🧭 Dojo Compass
Module: Leadership, People and Organizational Excellence
Focus Area: Organizational Design and Governance
Key Article Point
Most companies have an organizational chart.
It shows departments, reporting lines, titles and formal responsibilities. It tells employees who reports to whom and, at least in theory, how authority flows through the organization.
But anyone who has worked inside a company for a reasonable period of time understands that the organizational chart tells only part of the story.
Suppose a product manager needs an engineering team to prioritize an urgent problem. Formally, there may be a clear reporting structure. In practice, however, progress may depend on knowing:
- who actually understands the problem;
- who has the authority to allocate resources;
- who can explain the commercial importance of the issue;
- who needs to be consulted;
- how the request should be framed;
- when the request should be made; and
- who will follow up until action actually occurs.
The action may cross several departments and involve people who have no direct reporting relationship with one another.
This is the world of in-firm networks.
Every organization has one.
Employees create connections across departments. They develop trusted relationships with colleagues. They learn who possesses particular knowledge. They discover who can solve problems, who needs to be consulted and how different parts of the organization actually operate.
Over time, these relationships create an informal network that exists alongside the formal organizational structure.
The organizational chart may describe the company’s structure.
The network often determines its practical ability to coordinate, decide and execute.
Understanding this distinction can be valuable for both organizations and employees. A well-functioning network can accelerate information flow, improve cooperation and help ideas become action. A poorly functioning network can create bottlenecks, silos, political gatekeeping and excessive dependence on a small number of individuals.
The objective is therefore not simply to encourage more networking.
It is to understand:
How does work actually move through our organization—and how can we improve the network through which value is created?
🎯 Key Challenge
At a simplified level, much of organizational life involves two activities.
First, someone identifies, proposes or requests an action.
Second, the organization mobilizes the people and resources necessary to execute it.
In theory, the organizational chart should help make this process straightforward.
In practice, both stages can be surprisingly complex.
A proposed action may require:
- technical input;
- management approval;
- financial resources;
- legal review;
- operational support;
- customer input; and
- cooperation from several departments.
The same is true of execution.
A customer request may begin with sales, move through engineering, involve legal, require finance approval and ultimately depend on operations.
The organizational chart may define where each function sits.
It does not necessarily explain how the different functions will successfully work together.
This is where informal organizational networks become critical.
An employee who understands the network may know that the fastest way to solve a problem is not necessarily to send an email through the formal chain of command. They may know who has the relevant expertise, who is likely to support the initiative and who needs to be involved before the issue becomes a problem.
Conversely, an organization may have a perfectly logical organizational structure while suffering from weak internal networks.
Departments may communicate only through formal channels.
Information may become trapped.
Employees may not know whom to approach.
Problems may move slowly from one organizational box to another.
The result is a hidden form of organizational friction.
The key challenge is therefore this:
How can an organization make its informal networks more effective without allowing informal relationships to become a substitute for appropriate authority, transparency or accountability?
The answer is not to eliminate informal networks.
That would be impossible and undesirable.
The answer is to understand how they create—or destroy—value.
🥋 Dojo Solution
Treat the organization as operating through two interconnected systems.
The Formal System
The formal system includes:
- organizational charts;
- reporting relationships;
- titles;
- authority;
- job descriptions;
- policies; and
- formal decision-making processes.
Its primary purpose is to create clarity, accountability and appropriate allocation of authority.
The Network System
The network system includes the actual relationships through which:
- information flows;
- advice is sought;
- problems are solved;
- resources are mobilized;
- cooperation is negotiated; and
- actions are coordinated.
Its primary purpose is practical organizational movement.
Neither system is sufficient on its own.
A company with only formal structures may become slow and bureaucratic.
A company that relies entirely on informal networks may become opaque, political and dependent on personal relationships.
The objective is to create alignment between the formal structure and the practical networks required to make the organization work.
A useful principle is:
Use formal structures to establish accountability. Use networks to accelerate understanding, coordination and execution.
The strongest organizational networks are not simply large collections of relationships.
They are networks that help the right information, requests and resources reach the right people with minimal unnecessary friction.
🏗️ Putting It into Practice
Step 1. Identify how important work actually moves
Choose several recurring activities within the organization.
For example:
- approving a new client contract;
- launching a product;
- responding to a major customer problem;
- hiring a new employee;
- entering a new market; or
- resolving an operational failure.
Then ask:
How does this actually happen?
Do not begin with the written procedure.
Ask the people involved to describe what they really do.
You may discover that a process formally involving four departments actually depends on two or three key individuals who coordinate everything informally.
This is not necessarily a problem.
But it is important organizational intelligence.
Map:
- who initiates the action;
- who provides information;
- who influences the decision;
- who has formal approval authority;
- who performs the work;
- where delays occur; and
- which relationships help the process move forward.
This creates an initial picture of the organization’s operational network.
Step 2. Identify value-creating network dynamics
Some network characteristics can significantly improve organizational performance.
Fast access to knowledge
Employees know whom to contact when they encounter a problem.
The organization does not waste time searching for expertise.
Cross-functional bridges
Certain relationships connect departments that would otherwise operate in isolation.
For example, strong connections between sales and product development may allow customer insights to influence product design more quickly.
Trust
People are more willing to share incomplete ideas, raise problems and ask for assistance when relationships are characterized by trust.
This can reduce the cost of communication.
Employees do not need to repeatedly establish credibility before every interaction.
Distributed connections
Knowledge and relationships are spread across the organization rather than concentrated in a small number of individuals.
This increases organizational resilience.
Constructive challenge
Strong networks should not merely create agreement.
