The Official and the “Unofficial” Organization Chart

Hidden Agenda at home and work!

Everyone knows about the existence of the official agenda and the “hidden agenda”.  The hidden agenda being those issues which everyone knows about but are not willing to open up for honest discussion.  Instead, most hidden agenda gets surfaced behind closed doors, around the water cooler, or at the bar.  Places where lots of heat is generated but little light!

The Hidden Organization:

What is not so well-known is the existence of two organization charts; the official printed chart and the informal, or “unofficial” organization.  And it is often the unofficial organization that determines how (and whether) things get done.

Here’s a classic example.  A munitions plant had recently been awarded a major contract that required them to increase production to 50 units per day.  Industrial engineers were sent in to expand and configure the production line.  Additional staff were hired and given extensive training, but no matter what improvements were made, the most they produced was around 35 per day.  This situation went on for several months.  Senior management even replaced the Plant Manager. No improvement.

Finally a young engineer was sent in to find out “what was going on!” Instead of measuring and gathering data, he just observed.  For three days he hung around watching people, when they arrived, how they worked, what happened during breaks.  He even went to the same bars as the employees. And it soon became obvious that there was an “unofficial” organization chart and it was there that the real power to get things done existed.

An extremely well-respected woman who had worked at the plant for the past 30 years was unofficially “calling the shots”.  All the workers not only respected her, but feared her power as well.  And it seems that somewhere in the past she believed she had been treated unfairly by management and it was her intention not to let “management” push around her fellow employees.  Ramping up production was just another example of getting more for less from the workers, so she controlled, from behind the scenes, the pace of work.

As soon as this was recognized, the young engineer made it his job to befriend this woman, listen to her grievances, help her to realize the benefit to all employees of performing on the newly won production contract.

The result?  Production consistently exceeded 50 and even reached 80 per day at times.

Nortel and the Unofficial Organization

Another great example is the rise and collapse into bankruptcy of the telecoms giant, Nortel.  One a high-flying stock in the emerging private telecoms network space, Nortel had a core of long-term employees and executives who know who to call to get things accomplished quickly.  And speed to market with new products and services was a significant competitive advantage. But with a desire to grow fast, the company hired hundreds and hundreds of new managers, executives and employees who knew the official organization chart, but not the “unofficial” organization. As a result, decision-making slowed down, getting something through the system became more and more difficult until they began losing ground to more agile companies.  Then a significant number of experienced senior executives cashed in their stock options and retired. Nortel filled for bankruptcy.

What’s really going on in your organization?  Find the “unofficial” organization and you will see how, and why, things really get done, or not done!  A hint:  the unofficial organisation is your real corporate culture!

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Twitter @bizjrchildress

Read John’s blog,  Business Books Website

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!


About johnrchildress

John Childress is a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at or
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4 Responses to The Official and the “Unofficial” Organization Chart

  1. Steve Borek says:

    Wow. Cool story of the munitions plant problem. Great example that shows human capital is your greatest asset.

    There are lots of folks our their like the disgruntled respected woman. They have a voice and want to be heard.

    It’s important for leaders to jump into the fox hole every now and then to see and hear for themselves what’s going on. Plus the fact your team will love and respect you for it. As in this case, productivity will rise.


  2. Dear John: This is profound insight. Thanks.


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