FROM OUR CEO

Shadow Organization Is 4 Times Bigger Than Formal Organization

January 18th, 2023 | From our CEO

The work done in shadow organizations has increased during the pandemic.

Why? – Because some companies have streamlined and optimized internal support organizations to an extent where it did not make sense to their employees. Where even the smallest administrative task like buying headphones for use at the home office or the mandate to reward a hard-working team with a token of appreciation has become so cumbersome that short cuts suddenly become very attractive.

Case in Point – Like in the Procurement organization, where the Global Head happily could report that they were receiving less and less request for help from employees, and that he as a consequence could cut his staff count by 50%. He was sure that their new formal guidelines, principles and their nothing-but-user friendly procurement system was so bright and intelligent that nobody needed the help of his organization.

Mission accomplished? – Was he ready to move on to his next career job?

Not, entirely… because if you listened to the grapevine, you would know that the Procurement work had not disappeared due to the bureaucracy.

It had just found other ways to get done. Shadow organizations had been established. Suddenly each and every business unit had established their own small procurement units, which had found creative ways to solve the daily challenges. Many times, by helping each other. Just asking a friend for help. Who can help me?  With no intervention from the Procurement organization, please!

The Reality – The new shadow organization was 4 times bigger in headcount than the Global Procurement Organization. Much more resources were now spent on procurement.

In the network illustration you see how different business units collaborate on procurement. None of them collaborate with the Procurement Organization. The Procurement Organization was the very last go-to-option. Only if nothing else worked. They were simply to bureaucratic.

Mission accomplished? – Not at all!