In every organization, there are numerous informal initiatives that have yet to become part of the formal organizational structure.
There may be an informal group that meets to discuss how to improve the customer experience.
There may be a network of people from different subsidiaries who share methods and best practices.
There may be an informal group of people from different business units that discuss whether they can collaborate to develop a new offering.
Informal is good.
But the things that really matter, we should formalize.
By that I mean: Defining goals for what we are trying to achieve, allocating resources to the initiative/process, and appointing a manager with some degree of authority and accountability for producing results.
Again, there’s nothing wrong with informal initiatives, processes, and projects.
We need them to create shared understandings and a common culture.
We need them to correct for the shortcomings in the formal structure and to bridge people in different units, who may benefit from sharing knowledge or exploring new opportunities together.
We need them so we can try out new ideas or concepts, before we fully commit and put the organization behind them.
Where we go wrong is when we pretend that informal initiatives are sufficient to address the key strategic challenges we face.
When we claim that we have implemented a global organization, yet all we do is to collaborate across existing local units, in some limited areas, without implementing fundamental structural changes.
When we claim that we are customer oriented, yet we have still not aligned the formal organization with the market.
When we claim to operate as “one firm”, yet all we have done is to communicate this vague intention, without doing anything to address the numerous obstacles that prevent coordinated action among the various units in the firm.
First of all, it just doesn’t work.
Half way measures produce half way results. It requires more than this to become global, customer focused, or well integrated.
Secondly, we just create cynicism among employees, because they will compare our statements about bold strategies with the current organization - which is left unchanged.
They will conclude that we aren’t really serious about it.
Because they know that if we really mean it, we formalize it.