The author’s talk about organizations having two networks, a formal network based on the rules and regulations, and an informal network based on trusth that gets things done.\u00a0 The author’s argue both are necessary for a healthy organization.<\/p>\n
I couldn’t help thinking of the housing financial meltdown here in 2008.\u00a0 It seems that the informal networks ran over the formal networks, which destroyed checks and balances.\u00a0 When this caught up with the market, investors were stuck.\u00a0 They couldn’t trust anyone at the investment banks.\u00a0 Since the informal network is based on trust, they died, and the financial markets collapsed.\u00a0 The injection of money from TARP didn’t accomplish anything.\u00a0 The real problem was trust, which money doesn’t fix.\u00a0 Likewise, the money injection would be exactly what the formal organization would propose because that is what they control.\u00a0 Washington is still struggling to reestablish trust – the balance between reporting rules and restrictions on conflicts of interest (proprietary trading).\u00a0 If the rules are too restrictive, then everyone learns to work around them, and tries to capture their regulators. The author’s talk about organizations having two networks, a formal network based on the rules and regulations, and an informal network based on trusth that gets things done.\u00a0 The author’s argue both are necessary for a healthy organization. I couldn’t help thinking of the housing financial meltdown here in 2008.\u00a0 It seems that the informal … Continue reading The Agile Organization and 2008 Financial Meltdown<\/span>
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