Informal Leadership Structure
Like I've stated before, Harley-Davidson uses an informal leadership structure. An informal leader is someone within an organization or work unit who, by virtue of how he or she is perceived by his peers (or others in the organization) is seen as worthy of paying attention to, or following. An informal leader possesses special skills and talent to influence and lead other members of an organization. The major thing that distinguishes an informal leader from a formal leader is that the informal leader does NOT hold a positon of power or formal authority over those that choose to follow him or her. A formal leadership structure is one that Student Safety Programs uses. A formal leader is a member of an organization who has been given authority by virtue of his position to influence other members of the organization to achieve organizational goals.
In the 1980s, Harley-Davidson had tough competition with other motorcycle companies like Honda, Suzuki and Yamaha going international. Harley-Davidson made changes to their manufacturing capability and became must more customer –focused. They also developed lines of private-brand riding and fashion apparel for the entire family and they designed a new retail look for the Harley-Davidson dealer network to market these products. All of these changes were successful because of the very strong, centralized, formal leadership structure. Under the direction of president and CEO Richard F. Teerlink, Harley-Davidson has moved to the informal leadership structure with the hopes of becoming a more empowered organization which incorporates decentralized decision making. Harley-Davidson believes that with an informal leadership structure, they will be able to better support individual growth and excellence, develop interdependence and cross-functional collaboration as a norm and position Harley-Davdison to continue to meet head-on whatever is before them in these challenging times.
Harley-Davidson is now divided into three broad functional areas called circles. There is the Create Demand Circle (CDC), the Produce Product Circle (PPC) and the Provide Support Circle (PSC). Each circle has leaders representing functions within it. With the circles, it is possible that over time, the functional areas within a certain circle could change depending on the demand of business.
Each circle operates as an empowered work team. Within each team, a single individual is not expected to emerge as the Circle leader. Leadership roles move from person to person, depending upon the issue being addressed. In addition, each circle nominates individuals to represent it on the Strategic Leadership Council (the area where all 3 circles overlap). The Strategic Leadership Council is responsible to resolve issues that have not been settled previously by consensus in circle meetings. The leadership of the council also rotates, shifting to the Circle representative who“owns”the topic being discussed. Each circle meets monthly and all of the circles meet together quarterly.
There are some advantages of Harley-Davidson’s circle format and the overall informal leadership structure. This format is very useful because it facilitates systems thinking in their strategy implementation. For example, if the marketing function plans to focus on a specific product, the circles provide an opportunity to get feedback from manufacturing about timing and availability. Similarly, if the manufacturing function needs to shut down its operations due to equipment upgrades, the circle structure allows for all affected functions to be involved in the decision. In addition, with creating the circle format, Harley-Davidson had to clearly define the roles and responsibilities of each functional circle and each circle member has brought clarity, which in turn stimulated dialogue, trust and non-threatening confrontation. These circles are more innovative, resourceful and more effectively in the business climate.
Of course, there are also disadvantages to the informal leadership and circles structure at Harley. It has not been easy to transition from a formal leadership structure to an informal structure. In addition, with an informal leader, there can be fear of the use of coercive power. With the informal/circles leadership structure, there is limited span of control and so the sphere of influence becomes the focal point. If someone is using coercive power to try to bring down a work circle, everyone at Harley-Davidson is watching them and some may begin to follow that employee. Finally, collaborative, interdependent teams may not be able to move as quickly as the single, decisive leader in a hierarchical structure because everyone is involved in the decision making compared to one person making decisions that everyone else must follow.
In order for informal leadership to work, there has to be influential power which is built on skills, communication, values, honor and integrity, which will shape the leaders of tomorrow.
In the 1980s, Harley-Davidson had tough competition with other motorcycle companies like Honda, Suzuki and Yamaha going international. Harley-Davidson made changes to their manufacturing capability and became must more customer –focused. They also developed lines of private-brand riding and fashion apparel for the entire family and they designed a new retail look for the Harley-Davidson dealer network to market these products. All of these changes were successful because of the very strong, centralized, formal leadership structure. Under the direction of president and CEO Richard F. Teerlink, Harley-Davidson has moved to the informal leadership structure with the hopes of becoming a more empowered organization which incorporates decentralized decision making. Harley-Davidson believes that with an informal leadership structure, they will be able to better support individual growth and excellence, develop interdependence and cross-functional collaboration as a norm and position Harley-Davdison to continue to meet head-on whatever is before them in these challenging times.
