The Power of Informal Systems in Driving Organizational Success
In the fast-paced world of business, achieving success is all about making the right moves at the right time. Many organizations focus on formal systems and processes to gain competitive advantages. However, informal systems can be highly influential in driving organizational success as they are more fluid and flexible, catering to the dynamic and ever-changing needs of an organization. In this article, we’ll be exploring the power of informal systems in driving organizational success.
Understanding Informal Systems
Unlike formal systems that are set through official policies and procedures, informal systems exist spontaneously within an organization. They are the unspoken ways of doing things that are often based on custom, tradition, and intuitiveness. Informal systems are typically developed and maintained through the behaviors and attitudes of employees, making them more intrinsic than extrinsic in nature.
Informal Systems Promote Innovation
Innovation is a key driver of organizational success, and informal systems offer a conducive environment for innovation to thrive. Informal systems provide a platform for employees to express their ideas freely and collaborate across departments without the bureaucratic constraints that often hinder creativity. The fluidity and flexibility of informal systems allow for a more agile response to emerging trends or opportunities, making it easier for organizations to pivot directions when necessary.
Case Study: Google’s 20% Time
One of the most notable examples of informal systems promoting innovation is Google’s 20% time policy. This policy allows Google employees to dedicate 20% of their work time to pursue their own innovative ideas outside of their regular job duties. This informal system has resulted in many successful products and features, including Google Maps, Gmail, and AdSense.
Informal Systems Enhance Employee Engagement and Retention
Employee engagement and retention are essential elements to drive organizational success. Informal systems play a critical role in enhancing employee engagement and reducing turnover rates. By providing a sense of belonging and emotional connection, informal systems create a positive work environment that fosters employee motivation and loyalty.
Case Study: Zappos’ Unique Corporate Culture
Zappos’ unique corporate culture is heavily influenced by informal systems. They have implemented various informal systems, such as mandatory company events, team-building exercises, and a relaxed dress code, to create a fun and engaging work environment. This informal approach has resulted in high employee satisfaction and low turnover rates, making it a critical factor in their success.
Informal Systems Contribute to Organizational Learning and Knowledge Management
Organizational learning and knowledge management are vital components of driving organizational success. Informal systems facilitate knowledge sharing and transfer among employees, helping to create a culture of continuous learning that supports long-term success.
Case Study: Pixar’s Braintrust
One of the most notable examples of informal systems impacting organizational learning is Pixar’s Braintrust. The Braintrust is an informal system in which a group of Pixar’s top leaders, who are referred to as “the creative elite,” come together to provide feedback on each other’s work. The Braintrust serves as a platform for knowledge sharing and constructive criticism, leading to better quality products and increased organizational learning.
Conclusion
Informal systems play a critical role in driving organizational success. They cultivate an environment that promotes innovation, enhances employee engagement and reduces turnover rates. Additionally, informal systems support organizational learning and knowledge management, creating a long-term competitive advantage. Any organization that wants to achieve and maintain success should recognize the value of informal systems and strive to implement them effectively.
