Every organization has a formal organization, and in 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 together – in 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! Here is what he says 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, helping everyone understand what he or she needs to do to help the enterprise 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 point – regular meetings of key people are essential. As I have written often on this blog:
“You accomplish what you meet about.”
This book is a logical book – meaning, it takes you through a step-by-step process on what a new organization needs to do at each stage of development, all in pursuit of turning ideas into successful enterprises, well-served by its developing organizational structure. And this all revolves around successful actions taken by the leader – the entrepreneur practicing entrepreneurial leadership.
Here’s my suggestion: if you are starting a new enterprise, as you put in all the time on the “work” of your enterprise, carve out the time to read these two books carefully:
Then, read Startup Leadership by Derek Lidow. It will give you some of the needed nuts-and-bolts of what to do, to help you lead the effort, as you “do” the work that your heart is ready to tackle.
A note: the book is useful overall, but Mr. Lidow has done his readers a valuable service with some terrific appendices. He has eight, including: Ten Basic Strategic Questions. A sampling:
Who will want to buy your product?
Why will they want to buy your product?
How much will they be willing to pay?
How much will it cost to make and deliver the product?