Formal v informal 1400There is a level of formality that exists in organizations.  The extent of the formality comes from the operational structure as well as the people involved at the institution.  As an example, you can have a highly formal organization that’s relatively small such as a elementary school.  You can also have a rather large organization such as a mid-sized company that has a very informal structure.  Valve, the operators of the Steam gaming service is a popular mid-sized organization that has a hugely informal structure.  Their literally is no management chain or directives given.  It’s not all black and white but there is definitely an organizational preference.. Most organizations either prioritize formal first and then have some informality or are informal and then have formality where needed.

These cultural foundations result in stark differences in how the organizations handle challenges.  For example, In an informal first  organization if there is a disagreement between two people, the boss pulls them into a room and tells them to work it out.  If there is a disagreement in a formal organization, HR gets involved, the organizational policy is consulted, a corrective action is taken with sign off by at least three stakeholders, and the employee handbook is expanded to address the scenario if it potentially can happen again.  

A mega-organization can be both formal first and informal first.   Why?  Well there is no such thing as a truly monolithic company.   Large companies like GM, Walt Disney, and many others with names that aren’t as recognizable aren’t really a single entity.  They are a collection of smaller companies.  This is because different business environments generally require different cultures.  HR policies may be the same for both divisions but I have a sneaking suspicion that Microsoft’s  1st party video game studios have a different culture of decision making and communications than the software giant’s government relations divisions.  Formality in the informal sub organizations doesn’t really take hold unless an issue has to go up the chain, then the more formal structure of the larger parent organization takes precedence.  

Formal Organizations

Where do you see more formal organizations?  Typically it can be in situations where you have a specific need for the benefits that formality brings.  The biggest and most obvious example is government, specifically government organizations where multiple agencies and money are intertwined.  Everything tends to be formal,  Communication lines, conversations etc.  For normal people, this can seem insane.  Someone who lives in the country and wants to put a fishing shed next to some water on their property will be disgusted when they find out they have to wait six months and get letters of approval from the Town, County, and EPA just to get sign off of the planned location.  The approvals could be because part of the property has a protected bug that lives on it or possibly because the area in question includes a bit of wetlands which legislatively require the formal organizations intervention.   For those who are involved with the system, the formality is ideal.  If you only operate according to rules, regs, and policies, and everyone is a stakeholder then no one can complain later after they are all officially notified.  In instances where there a thousand political minefields then their is a real benefit to moving slowly and formally.  In this world, nothing is ever really set until it happens. In many, if not most instances, the information on where in the process something is tends to be shrouded in mystery.  There is a process, there is a review, but until the policy is out, until the formal notification, getting information is like pulling teeth.

The Human Intersection

Formality can be a real pain not just when you interact with organization but when you interact with the people within the organization. The challenge, and one that I’m not 100% sure of the origin, is the fact that people within the organization subsume the organizational culture. It’s a chicken-and-egg question: Do people become closed off and formal because that’s who they are and they stick around where they feel most comfortable or because that’s what the organization made them?  As with most things in life it’s probably a little bit of both.  Humans can adapt from their core tendency but only so much.  

Ultimately there is a correlation between formality and communication.  Informal brainstorming or work planning doesn’t really happen in the formal organization, at least not in an actionable way. Idea generation that comes from idle conversation which grows into something that can be acted upon just isn’t acceptable.  In the formal organization, if it’s determined that a new initiative needs to be created,  the idea generation for that initiative has to come from a predefined, facilitated, and structured meeting.  Planners will be sure to make sure the agenda meets the stated goals for the meeting requirements.  Slow and steady may win the race but it’s not very responsive to quickly evolving needs or requirements.This type of workflow can be frustrating, but it’s not really challenging.

The most challenging part is when formality comes from movements that affect people.   If communication is limited as to how decision makers are thinking then there is no telegraphing.  Everyone is always wondering and worried, there is always too much sensemaking which devolves into rumor-mongering. People are shocked and worried when someone is walked out the door or when a department closes down.

The only way to comprehend the machinations of the formal first organization is if you are fortunate enough to survive for an extended tenure.  Roughly it takes 10-15 years at a larger or complex organization to really comprehend the culture.  To see the subtle signs and to get a feel of what to expect.  This is obviously a challenge in a world of just in time employees and where the average time on the job is 4 years.    

Informal First Organizations

Some organizations are informal by nature.  Small departments, small teams, and small business all generally fall into this category.   These are the types of organizations that make deals on a handshake. People may not like with the bosses are thinking but they’re not hiding it at all.

