I've been toying around with a new hypothesis. Here it is:
Formality in business is dying.
Now I am not talking about Blue Jeans Friday and Bring Your Pet to Work Day all of the sudden cropping up everywhere. I've seen very formally-run businesses where people showed up in jeans with their dogs or whatever. So much superficial informality.
What I'm talking about is a fundamental shift of business culture and management practices from formal to informal in many innovative companies. What do I mean? Let's take a step back.
Here are two of the ways Merriam-Webster defines the word formal.
- relating to or involving the outward form, structure, relationships, or arrangement of elements rather than content
- having the appearance without the substance
That first definition of formality stands out for me as a perfect description of almost every formal business practice I have ever encountered. "Relating to or involving the outward form, structure, relationship of arrangement of elements rather than the content" (emphasis mine).
Organizational charts. Job titles. Performance reviews. Operational reviews. Strategic planning projects.
In your experience, do these things usually reflect the man-on-the-street reality of the business? Or are they an attempt to impose structure on things that do their best to defy it?
The irony is that, while most formal business practices are attempts to manage the complexity of business by defining structure, they usually fail miserably to capture the true complexity of business. They focus on the structure rather than the real content—and they usually don't even get that right.
In my experience, most business practices that attempt to formalize structure are about as successful as attempts to construct buildings out of clouds. By the time we finish the plan, everything has already changed beyond recognition.
No wonder in the latest IBM Global CEO Study, the #1 issue on the minds of CEOs is how to manage complexity. Most CEOs don't have the right tools to manage complexity.
More often than not, they are managing clouds.
I believe that managing complexity is something the open source way does very well, for reasons I already outlined here. Companies approaching things the open source way already understand that in order to succeed they must surrender some control to the communities in which they operate. They must allow the clouds to float freely.
So why do we cling to the illusion of control? Why do we waste our time imposing superficial structures, focusing on (to paraphrase the second definition of "formal") the appearance rather than the substance of our businesses?
Doesn't it just give us the illusion that we are more in control than we actually are?
I was listening to Gary Hamel speak on a webcast last week, and he gave some examples of very big, prominent companies that are experimenting with eradicating certain types of formality. Crazy stuff like doing away with job titles, minimizing the role of formal management and moving toward an informal leadership model, empowering ideas to come from anywhere vs. through a formal top-down process.
What if we all started looking closely at our businesses for places where the formality we have imposed has caused us to lose sight of the underlying content? Where our efforts to create structures we can understand have oversimplified things that remain incredibly complex. What if we systematically ripped these things out of our organizations one by one?
Could we manage clouds better with less formality? What might an informal business look like?
I'd love to hear what you think.