Pay Attention to Your Two Organizations

Every organization has a formal organization and an informal one. That is simple fact. And it needs both of them. The trick is making sure that both are in good health and functioning togetherin alignment.

That’s just one of the many useful insights from Startup Leadership: How Savvy Entrepreneurs Turn Their Ideas into Successful Enterprises, by Derek Lidow. Useful book! He talks about the reality of these dual organizations. Getting both right greatly enables execution. And where there is no successful execution, there is no success. From the book:

A well-conceived organization, in both its formal and informal structures, focuses the entrepreneurial ideas and actions coherently throughout the enterprise (or organization), helping everyone understand what he or she needs to do to help the enterprise (or organization) succeed…

Chaos reigns when there is a significant misalignment between the formal and informal organizations…

As it turns out, the informal organization can make decisions faster than the formal one…

He describes how that, regardless of the “who” on the organizational chart is supposed to make a key decision, that “who” actually always talks to this person, who is talking to that person. And all of these “informal” relationships and interactions actually shape the decision making. Thus, alignment of the “two organizations” is crucial, and misalignment is costly.

In his chapter on Organizing to Succeed, he makes this terrific observation: as an organization grows, you change from “huddles” to a more formal meeting structure “with an agenda and a fixed set of attendees.” But don’t miss the pointregular meetings of key people are essential. As I say often:

“You accomplish what you meet about.”

This book is a logical bookmeaning it takes you through a step-by-step process on what an organization needs to do at each stage of development, all in pursuit of turning ideas into successful projects and operations, well-served by its developing organizational structure. And this all revolves around successful actions taken by the leaderthe leader practicing leadership.

Randy Mayeux

Contributed by:
Randy Mayeux
Professional Speaker & Writer
Co-founder, First Friday Book Synopsis

2 responses

  1. There is no question that chaos reigns when the formal management doesn’t recognize the impact of the informal management. The impact upon people working in the organization is telling. Well presented, Randy.

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