Mike Lehr's Blog

The power someone has as a leader in an organization is a function of 1) the authority it gives him and 2) his personal influence within the organization. The former is formal organizational power (FOP) and the latter informal organizational power (IOP). Figures 1 and 2 help us visualize their difference.

Figure 1: Formal Organizational Power

The importance of IOP becomes more apparent if we view leadership beyond a management context. For instance, one client expanded its definition from those in management to those who could initiate and develop new services, those who could grow existing services and those who could find and develop new customer channels.

The source of IOP varies by person. It could be his expertise, knowledge, experience, achievements, attractiveness, personality, education, intelligence, relationships, character, talents, skills, abilities, credibility, reliability, judgment, wisdom, seniority plus many other things. I knew one machinist who was a leader because he could run more of the machines in the plant better than anyone could.

Figure 2: Informal Organizational Power

FOP gets people to do things because they must; it’s the rule. IOP encourages people to do things because they want to; they like those with IOP or do so out of respect. Using a body as an analogy, FOP represents the bones and IOP the muscles. The most powerful leaders have a lot of both; organizations give them a lot of authority and people within the organization have a strong desire to help them.

Thus, when we try to understand and appreciate how organizations work, looking at the organization chart shows formal organizational power. Overlaying this chart is the influence of a multitude of relationships that vary by situation and by moments in time. In effect, we don’t really know an organization unless we have a feel for how informal organizational power influences it.

Related Link:

• Leadership vs. Management: The Difference (Part II)