I had a moment of clarity last week while holding an open space at Online. I hesitate to call it an “ah-ha” moment. It’s more of a “well….duuuhhh!” moment.

Hold Tight!

All organisations have formal systems and informal systems. You know the formal bits because formal usually means explicit – the org structure diagram, job descriptions, line (or matrix) management structures, written policies, mission statements, value statements and vision statements and the group and individual objectives (supposedly) derived from them and the behaviours that go with them – making a request, filling in a form, going to see the right person in facilities management, appraising staff performance, project and programme reporting. They also have formal links with customers, suppliers and other organisations – official channels. This is the bureacracy.

The informal or shadow systems are the links between people that may have nothing to do with their official roles or structures. This shadow organisation arises because the formal systems cannot be efficient or effective outside of certain limits. Ralph Stacey in Strategic Management & Organisational Dynamics (dreadful title – great summary and important critique of the development of modern strategic management) points out that there are two main reasons for bureacratic control failing to produce what it’s supposed to: the adverse human reaction to bureacracy (Yup! as I typed that previous paragraph I shuddered at ever having to be part of one again) leading to alienation, passive dependence, work without significance, deskilling and provocation of undesired or unintended behaviour. In addition, formal systems can’t deal well with ambiguity or uncertainty. So these informal groups, unofficial ways of behaving, doing business through social activities and networking grow up to allow the organisation to operate more effectively and efficiently. Remember too that unlike the formal part of the organisation, the boundaries of the shadow systems are permeable and always changing, making new contacts in “the industry” or “the sector” as and when opportunities arise.

Furthermore, it has been pointed out that the shadow organisation is the place where innovation and creativity are allowed to flourish. You can’t make new stuff effectively within a formal process. Creativity requires messiness, mistakes and flexibility around time. Innovations happen in the informal world – and, from time to time, when they are useful to the formal world, they become systematised and turned into policy or else they remain “the way we do things around here”. Note also that the organisation as a whole is the same bunch of people – just that they move over time between formal and informal modes and activities, however, my experience has been that there are people who feel more at home in the informal systems (cool dudes like me – heh!) and others who spend most of their time formally (tight-arsed pen-pushers – natch!)

Now, what came to me on Monday with a thud was that it’s these informal groups and activities that are supported by “social software” Blogs give people the opportunity to say what they want and talk about it, outside of any established order – just talk about what’s on your mind. Wikis allow for a meritocracy in collaborative documentation and policy/decision making. Social networking tools allow you to find and foster new connections outside of the org chart.

Examples of how this is working are coming thick and fast.

Do you believe that Threshers have mastered a process for viral marketing or was it a Stormhoek snowball kicked down the hill by Hugh?

For intellectual stimulation and working with new ideas there’s no competition between an openspace event and any one of the established panel-based conferences. Online was better this year, but still has some way to go.

Check out the reaction to Microsoft’s Zune player and then see what is coming from an informal, asynchronous conversation between Rojas, Winer and Calacanis have suggested and why Rowica might have more search results someday (or might not) (hey listen to the podcast of these guys chatting). OK, I like Rowica, but it seems it’s now dubbed the RWC Player.

So when we take social software or social media and try to sell it (through formal channels) as a part of the bureacracy – to replace something formal, it’s not surprising that we get asked about ROI and metrics and to prove “what’s in it for me”. And when we just take a risk and start something as an experiment that then just works, these questions get asked less and less.

That’s why I’m excited about the next round of Policy Unplugged social conferences which we’re branding as ‘Uploading’. The starting point for these events is that the tools exist, they are part of the ecosystem and it’s no longer about whether you should adopt them, but how you can best adopt them to get things done. And I would suggest that looking at the informal systems in organisations and within industries are the place to start that conversation.

Well…. duuuuuhhh!!!

Bonus Link: Johnnie is re-reading Patricia Shaw. Good move.

tags: innovation & complexity & management & social tools & rowica & policy unplugged & stormhoek & ralph stacey & RWC

Cartoon by: Hugh MacLeod

Meteor: Hey look at me, I’m new and exciting and add something really useful to what we’re all trying to do here. I let you do the stuff that you’ve always wanted to do.

Dinosaur: You are a dangerous fanatic. Your “innovation” is not new. You can’t do what you’re doing without breaking what we’ve been doing since time immemorial. What you’re suggesting will lead to the end of civilization as we know it.

Meteor: No, you misunderstand, I’m here to help you. You can still do things the way you’ve always done them if you like, but really, these are problems that I’ve heard you moaning about – aren’t you pleased?

Dinosaur: Your “solution” is of no use to me. I cannot see how this helps me. I cannot see how to do your thing and keep doing my thing too. I also have a range of academic and expert evidence to prove my point. I have powerpoint slides too. You are threatening my existence. I have no choice then except to destroy you. I will survive.

Meteor: OK, but I’m still here to help you if you want. When people ask you about it next year and you don’t know what to do, give me a call. I love you Dino.

I’m at Online Information 2006.

Rosie drew this comment out of me last night on the previous post and even in the cold light of day I thought it worth promoting to the front page:

I think it comes down to a simple premise – that good, lasting, profitable business arises out of good relationships. How do you improve any relationship? You give more and that’s how you get more. As you sow, so shall you reap, if you like (omigod, i can’t believe i’m quoting scripture… on my blog!)

So what I’m saying is that by giving more to the online relationship (making content, telling stories, providing a homely comfortable space, encouraging creativity among the audience, breaking down the barriers between artists and audience) rather than spending their energy on finding more efficient ways to extract money out of people, everybody ends up winning.

Theatres spend an awful lot of money trying to do those things above, but only in a physical space – and the crazy thing is, that it doesn’t cost a huge amount in order to do this stuff online.