How Solutions Rise
Formal vs Informal Power
The best lesson I ever learned about power came from Ted Jenkins, an engineer who was one of the first hires at Intel.
I interviewed him decades ago for my book The Web of Inclusion. I asked what made Intel so skilled at drawing innovative strategic ideas from people at every level of the organization, working across both hierarchies and divisions. Ted said it was Intel’s ability to let resources flow to wherever a problem or challenge needed to be met.
“In many companies this doesn’t happen,” he explained. “Resources accumulate and get stuck around people who hold positional power. So what you end up with is a few powerful people who have more resources than they need or can use, while everybody else has to make do with less. It’s irrational, static, and inefficient.”
Ted also noted that companies have traditionally been structured to validate and exalt this one kind of power.
Yet position alone is a crude way to allocate or even measure power. It ignores the ways in which informal power— the kind that is not derived from title or position alone— actually operates in a diverse organization: that is, via the routes and tendrils of connection which may be invisible on the formal org chart, but exist nonetheless. And it ignores the potential fruits of informal power, which can be a huge source of creativity and critical first-hand knowledge of an organization’s processes and output.
So why is informal power so often ignored?
The answer is that in many organizations and political structures, non-positional power is viewed as a threat. This means that bad ideas get acted on for reasons as simplistic and unstrategic as “the boss likes it.” The result? Imaginative solutions languish unsupported within the informal power structure. This constituting an enormous opportunity cost. Not only do those innovative solutions fail to get implemented, but resentment often begins to breed among those whose ideas are repeatedly stifled or unheeded by those who hold positional power.
Not an ideal situation for generating high performance.
So what steps can be taken to avoid this dynamic?
The first and most important step is for leaders, in particular boards, to recognize that healthy organizations are shaped by informal as well as positional power.
In the coming weeks, I’ll be discussing the various forms of informal power and showing how they can complement positional power in ways that foster both a more inclusive workplace and a higher performing organization.
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