On the interpersonal level informality is great because it helps build strong relationships and cohesive teams. People feel empowered when they can reach out to anyone in the organization rather than have to go through two layers of approval to make a phone call. In the end people get what they need quicker and ideas are shared and vetted with greater frequency.  Informality first means that you simply can move quicker.

Informal first companies are not the panacea of working environments. The challenge with the informal is that whatever is discussed may never happen. By the very nature of the organization there’s no formal starts and stops to things.  A great example comes from  a pickup truck that I purchased two years ago and brought to a repair shop. I had an informal agreement with the shop owner about what was required to get the truck on the road. There wasn’t timelines or written quotes associated with dropping the truck off and getting it fixed.  The bottom line is that it’s been there two years and it’s still collecting dust.  

Formality correlates pretty well with size. Even if you try and make a large organization operate informally It generally doesn’t work.  A good example of this was the original Saturn plant. GM wanted a different kind of car company and one of the celebrated examples of how it was different was the unique union agreement the plant operated with.  The entire agreement was just a few pages long.  The theory was communication and trust negated the need for the traditional complex union contract.  Unfortunately it didn’t work.  As the years went by the union agreement became a big complicated novel just like every other UAW contact in the auto sector.  

Everything has formal and informal.

As I alluded to at the beginning of this narrative, every organization has both formal and informal elements. The question is really a matter of where the organization tends to lean and how much they are vested in their formality or informality.

The biggest example of a need for both formal and informal is the US presidential election.  There is a bunch of informality in every presidential election.  There is constituent jargon, mud throwing, brash statements, and all manner of informality by the candidates and their teams. Then after the election, almost like a switch is thrown, formality is seen in all communications.  This is due to the fact that the then candidate, now president, has to work within the structure of the government.  It’s not about connecting with individuals anymore, their focus is about being effective in the world’s largest formal organization.  Words are carefully chosen, process is followed, and information is only really shared in the right way and at the right time.  This remains the case until the next  election cycle starts again.  

What’s Best?  

Operationally and organizationally it has been my experience  that the best model is to increase informal interactions first.  The greater level of informality means that there will be more friendships, more communications, and more ideas created and vetted.  This can help set the tone and set the expectations in the group.  If someone is struggling with making a budget work, and they share that information, one of two things will happen. The first thing is that a cool idea on how to fix the budget shortfall may percolate up in the informal conversation. The second thing is that people will be forewarned if no solution is found and will know what to expect. Informality is simply more humane.  If there is general struggle with someone on the team. It’s always best to hear “They finally got around to it”  rather than “Nobody saw that coming”.

Even with all of these benefits formal first organizations will always be around because of the needs of formality in certain situations where a great many people or a large amount of resources can be affected by actions and decisions. When the need for formality is higher than the need for speed of action and communication, expect to have limited information shared unless it comes from an official channel.

Eventually, even in the informal organizations, you need the hard stops.  This is when formal elements of the organization need to exist and be placed at the forefront. In really sticky situations you need the hard line that says this person gets to make the decision or this is the priority of action.

Unlike the clear-cut options with organizations,there is no real best answer when it comes to individuals. Your personality probably will tend towards one or the other side of the amount of formality you need to feel comfortable.  The good news is that after just a few short years on the job you’ll know where you fall on that bell curve. The one tip I can give you is that if you find your personally at odds with the way your organization operates, then maybe you should exit before you are exited.


I started the outline to this article after a conversation I had where I became frustrated that everything was so damn formal with the organization I was dealing with. I couldn’t get any usable information and couldn’t make anything happen quickly enough.  It’s where the genesis of the idea that some organizations are formal first and some are informal first came together.  Now now that I have reflected on the subject through writing of this article I realize that this is not an area that really can be changed. The level of formality in an organization is based in the personality of the people and of the needs of the institution. Like most things in our life, the level of formality in an organization becomes more troublesome the closer you get to the extremes.   Hopefully this will give me some pause the next time my extremely informal first personality clashes with an extremely formal first organization. If not at least I can go vent to my informal first buddies at work, maybe they can come up with a helpful idea or two.

Posted by Mike Peluso

Mike Peluso writes about the collision between between the business / professional world and life. He also writes about the journey involved with the Peluso Presents efforts including the Blog, Books, and Podcast so that others may benefit from his efforts. From Mike: I spend hundreds of hours working on these articles every year with no compensation other than support I get through donations. You can support with a tip and by Subscribing to the Podcast (and writing a review on iTunes would be really appreciated as well!) One time tips:

One Comment

  1. I’ve worked as both a scientist and a software developer, and rarely interface with the public. I think better when I’m comfortable. The more comfortable I am the less distracted I am. I never understood businesses caring if workers wore shorts in those kinds of situations, where workers are out of view.



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