Survey Finds Most Workers in Big Companies (65%) Rely on One Another, Not Management, to Solve Problems... and Many (37%) Ignore Company Rules Because They Have a Better Way to Get Things Done: Study by Consulting Firm Katzenbach Partners Confirms that the "Informal Organization" Is Where Most Employees Turn to Find Job Satisfaction - and to Make Their Companies Succeed Managing Informal Networks is Critical - and that Means Keeping the Formal Organization from Getting In the Way

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A new survey of American workers confirms what many have long suspected: Informal relationships, rather than formal management structures, are where work really gets done, problems are solved and companies gain competitive advantage.

There's a real opportunity to drive business performance investing in the informal organization.

    The "informal organization" is also what keeps people upbeat about work. According to the survey conducted by Katzenbach Partners LLC, a management consulting firm that works with leading global companies to achieve breakthroughs in organizational performance, the informal organization gives workers confidence that they can solve problems and the encouragement that they contribute to their company's success.

"The lesson from this research is that the informal organization - the way work gets done outside formal organizational charts and processes- is real, and that employees recognize it and value it," said Zia Khan, a Principal with Katzenbach Partners, and co-author of a major upcoming report on the informal organization. "The question is, does management also value it? Our research shows that the informal organization is a strategic asset executives need to actively manage instead of leaving to chance."

The telephone survey of 510 American workers at firms employing 1,000 or more employees(1) shows that to solve problems and find on-the-job satisfaction, U.S. employees don't turn to the company - they turn to each other. The findings also indicate that Americans who work for larger companies are generally satisfied with and fulfilled by their jobs - largely because of the informal dimensions of their work and interactions.

The Informal Organization: How Things Get Done

Americans who work at big companies cite the relationships that form - informally - among co-workers as what make the company tick.

-- Most people - 65% - who work at big companies say "employees rely on themselves and co-workers to provide solutions and solve problems." (Only 30% say they rely on managers for solutions and problem solving.)

-- Nearly two out of five big-company employees (37%) say they sometimes "ignore company rules because they've developed better ways of getting work done."

-- Nearly all big-company employees (90%) say they have someone at work to turn to when they need to get something done - and that they turn to that person because they respect their knowledge and experience. Interestingly, that person is more likely to be a co-worker (52%) than a boss (45%). (41% say it's a co-worker in their department, while 11% say it's a co-worker in another department.)

-- Most employees (57%) believe that the best ideas for making the company more successful come from "all levels" of employees. Only 8% believe the best ideas come mainly from the CEO or president, and only 7% believe they come mainly from senior managers. However, one in 10 employees believe the best ideas come mainly from middle managers, and 15% believe they come mainly from lower-level supervisors and lower-level employees.

"Clearly, workers at big companies rely on, respect and leverage their co-workers and work friends. They turn to this 'informal organization' to get the most out of work - and to be more effective," said Khan.

The Underlying Message: Companies Undermine Productivity, Motivation, Organizational Effectiveness and Their Ability to Implement Significant Change when They Fail to Mobilize the Informal Organization

Added Khan, "Our research also shows that when people are frustrated about their work and ability to get things done, it's often because managers aren't incorporating an awareness of how informal networks work in their planning and decision-making."

-- The barrier to getting things done that people who work at big companies are most likely to cite is "too much bureaucracy." Nearly two in five (39%) employees cite that as the key barrier. And more than a quarter of employees (26%) say "lack of value placed on employee input" is a major barrier. Meanwhile, 23% of employees point to "formal" solutions, saying the barrier is "inadequate organizational structure."

The survey data suggests that managers' awareness of and ability to mobilize the informal organization significantly impacts how employees feel about their work, to a much greater degree than their "style" of managing does. In fact, the survey results highlight that employees in companies where management is aware of the people that co-workers rely on for guidance are much more likely to enjoy their jobs than those in companies in which management lacks that insight.

Worker Sentiments Suggest that Many Companies Need to be More Sensitive to Informal, Organic Connections

Even though most workers credit the informal connections where they work with enabling them to get things done, a sizable minority suggests that companies squelch those networks. "It's when organizations aren't sensitive to how informal networks can complement formal structures that you get frustration and bottlenecks," said Khan.

-- While most - 58% - employees say management regularly seeks and values employees' ideas before making changes, nearly two out of five (39%) say management fails to do so.

-- Those who say management doesn't seek and value employee input are far less likely to say change comes easily to their companies (36%, vs. 63% of the people who say management seeks input).

-- One out of five (20%) workers say management is not aware of employees whom co-workers rely on for information and advice on how to get things done.

-- Those people who believe management is aware of employees that co-workers turn to (79%) are significantly more likely to say change comes easily to the organization (57%, vs. 35% of the people who say management isn't aware of go-to co-workers).

-- More than one in five - 21% - workers say their companies do not encourage employees at all levels to contribute ideas for improving business operations and products.

-- 15% of workers say they're unlikely to share (with someone inside the company) their ideas on improving how things get done.

People at Big Companies Like Their Jobs; Nurturing and Leveraging the Informal Ties Between Workers Increase Satisfaction and Motivation

"Most Americans are happy at work, and our research shows that strengthening the informal organization can make them even happier," said Khan. "There's a real opportunity to drive business performance investing in the informal organization."

The results show that when people enjoy and feel fulfilled by work, one of the main reasons is their relationships there:

-- Most people - 59% - say they enjoy work "a lot," and a third (33%) say they enjoy it "somewhat."

-- People are as important as the work itself. The part of the job that people are most likely to cite as being enjoyable is "the people I work with." 64% of workers cite that as enjoyable, while 62% cite "the work I do every day." (In comparison, only 46% cite "the income I earn" as being an enjoyable job aspect.)

-- The vast majority - 84% - of workers say they have someone at work in whom they can confide. Most people - 71% - say that person is a co-worker, and only a quarter say it's their boss.

-- Nearly half of workers - 44% - say they regularly socialize outside of work with co-workers.

"The survey findings confirm what we have long observed - that the informal organization is a significant institutional asset that drives innovation, cross-functional collaboration, constant improvement and customer service," said Khan. "But leaving it unattended is a significant missed opportunity. Companies that want to benefit from it need to understand it and mobilize it by helping to facilitate connections and drawing clearer links back to major strategic imperatives. With management support, the informal organization can be an engine for driving employee productivity and business performance."

For more information or a copy of the accompanying report, "The Informal Organization," please contact Alexandra Corriveau at Sommerfield Communications, Inc. at 212-255-8386 or alexandra@sommerfield.com.

About Katzenbach Partners LLC

Katzenbach Partners LLC works with leading global companies to achieve breakthroughs in organizational performance. The firm applies new thinking about how organizations work, serving companies across industries to shape strategy, improve operations and effect change. Katzenbach Partners is building a different kind of consulting firm, one that integrates strategic problem solving with pragmatic insight into people and organizations. http://www.katzenbach.com

(1) This report presents summary results from a random and representative national telephone survey of Americans employed at firms with 1,000 or more employees. The survey was conducted on behalf of Katzenbach Partners LLC by Michaels Opinion Research, Inc. over the period of November 10-16, 2006. Data are based on responses from a total of 510 adults living in the continental United States who self-identify as working full- or part-time at firms with a global workforce of 1,000 or more. The margin of error based on the total national sample size of 510 is +/-4.3 percentage points and is greater for smaller sub-groups of respondents.

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