What does it mean to have a "Formal Culture" and an "Informal Culture"?
Have you ever instituted a new policy or procedure into your organization, spent countless hours and dollars trying to drive the initiative throughout the organization, only to see it fall flat? Organizations large and small face a similar problem -- how to make their organization become what they envision it to be.
When organizational experts refer to the overall performance of an organization, they often use the word “culture”. While there is disagreement on the exact definition of organizational culture, most would agree that it includes the values and behaviors that the majority of participants engage in; what most of the people believe and do most of the time. This is called the “informal culture” as compared to the “formal culture”, or what the leadership wants the culture to be. It makes no difference if your organization is a large corporation, a small “mom and pop”, a non-profit, or an educational institution, each of you have a formal and informal culture. One aspect of great organizations is that they close the gap between the two cultures so that “what’s going on - out there” very much resembles the vision of leadership.
“Informal Culture is what most of the people believe and do most of the time.”
You may wonder if these great organizations close this culture gap by hiring the “right people”, or if they do something more intentional to close this gap. The answer quite simply is both. Great organizations start with great people, but they also understand and affect the other aspects of their culture.
The Best Organizations
The best organizations don’t stop with simply creating rules and policies, they do much more to impact the everyday behavior of their employees. If you’ll refer back to our August 2012 Post on the role of contextual factors in industrial safety incident prevention, the very best bosses and organizations understand that human performance is a result of complex systems. Organizational factors such as rules, policies, and reward systems are only a portion of the complex system that drives human performance. The best organizations understand that it is also people, both the individual and intact teams, plus surroundings that drive their overall performance. If the employee base has failed to implement a new directive from leadership, there could be several reasons affecting this. It could be that employees don’t understand the new initiative, operational pressures contradict the initiative, they don’t have the equipment necessary to make it happen, or a myriad of other factors. The very best organizations are those that are able to gather field intelligence detailing actual performance and factors driving the performance, and then institute corrective measures that enable the workforce to align their own performance with the vision of leadership.
So what does that mean for you if you are in an organization with a gap between your formal and informal cultures? We would first encourage you to perform a cultural analysis to get a better understanding of your informal culture. With this knowledge you will be able to understand what contextual factors are driving the performance of your employees. This information will allow you to initiate corrective measures to close the gap between your formal and informal cultures. The best organizations don’t make the mistake of simply focusing on changing people, they focus on the entire context to enable those on board to perform to a higher standard.