Harley-Davidson is now divided into three broad functional areas called circles. There is the Create Demand Circle (CDC), the Produce Product Circle (PPC) and the Provide Support Circle (PSC). Each circle has leaders representing functions within it. With the circles, it is possible that over time, the functional areas within a certain circle could change depending on the demand of business.
Each circle operates as an empowered work team. Within each team, a single individual is not expected to emerge as the Circle leader. Leadership roles move from person to person, depending upon the issue being addressed. In addition, each circle nominates individuals to represent it on the Strategic Leadership Council (the area where all 3 circles overlap). The Strategic Leadership Council is responsible to resolve issues that have not been settled previously by consensus in circle meetings. The leadership of the council also rotates, shifting to the Circle representative who“owns”the topic being discussed. Each circle meets monthly and all of the circles meet together quarterly.
There are some advantages of Harley-Davidson’s circle format and the overall informal leadership structure. This format is very useful because it facilitates systems thinking in their strategy implementation. For example, if the marketing function plans to focus on a specific product, the circles provide an opportunity to get feedback from manufacturing about timing and availability. Similarly, if the manufacturing function needs to shut down its operations due to equipment upgrades, the circle structure allows for all affected functions to be involved in the decision. In addition, with creating the circle format, Harley-Davidson had to clearly define the roles and responsibilities of each functional circle and each circle member has brought clarity, which in turn stimulated dialogue, trust and non-threatening confrontation. These circles are more innovative, resourceful and more effectively in the business climate.
Of course, there are also disadvantages to the informal leadership and circles structure at Harley. It has not been easy to transition from a formal leadership structure to an informal structure. In addition, with an informal leader, there can be fear of the use of coercive power. With the informal/circles leadership structure, there is limited span of control and so the sphere of influence becomes the focal point. If someone is using coercive power to try to bring down a work circle, everyone at Harley-Davidson is watching them and some may begin to follow that employee. Finally, collaborative, interdependent teams may not be able to move as quickly as the single, decisive leader in a hierarchical structure because everyone is involved in the decision making compared to one person making decisions that everyone else must follow.
In order for informal leadership to work, there has to be influential power which is built on skills, communication, values, honor and integrity, which will shape the leaders of tomorrow.
Formal Leadership Structure
Like I’ve stated before, Student Safety Programs uses a formal leadership structure. All of the employees at Student Safety Programs start at level I Safety Patrol. After they have trained safety patrol, they can then move up to other positions. After Safety Patrol I, an employee can move to either Support Services I or LIMO I. After gaining experience with the program, a student may apply to become a level II in their respective position or they can chose to train a different area of the program. Before becoming a level I Dispatcher, an employee must be at least a level I LIMO driver.
A level II is a role model employee who is able to train new employees. To apply, an employee needs to fill out an application, write a letter of intent and be interviewed to apply for the position. The student employment coordinators along with the manager of SSP decide who should be promoted to
Finally, after an employee has been a level II, they can apply to become an Assistant Field Supervisor (AFS). To apply to become an assistant field supervisor, an employee has to be a level II. In addition, they also have to get letters of recommendation, apply, fill out an application and be interviewed by the supervisory team and the manager of SSP. An AFS can then be promoted to a Field Supervisor (FS) by the manager of SSP.
“The formal system is the planner pattern of formal relationships and duties, formal rules, operating policies, work and control procedures, compensation arrangements adopted by management to guide employee behavior in certain ways, etc.” (McKenna). With formal leadership, everything is set up. There are certain procedures that need to be followed in order for something to happen. For example, in order for a level I employee to be promoted to a level II employee, they need to fill out the necessary paper, write a letter of intent and go to an interview. Unless these steps are taken, an employee will not be promoted to level II.
“The formal system of leadership is based upon organization specialization and the division of labor, the scaler principle, concepts of authority, responsibility and accountability, span of control and line and staff relationships” (McKenna). This statement relates to SSP because some employees who are safety patrollers cannot become LIMO drivers or Support Services employees because they do not have their license. Safety patrollers have a different specialization than support services who have a different skills from LIMO drivers who have different skills from supervisors. For more information on the different positions, please look at the attached documents.
A level II is a role model employee who is able to train new employees. To apply, an employee needs to fill out an application, write a letter of intent and be interviewed to apply for the position. The student employment coordinators along with the manager of SSP decide who should be promoted to
Finally, after an employee has been a level II, they can apply to become an Assistant Field Supervisor (AFS). To apply to become an assistant field supervisor, an employee has to be a level II. In addition, they also have to get letters of recommendation, apply, fill out an application and be interviewed by the supervisory team and the manager of SSP. An AFS can then be promoted to a Field Supervisor (FS) by the manager of SSP.
