The technology vice president of a local financial services company was frustrated. A bottom-line strategy depended on the success of a recent reorganization. Unfortunately, the reorganization was not generating the expected results. In fact, people were behaving just as usual, despite new reporting relationships and a redesigned divisional structure.
This situation is more often the case than not: leaders design and institute strategies that fail to achieve results. According to a 2006 McKinsey survey, only 38 percent of change initiatives were completely or mostly successful at improving performance.
In other words, even when strategies are successful, they don’t come close to returning intended results. The world throws leaders curve balls: market changes, skill gaps, technology shortcomings, and so on. What’s valuable during and after a reorganization are rapid communication, resiliency, and adaptability.
Luckily, leaders already have a powerful resource that can supply these competencies in their own organizations. This resource is the informal human network.
Hidden Systems, Untapped Resources
Behind every organization chart are informal human networks that people access in order to get things done. Every day, people discover who has the knowledge and skill they need. They hear that Joe in marketing is an Excel guru, Mary in accounting can reach any member of the executive team at any time, and Cathy in sales has a talent for fixing operational problems. These abilities usually aren’t recorded anywhere in the organization; people learn about them only through experience or word of mouth.
Informal human networks develop as people selectively forge relationships with the Joes, Marys, and Cathys of their companies in order to achieve their goals. These relationships aren’t represented on organization charts. Yet they form a robust, productive system that fuels strategy implementation.
Successful companies have learned that the informal system can make the difference between a strategy that succeeds and one that fails. Leaders seeking to implement strategies successfully and realize full financial value from their efforts can tap into this hidden, powerful system. Some examples of informal systems succeeding are below.
Finding Communication Hubs
One company used the informal system to get a knowledge management strategy back on track. Despite a new matrixed structure, people had replicated the old functional structure by maintaining previous contacts and neglecting to form new ones. To shift the pattern, leaders found communication hubs — people who naturally and constantly transmit information — and assigned them to a special task force. As expected, they shared information, which then spread through their silos and began breaking down barriers.
In another example, a technology organization used the informal system to strengthen its membership retention strategy. An analysis of the informal system showed what no one knew: New members were having difficulty integrating into the community. To resolve the issue, leaders identified informal connectors among the more seasoned members and paired them with new members. The new members quickly integrated into the organization with the help of their mentors.
Making Staffing Decisions
Finally, when a merger caused a redundancy in staff positions, leaders drew on the informal system to help make retention decisions. Using a tool called “network analysis,” they gained a picture of the informal relationships within the organization. That picture gave them important information they need in order to realize the intended cost savings from the merger. They were able to retain not only star performers, but also the people whom others relied upon heavily for innovation.
These three companies share the ability to tap existing informal systems in order to enable strategy implementation. They used pragmatic, concrete methods to link the right people and drive execution. These methods are available to all. Leaders who use them gain a significant asset in their quest for results.