I happened to read this article by Jon Katzenbach and Zia Khan, which talks about driving growth and change in an organization effectively. The article talks about the formal and the informal organizations and the significance they have in effective execution of strategy.
Most organizations have a very well defined “Formal” side with Org charts, Process flows, metrics, targets etc. Whereas the Informal side, which typically comprises of informal groups, cultures, emotions, expectations are most often not driven by a formal strategy. The article mentions the need for both the Formal and Informal organizations to coexist and be in Sync in order to be able to engage effectively with employees and establish a relationship or a connect that goes beyond “numbers” or “targets”. It takes the case of Ed Carolan, a Senior VP at Stockpot, and explains how he turns around a rather sluggish “Soups” business to a vibrant, rapidly growing business through the period of the 2008-2009 financial downturn.
It is interesting to note how Ed and team combine the Rational and human sides of business to come up with clear simple goals that strike a resonance with their employees.
Given the tremendous pressures most businesses have witnessed in the last year or so, and the resulting imperatives of meeting new targets and expectations, the article comes as a timely reminder to senior management to take a step back and ensure that they get the right balance of the Formal and Informal sides in their organizations. It could just be the difference between making or breaking your business in these tough times.
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