Recent forestry research has uncovered new scientific evidence: the highly complex, belowground roots network has a much more advanced function than historically understood. It allows trees to communicate with one another and share scarce resources, including between species, as explained in this captivating Ted Talk ‘How trees talk to each other’ (2016).
There is a straight analogy to management and organizational theory. Incidentally often presented as tree charts, the formal organization provides a valuable framework that structures activities within the organization and with third parties.
In contrast, the rich, informal organizational network is invisible to the naked eye. It relies on long-standing, individual relationships and represents the true foundation of any organization. Besides, this informal organization is highly efficient and effective: it builds and nurtures connectivity where connections add value only, not when it is a source of wasteful distraction (see ‘The Connectivity Myth’).
In ‘Informal Networks: The Company Behind the Chart’ (1993), the authors find that leadership teams are fully aware of the existence of informal networks. Yet, they establish that management have a superficial and flawed understanding of them. The authors advocate the use of network analysis to map the social links within the firm. Following this approach enables executives to foster agility, creativity, and resilience.
During the pandemic, the formal organization could be seen striving on videoconferences, with many applauding a new and efficient way of conducting business. It has all been swell in the visible world with its neat reporting lines, orderly, agenda-hugging committees, and tightly-run, transaction-focused meetings.
But the health crisis has shaken the informal organization. It has weakened vital social ties connecting people within it and with its stakeholders, as discussed in ‘Employee Engagement and Wellbeing in Times of COVID-19’. In fact, employee engagement has declined during the crisis. Below the surface, some extensive damage has been done to the corporate ecosystem, with negative consequences for sustainable performance.
Addressing this trend is a necessity to avoid a corporate form of ‘long COVID.’ It all starts with a well-orchestrated return to the office. In that respect, ‘A CEO’s guide to Planning A Return To the Office’ is full of commonsensical advice. The article also warns that ‘decisions CEOs make over the next few months will set the tone for how work will be done in the future, impacting the relationships employees have formed and their emotional connection with the company.’
The companies that accelerate the revival of the informal organization and nurture it will build a lasting competitive advantage.