For many, ascending higher and higher in their job positions has been a mainstay of career growth in the worlds of both business and government. For the select few who have been able to secure a seat in the C-Suite they often feel a sense of security as they have finally reached the pinnacle of their careers. However, such security is increasingly being challenged in today’s hypercompetitive and ever-changing global business environment. New research has uncovered a variety of reports with one stating that as many as 60% of all incoming C-Suite executives to new companies (vs. being promoted within their current organizations) are booted out within their first 18 months on the job. The primary cause for these C-Suite casualties seems to be poor and inadequate integration of new executives into the organization.
Certainly a leader’s ability to understand the company’s strategy, its systems and processes, its culture, etc., is key to successful integration, but emerging research reveals that newly on-boarded executives – and, in fact, all executives – need to understand the shadow organization. Executives need to go beyond understanding the formal networks of people who exist within their organizations, vis a vis, organization charts replete with formal titles, responsibilities and authorities, and dive deeper into understanding the informal networks and those who make up these shadow organizations. By understanding their shadow organizations, executives can quickly tap into and harness their organizations’ collective intelligence and talent to drive both the organization’s success as well as their own personal success.
The rise of big data and predictive analytics are now providing executives the tools needed to reveal these shadow organizations that exists within every company. Such new tools afford executives the ability to “look under the hood” and tease out who are the true change agents and key influencers within their organizations, i.e., those people whom others in the organization trust and with whom they identify. Typically, a small single-digit percentage of the people in an organization have the ability to directly, but informally, connect to and greatly influence a significant percentage of people within that organization. This small percentage of people who make up the shadow organization are the ones who oftentimes have the real power to initiate and drive change faster and more effectively than people formally identified on an organization chart who are tasked to have such power. By identifying these small groups of change agents and key influencers residing in the shadow organizations, executives are able to more quickly build their organizations’ muscle, while alternatively identifying those low-value adding performers within their organizations who may need to be trimmed from the organization. Without such an analysis, companies working in this space report that when executives are asked who are the change agents and key influencers, or conversely the gatekeepers and roadblocks in their companies, they almost always get it wrong.
Knowing their shadow organizations enables new executives, as well as those executives whose careers are stalled and in need of rebooting in their current organizations, to quickly fast-track their ability to identify, consolidate and leverage their powerbases to more effectively communicate vision and execute strategy.
John A. Caslione is Adjunct Professor at Georgetown University’s McDonough School of Business where he lectures on business strategy and scenario planning. He has authored several books and articles addressing the global economy and global business strategy. He is President & CEO of GCS Business Capital, LLC, a boutique M&A and investment advisory firm.