“The formal system is the planner pattern of formal relationships and duties, formal rules, operating policies, work and control procedures, compensation arrangements adopted by management to guide employee behavior in certain ways, etc.” (McKenna). With formal leadership, everything is set up. There are certain procedures that need to be followed in order for something to happen. For example, in order for a level I employee to be promoted to a level II employee, they need to fill out the necessary paper, write a letter of intent and go to an interview. Unless these steps are taken, an employee will not be promoted to level II.
“The formal system of leadership is based upon organization specialization and the division of labor, the scaler principle, concepts of authority, responsibility and accountability, span of control and line and staff relationships” (McKenna). This statement relates to SSP because some employees who are safety patrollers cannot become LIMO drivers or Support Services employees because they do not have their license. Safety patrollers have a different specialization than support services who have a different skills from LIMO drivers who have different skills from supervisors. For more information on the different positions, please look at the attached documents.
safety_patrol.docx | |
File Size: | 96 kb |
File Type: | docx |
support_services.docx | |
File Size: | 96 kb |
File Type: | docx |
limo.docx | |
File Size: | 96 kb |
File Type: | docx |
The first advantage of formal leadership structures are that they are used in most organizations. Employees do not have to adapt to anything because they already know how the structure works. In addition, the roles are all defined. An employee knows the route they have to take in order to get promoted. For example, if an employee knew they wanted to apply to be a supervisor, they would first have to apply to be a level II employee and get some experience being a level II. In addition, decisions are made way faster than they are in an informal structure.
Although there are some advantages to the formal leadership structure, there are also disadvantages. The first disadvantage is that employees may not feel engaged in an organization. They may feel that they are not appreciated in the organization and their needs are not considered. With a formal leadership structure, decisions are made from one person and generally that person does not always listen to the needs or wants of his employees.
Usually, for a formal leader to be successful, there have to be informal leaders under the formal leader that help the formal leader be successful in their endeavors.
Still interested in ways to change your organization? Check out my blogs for other information!
References
Bacal, Robert. "What Is an Informal Leader?" What Is An Informal Leader? Bacal & Associates, 2012. Web. 08 May 2012. <http://leadertoday.org/faq/informalleader.htm>.
Fessler, Clyde. "Rotating Leadership at Harley-Davidson: From Hierarchy to Interdependence." Strategy & Leadership (1992): 42-43. Web. 16 Apr. 2012.
Hiray, Jagdish. "Formal and Informal Leader." Web log post. All About Business and Management. WordPress.com, 06 June 2007. Web. 06 May 2012. <http://businessmanagement.wordpress.com/2007/06/06/formal-and-informal-leader/>.
McKenna, R. F. "A Description of the Organizational Interfaces of the Formal and Informal Systems." Industrial Management Nov. 1975: 1-7. Academic Search Premier. Web. 16 Apr. 2012.
Although there are some advantages to the formal leadership structure, there are also disadvantages. The first disadvantage is that employees may not feel engaged in an organization. They may feel that they are not appreciated in the organization and their needs are not considered. With a formal leadership structure, decisions are made from one person and generally that person does not always listen to the needs or wants of his employees.
Usually, for a formal leader to be successful, there have to be informal leaders under the formal leader that help the formal leader be successful in their endeavors.
Still interested in ways to change your organization? Check out my blogs for other information!
References
Bacal, Robert. "What Is an Informal Leader?" What Is An Informal Leader? Bacal & Associates, 2012. Web. 08 May 2012. <http://leadertoday.org/faq/informalleader.htm>.
Fessler, Clyde. "Rotating Leadership at Harley-Davidson: From Hierarchy to Interdependence." Strategy & Leadership (1992): 42-43. Web. 16 Apr. 2012.
Hiray, Jagdish. "Formal and Informal Leader." Web log post. All About Business and Management. WordPress.com, 06 June 2007. Web. 06 May 2012. <http://businessmanagement.wordpress.com/2007/06/06/formal-and-informal-leader/>.
McKenna, R. F. "A Description of the Organizational Interfaces of the Formal and Informal Systems." Industrial Management Nov. 1975: 1-7. Academic Search Premier. Web. 16 Apr. 2012.