Beware of the Shadow (Org)

As Punxsutawney Phil’s groundhog prognostication nears on February 2nd, I thought it fitting to focus on ‘the shadow’ (org) conundrum which for many re-occurs as its own vexing ‘groundhog day’.

Perhaps one of the sure-fire signs of looming gloom & doom (and potential failure), is the shadow organization.  This can take several forms from passive to aggressive, from good intentions to being a harbinger of ‘death’ for teams, tasks, and organizations. I’ve rarely seen a positive outcome from shadow orgs or efforts.

WHAT is a shadow org? A shadow organization is a hidden part of an organization that is not widely known / discussed or necessarily aligned to. It can be made up of informal relationships, unwritten rules, and hidden influencers. And/or, they can be large scale efforts that are embedded formally in ways of working or possibly in parallel to current (and likely duplicative) processes and operations. In all cases, they often include alternative systems, ways of working, and talent or solution providers.

WHY are they employed? Aside from confidence issues, generally shadow orgs exist because results, speed, or alignment are lacking (or all three) and are often spun-up with consultancies working ‘on’ and not ‘in’ the business, often for exorbitant costs and resources. On a smaller scale, specific people, teams or functions may use non-sanctioned partners or technologies to circumvent barriers to achieve goals. Again, this can be for good results/intent and not necessarily bad, such as standing up what ‘good looks like’ or achieving urgent go-to-market / launch needs. It is critical to make the distinction from pilots, which are vetted, aligned, and ideally embedded initiatives designed to prove out a use case and solidify KPIs, strategy, and operational imperatives for adoption and scale.

The WHO…is often the key problem. Unlike pilots or tests, shadow orgs can be fatally flawed for many reasons rooted in inadequate management and governance, which is a derivative of people:

• Insufficient (or non-existent) alignment, process / workflow design, or talent
• Not reporting to the appropriate functional lead/team
• Lack of vetting, inclusion, and traction with key stakeholders
• Being designed by consultants or groups lacking in org or capability expertise
• Murky commitment or understanding of what it takes to be successful, and how long that may take

HOW are shadow orgs disruptive? Without thoughtful design, governance, and proper management shadow organizations can be disruptive to company life, performance, and culture – not to mention impact. ‘Negative norms* can run rampant within companies as a result, often undermining company culture, performance, and potentially talent retention. As boundaries are crossed, and functional roles and systems are duplicated, a ‘downward spinning spiral‘ can emerge, mystify, and cause complexity. At a simplistic level, the existing or origin function or process can become obscured or lost – and ultimately may conflict with the shadow org intent.

WHEN to take action: The best ‘Rx’ is to contract within teams and leadership to avoid this pitfall and know when to spot shadow orgs or dynamics early and diffuse or contain them with systemic and sustainable solutions.  Urge leadership to have confidence in, and support, the longer-term picture with an ‘above the line’ path to get there with proper resources. This may indeed require outside support (not substitution) and change which is by far less scary and likely more effective in having a desired impact ‘stick’ and scale.

Transformation and ‘change resilience’ requires people working openly with a collective success, grounded in data-driven performance. This includes identifying and upskilling the talent that will operationalize and scale the capability or function. Not doing so may bring, in groundhog-day terms, may bring more long winters than early springs, as well as that ‘groundhog day’ deja vu!