The organisation that runs is not the one on the org chart

The org chart says who reports to whom. It rarely says who gets consulted before an important decision, who can stop a project without ever saying so, or who gets called when something goes wrong on a Friday afternoon.

That second structure, informal and unwritten, is the one that actually runs things. And it is almost always invisible to anyone arriving from outside with a transformation plan under their arm.

What is a company’s informal organisation?

It is the set of paths decisions actually travel, as opposed to the ones that were designed. It is not corridor politics or a lack of discipline: it is how an organisation resolves, in practice, what its design did not anticipate.

It usually has one of three origins. The company grew faster than its structure, and people carried on doing what worked. It inherited an exception created for one specific case that was never closed. Or it came to depend on someone who knows how to do something nobody else does, and around whom everything gradually organised itself without anyone deciding it.

In none of these cases is anyone to blame. There is an organisation working despite its own design, and often working well.

Why is the informal organisation usually more stable than the formal one?

Because its rules live in habits and in relationships between people, not in documents that change with every restructuring. A reorganisation changes the boxes on the chart; it rarely changes who trusts whom, or who gets asked first.

So after a restructuring the informal network tends to reappear almost intact underneath the new structure. People change managers but keep calling whoever has always solved the problem for them. Anyone who treats the reorganisation as the end of the work discovers, months later, that they changed the design and left the functioning exactly as it was.

Which signs show a company depends too much on its informal organisation?

The most common are new people taking far longer to settle in than expected, the same name appearing in copy on almost every relevant email, and documentation that exists but nobody consults. Any one of these signs says that the knowledge making the company work sits in the people, not in the structure.

There is a fourth sign, easier to measure: errors grow faster than activity. While the company is small, the informal paths carry the volume. As it grows, every new person has to learn what is not written down, and every gap in that learning shows up in the operation.

Why do changes fail when they ignore the informal organisation?

Because they are designed for the organisation on paper and executed inside the one that exists in practice. When the two do not coincide, the plan is not rejected, it is absorbed: formally approved and, in practice, without effect.

That absorption is silent, and that is what makes it dangerous. Nobody objects in the meeting. The new process gets adopted in the easy cases and worked around in the hard ones, which are precisely the ones it was created for. Six months later the indicators say the change was implemented and the operation says nothing changed. And both are true.

How do you identify a company’s informal organisation?

With questions that appear in no engagement survey, asked of the people who execute, not the people who approve. What a team describes in a meeting is what it can articulate; what it does at eleven on a Tuesday morning is what the organisation actually is.

• Where is there an informal step nobody documented but everyone respects?
• Which decisions always come back to the same person, whatever the org chart says?
• Which exception became a rule without anyone deciding it?
• What do teams do to work around the system they were given?
• If one particular person were away for two weeks, what would come to a stop?

How the questions are asked decides what you hear. They are asked with an explicit guarantee that the point is not to audit, and they are asked in conversation, not on a form, because what matters is almost always in the sentence that comes after the first answer.

What should be done with the informal processes you find?

Each informal path has three possible destinations: formalise it, replace it, or leave it alone. Choosing badly between the three is where most projects get lost.

• Formalise it, when the informal path is better than the designed one, which happens more often than anyone admits. The change consists of writing down what is already done and giving it the standing it lacked. It is usually the cheapest and best received intervention of the three.
• Replace it, when the informal path exists to compensate for a failure that can be fixed at source. Fix the failure first, and the workaround disappears on its own. Trying to remove the workaround without fixing the failure only produces a new one, this time hidden.
• Leave it alone, when it works, costs little and formalising it would only make it more rigid. Not everything informal needs resolving, and an organisation with no slack at all breaks at the first surprise.

What should be done when the informal organisation is a risk to the company?

Change it, but name it first. An informal path can concentrate power improperly, hide risk, or depend on a single person in a way the company cannot carry, and in those cases the change really is necessary. The difference is in the method.

A plan that ignores the informal path gets absorbed. A plan that names it, explains why it existed and says what replaces it has a chance. The people who created it rarely defend the path itself; they defend the problem it solved. If that problem gets solved another way, they have no reason left to defend it.

Designing change with the organisation that exists is not a concession. It is recognising that it is the only one that can carry the change out.