Book Summary of Katzenbach, J.H. And Z. Khan (2010). Leading Outside the Lines: How to Mobilize the (In)Formal Organization, Engage your Team, and Get Better Results. Booz & Company, Inc.
What are the major theses of the book?
Katzenbach and Khan found that most organizations naturally fell into a formal or informal category, but the most successful integrated and merged aspects of both styles of management. Those that did this would have "a real and sustainable competitive advantage" and would ensure that strategies and values of change would permeate all levels of the organization and all aspects of its work. Formal organizations have the virtue of "efficiency and clarity" while informal ones have "the flexibility and speed of the social networks and peer interactions that connect people informally." People do not always act on a formal basis of pay, benefits and bonuses but also have "emotional sources of motivation that commit them in ways that formal mechanisms cannot" (Katzenbach and Khan, p. 4). They noted that managers and employees often combined in informal networks to resist all change, and therefore senior management had to make "a purposeful use of informal networks to achieve a goal or bring about a change" (Katzenbach and Khan, p. 5). Formal organizations are almost never receptive to change, even under extreme circumstances when the world is changing all around them. In some respects, this is good since "the predictability and repeatability of the formal organization are among its big benefits," even though it tends to "freeze up" when confronted with real crises or difficulties (Katzenbach and Katz, p. 142). No real change will ever take place unless mangers and frontline employees are convinced of a real need for it. Katzenbach and Khan did not urge a complete elimination of formal management methods, just a realization of the limits, and managers had to learn to "avoid viewing the informal organization as unruly chaos" (Katzenbach and Khan, p. 198). The best method to bring about change was to free the "fast zebras" while melting the "frozen tundra" of middle management" (Katzenbach and Khan, p. 9).
2. Defend or rebut the major thesis of the book include the qualifications of the authors to write the book.
Jon Katzenbach started out in the 1950s as an advocate of the formalist style of management, especially when he served as a naval officer. Even in the military, though, he discovered some officers who led in a more informal manner, and that people could be motivated by "the pride they took in their work and the emotional commitment they had to their jobs" (Katzenbach and Khan, p. 17). Later, he served for over forty years as a consultant at McKinsey & Company and then at Katzenbach Partners, which is part of Booz & Company. He has written numerous books and articles on teams, the function or organizations and motivation. Zia Khan has a PhD from Stanford University and worked in academia for many years, and then as a consultant at Katzenbach Partners. Currently, he is a vice president for strategy and evaluation at the Rockefeller Foundation (Katzenbach and Khan, p. 5).
The authors are certainly correct in observing that most mangers have been thoroughly trained in formal methods, especially those in finance, operations and technology. They think in terms of "job descriptions, organization charts, process flows, scorecards and physical structures," and for them "leading outside the lines is harder than managing within formal lines" (Katzenbach and Khan, p. 3). They simply to not have the training, education and experience to manage in an informal way, and those who have learned how generally did in an informal way. They are also correct that in most of history, only small organizations and specialized teams were managed informally, while larger organizations have always had very rigid, formal structures. This is changing very rapidly, however, due to globalization, the Internet and Facebook, which means there are going to be more "informal and non-hierarchical initiatives rather than…relying so heavily on formal, top-down rules of engagement" (Katzenbach and Khan, p. 4). Their observation that organizations are becoming more informal due to the Internet and other new technologies is a commonplace observation by now, and organizations that cannot determine how to use these effectively will not survive in today's global marketplace.
3. Compare and contrast the nature of qualitative and quantitative evidence used for each book/chapter selected.
This book was aimed at senior managers and leaders of organizations, and was based on interviews with them and many onsite observations. Katzenbach and Khan spoke with CEOs in Silicon Valley, for example, who were extremely skeptical about any ideas involving informal organizations, whose advocates they regarded as "clueless about business realities" (Katzkenbach and Khan, p. 7). They observed many formal organizations that manage change by setting an objective, developing and implementing a plan, and then continuing to "push harder" when the plan does not work. Eventually, people begin to "abandon ship" and the planners "redefine the objective and declare victory" (Katzenbach and Khan, p. 141). Of course, they have really changed nothing at all, despite considerable effort. This book described "some of the complexities involved in getting the best from both formal and informal organizations" and the "many different ways that leaders can achieve integration of the two" (Katzenbach and Khan, p. 149). They found many examples of managers who led in an informal way, such as Tony Kwok in field operations and Henley MacIntyre at the United Nations or others who were engaged in school reform.
4. Explain how the book offers an opportunity for you to think in an innovative manner in your organization, in your interpersonal influence, and in your personal commitment to change.
In the late-19th and early-20th Centuries, Frederick Taylor's scientific management rationalized the organization of the new mass production industries of the United States in a singularly rigid manner. Taylor's rational, top-down, hierarchical style of management "dominated business organizations for the first half of the twentieth century" (Katzenbach and Kahn, p. 13). In the factories, the process of production was broken down to its smallest components with each worker performing the same simplified, repetitive tasks. They took no part in management, planning, organization of tasks or design, which was left entirely in the hands of professional, technical and administrative personnel in the laboratories and front office. This was beginning of the modern division and hierarchy between blue-collar and white-collar labor, office work and production work. Often the process was automated, since Taylor sought to suppress individualistic traditions of craftsmen and artisans in the name of maximum economic efficiency. Henry Ford applied Taylor's ideas to the assembly of automobiles, which greatly lowered their cost and opened the door to the mass consumer society of the 20th Century. Indeed, the mass production and mass production system sometimes goes by the name "Fordism."
Like any other fast food restaurant, McDonalds is a small factory that operates on the same principles, with each unit putting out the same standardized product, unlike higher-end restaurants where trained chef prepare individual meals from scratch. Ray Kroc famously said that "we cannot trust some people who are nonconformists. This was the standardized mass production model of the mid-20th Century that Ray Kroc followed with the McDonalds franchises, everyone of which was to be a clone of the other. Writing around the same time as Taylor, the pioneering sociologist Max Weber described the organizational principles of the new state and corporate bureaucracies that were coming into being in the 20th Century: rigid hierarchies and job roles; specialization; impersonality; predictability; technical competence and efficiency; formal, written rules, procedures and communications. Needless to say, critics of these bureaucracies found them highly dehumanized and alienating, and of course not at all democratic in structure.
5. Describe two new insights you gained and how you will use the insight to affect your organization.
Almost all major change initiatives fail within a year or two, despite (or perhaps because of) intensive planning for change. Leaders who learn to think outside formal organizational lines will have more "impact" in bringing about change (Katzenbach and Khan, p. 13). Compared to the early- and mid-20th Century, rapid changes in communications and information technologies is making this old organizational model obsolete. In the postindustrial, postmodern West, organizations are becoming 'flatter', more decentralized and flexible. They also include more women and minorities than in the past, even in managerial and professional positions that were once closed to them. Older Fordist/Taylorist industries have moved offshore to China, Mexico and other developing countries, while the economy of the West has become increasingly based of technology and services.
In government bureaucracies over the last thirty years, the overall trend has been toward greater decentralization, deregulation and privatization, even in countries with strong welfare provisions and social democratic traditions like Sweden. Economic decline of the older manufacturing-based economy and rising costs led to these changes starting in the 1970s. This led to more decentralization and local autonomy in the provision of welfare…