Similarities all organizations share

An organization, as the term implies, is not an informal group. It is a formal social structure that has created a social bond in order to process some type of raw material into a finished good (whether that finished good is something that can be touched, created by other things that can be touched, or a service created by the raw materials of people’s time and effort). Organizations are formal because they are legal entities and therefore must abide by laws, regulations, standards, and contracts (and hence why they must pay attention to compliance issues). They are social entities because they are a collection of social elements and structures (each person playing a part and even their technologies playing a part in the system).

The best way to think of an organization is as a collection of rights, privileges, obligations, and responsibilities that are balanced over time through conflict and resolution. In other words, an organization is a collection of relationships and interactions. Throughout time, these relationships and patterns of interaction become established as practices within the organization; for instance, a way of creating products, holding meetings, deploying technology. Over time, through both habit and repetition, these practices become institutionalized – thus forming the structure of the organization. As time goes by, people within the organization draw from this structure when interacting with each other. In simple terms, interactions form structure, and that structure influences interactions.

To understand how we all interact within our organizations, we have to understand how this structure gives rise to power, meaning, and norms. We’ll call these three the control environment because that is what the regulators call these properties.

They all have power sources

Power comes into play by providing the organizational capability for us to accomplish something. It could be the power to transform the raw materials into a finished good, or the power to transform the organization itself.

There are two types of power in every organization, authoritative (power extended over people), and allocative (power extended over material things). If you want, you can think of the CEO (authoritative) and the CFO (allocative). Every organization has the person who wants to get something done and the person with the budget. These two types of power are not symmetrically balanced either (hence they are asymmetrical). As this asymmetry is drawn upon for guidance, leadership, and funding, the existing structure of power is reaffirmed (or imperceptibly shifted over time).

Their power structures beget meaning

In any organization anywhere, when folks work and interact with each other, they are drawing on organizational rules that define interaction. The social scientists who study this stuff call these rules “meaning” or “shared knowledge”. They point out that this meaning orchestrates our interactions with each other. You could almost call this the implicit or hidden policies that affect our explicit actions.

There’s a great example of this from True North Communications, which is now called Interpublic Group. At the time, the CEO was Bruce Mason – a former tank commander and a very take charge person. Bruce never “gave an order” but always “asked a favor.” Same thing. And the staff surrounding him knew it. And the brand new EVP and CIO (me) didn’t. But only the first time. I never made that mistake again.

Power and meaning come together to create norms of conduct

And no, we don’t mean norm, the guy from the now defunct “Cheers” television show. Norms are the organizational conventions that govern “appropriate” behavior. It is the moral order of the organization that is sustained through socialized practice and tradition.

Everyone knows the differences between laid back organizations and up-tight organizations, and how people interact differently with each other in both. As my founding partner and I are both consultants (Network Frontiers) and lawyers (Perkins Coie), we interact with many organizations and can watch our own teams change their interaction behavior as they move between different organizations with different social structures. You have to change your interaction behavior to fit the organization or group you are dealing with. A laid-back person in a button-downed group will simply be ignored. A buttoned-down person in a laid-back group won’t be taken seriously.

What are your organization’s norms of conduct?

It helps if someone has documented the organization’s norms of conduct, like those shown below.

norms of conduct

However, good luck with that in most organizations. If they aren’t documented, you’ll need to internalize them from watching your surroundings.