two however is that Enron was a values displayed organisation, whereas the Marine Corps is a values driven organisation.  The values are lived and breathed on a day to day basis to guide decisions and actions.

5 Behaviours of Top motivators:

1. Know your people - create meaningful connections to get to know their teams personally and understand individual definitions for success.
2. Recognise success - use spontaneous ‘pats on the back’ for the “how” in addition to the “what”, the journey is as important as the destination.
3. Maintain the course – translate the organisations strategies in to local context and then prioritise  goals and follow them, helping people stay on track.
4. Use facts to make decisions - employ a transparent and data driven process to make hard choices and always explain the why in clear terms.
5. Broaden the work – create stretch opportunities for everyone based on their skills and goals that go beyond recognition.

Just like in formal organisation structures, performance is enhanced when managers and leaders set performance goals that require employees to collaborate, where goals are meaningful  to create a sense of purpose and finally, applying values to the hardest problems which stand in the way of achieving goals.

Principles for mobilising

The authors show leaders how they can proactively influence the informal organisations to get more transaction.  Laying out a few principles which are generally helpful (sadly there’s no best way) to mobilise the informal structure:

• concentrate on the critical few
• Draw on what’s already working
• Promote emotional energy that feeds on itself

Leading outside the lines: Conclusion

Certainly it makes sense to utilise an informal organisation structure to supplement the formal, but rather than throwing out the existing structure the authors sensibly argue that you should:

• Keep and strengthen your formal management approaches (recognising their limitations)
• Avoid viewing the informal organisation as unruly chaos
• Refuse to manage the informal with the techniques that work for the for the formal

Having worked in organisations for almost 20 years, I recognise the benefits of the informal organisation, which in truth have always existed.  Knowing that person X is married to person Y who happens to hold the key to the answers you require works wonders.  However, the authors give a clear route map as to how to leverage the informal organisation structure within a formal framework which is undoubtedly the best way for an organisation to be structured, although it’s important to recognise that achieving integration is a journey, not a destination.  It’s a moving target and all the book can do is give ideas and options.

I’m going to close with the example of Nordstrom’s employee guide to customer service,  quoted in the book. Nordstrom has no employee handbook.  Instead it has a 75 word statement that says, among other things, “Our number one goal is to provide outstanding Customer Service”. There is only one rule in the statement. “Use your good judgement in all situations. There will be no additional rules”.

So, what about you? Do you have any experiences of using an informal organisation structure to drive performance?