Anyone who has worked in virtually any organization long enough has probably worked with a manager who is impotent when it comes to exerting influence. Even though managers have the authority to make decisions and ask others to take action, their requests may go unfulfilled, be delayed, or be completed sloppily or only partially.
On the other hand, you may also have worked with people who had no official authority but still were able to get others to do what they wanted, how they wanted it, and when they wanted it.
Formal vs. Informal Authority
The above is a description of the distinction between formal authority and informal power within an organization and are extreme examples meant to illustrate a point.
In general, people with formal authority, such as the manager in the first example, shouldn’t be so ineffective, given their official mandate of managerial authority, and it’s strange for someone without formal authority to wield so much influence. However, gradations of influence ascribed to both formal and informal authority can and do exist in the real world.
First, think about the difference between authority and power, which we could also call influence. As one expert says, “you’ll notice that a traditional definition of power is ‘the ability to influence somebody’ whereas a traditional definition of authority is ‘the justification and right to exercise that power.’”
ToughNickel contributor Kathryn Vercillo defines formal and informal leaders in an article as follows:
“Formal leaders are given leadership based on their position with a group,” says Vercillo. “They are actually assigned to be leaders as part of their role in the group. Examples of formal leaders would be the teacher in a classroom or the manager within a company.”
“In contrast to the formal leader, the informal leader is someone who does not have the official authority to direct the group. Despite this, the group chooses to follow the lead of this person,” says Vercillo. “For example, the class clown may be someone that the students in the class take cues from even though the teacher is the official leader of the classroom.”
Vercillo notes that an informal leader may arise because he or she is charismatic and outgoing or because he or she exhibits certain knowledge and ideas that seem useful to the group. In this way, the influence held by an informal leader is a bit more nuanced than that held by a formal leader.
To be truly effective, leaders need to rely on both formal authority and informal power. It’s important to know and appreciate the differences between the two so that managers can use the right tool in the right situation.