They should allow people to challenge assumptions, provide alternative perspectives and identify problems before they become serious.
The goal is not simply a friendly network.
It is a network capable of helping the organization think and act better.
Step 3. Look for value-destroying network patterns
Informal networks can also create significant organizational problems.
One common problem is the bottleneck individual.
Suppose every important cross-functional initiative requires the same person to make introductions, obtain cooperation or explain how things work.
Initially, that individual may appear extremely valuable.
But the organization has developed a structural weakness.
If that person becomes overloaded or leaves, the network may stop functioning effectively.
Another problem is the gatekeeper network.
Information or opportunities may become concentrated among a small group of people who control access to decision-makers.
This can create:
- internal politics;
- information asymmetry;
- frustration;
- unnecessary delays; and
- dependence on personal relationships rather than transparent processes.
A third problem is network exclusion.
New employees, remote employees or people outside the organization’s traditional centers of influence may lack access to important informal networks.
They may formally have the same authority as others but significantly less practical ability to accomplish their work.
Finally, networks can create informal silos.
People may develop strong relationships within their own groups while having very limited connections elsewhere.
The organization then becomes a collection of highly connected islands.
The problem is not a lack of networking.
It is a lack of bridges between networks.
Step 4. Make requests easier to move through the network
One of the most practical elements of in-firm networking is understanding how to make an effective request.
A poorly framed request creates friction.
For example:
“Should we expand into France?”
This may generate discussion but makes it difficult for anyone to know what action is required.
A more useful request might be:
“We have identified preliminary interest in the French market. I propose that we spend two weeks preparing a short analysis of market size, entry costs, regulatory requirements and potential partners. The estimated cost is limited to existing employee time. Do we agree to proceed with this first step?”
The second request is easier to evaluate and support.
Effective organizational networking therefore involves:
- identifying the relevant people;
- understanding what information they need;
- framing the request clearly;
- defining the proposed action;
- making the required commitment visible; and
- following up appropriately.
Networking is not simply knowing people.
It is reducing the friction required to move useful work through an organization.
Step 5. Build bridges deliberately
Organizations should not leave all useful relationships to chance.
Management can deliberately create cross-functional connections through:
- temporary project teams;
- cross-departmental meetings;
- shared problem-solving sessions;
- employee rotations;
- internal communities of practice;
- mentoring relationships; and
- collaborative strategic initiatives.
The purpose is not to create more meetings.
It is to increase the organization’s ability to access knowledge and coordinate action.
A useful question for managers is:
Which parts of the organization need to understand each other better but rarely interact?
Those areas may benefit from a deliberate bridge.
For example, connecting engineers more directly with customers may improve product development.
Connecting legal earlier with commercial teams may reduce transaction delays.
Connecting finance with operational teams may improve resource allocation.
The value often lies not within either department alone.
It emerges from the connection between them.
Step 6. Reduce dependency on individual network hubs
Highly connected employees can be extremely valuable.
But organizations should be careful about excessive dependence.
Ask:
- What relationships would be lost if this employee left?
- What knowledge exists primarily inside personal relationships?
- Which important processes depend on one individual making things happen?
- Can these relationships be broadened?
The objective is not to reduce the importance of strong networkers.
It is to convert some of their relationship capital into organizational capability.
For example, instead of having one person maintain the entire relationship with a strategic customer, create connections between several relevant employees and their counterparts.
Instead of allowing one individual to remain the only person who understands how two departments coordinate, document the process and build additional relationships.
A strong individual network can then become a stronger organizational network.
Step 7. Preserve appropriate formal accountability
There is an important boundary.
Effective networking should not mean bypassing authority or ignoring governance.
An employee may have an excellent relationship with a senior executive, but that does not necessarily mean the employee should circumvent their manager.
A strong network should accelerate:
- information;
- understanding;
- problem-solving; and
- cooperation.
It should not create hidden decision-making structures that undermine accountability.
This distinction is important.
The ideal organization is not one where everyone can influence everything through personal relationships.
It is one where people can efficiently connect and collaborate while authority and responsibility remain sufficiently clear.
Step 8. Help employees become better organizational networkers
Employees can also improve their ability to operate within the network.
A useful starting point is to build relationships before they are urgently needed.
Do not wait until you have a crisis before introducing yourself to the person whose cooperation you require.
Employees should also try to understand:
- what other people are responsible for;
- what pressures they face;
- what information they need;
- how their work affects other departments; and
- how they prefer to communicate.
This makes cooperation easier.
Good organizational networking also involves reciprocity.
If networking is simply:
“Who can help me get what I need?”
the network will eventually weaken.
A stronger approach is:
“How can I understand what others are trying to accomplish, and where can our objectives help each other?”
The most valuable networks are usually built through repeated exchanges of useful information, assistance and trust.
📌 Key Takeaways
- The organizational chart shows formal relationships. The organizational network shows how work often actually gets done.
- Organizations operate through both formal structures and informal networks.
- Strong networks can accelerate information flow, problem-solving and cross-functional execution.
- Informal networks can also destroy value when they create bottlenecks, gatekeepers, exclusion or political silos.
- Mapping how important work actually moves can reveal hidden organizational strengths and weaknesses.
- Effective networking is not simply knowing many people. It is reducing the friction required to move useful ideas and actions through the organization.
- Cross-functional bridges can create significant value by connecting knowledge and capabilities that would otherwise remain isolated.
- Organizations should avoid excessive dependence on individual network hubs.
- Individual relationship capital should, where possible, be converted into broader organizational capability.
- Formal authority and informal networks should complement one another rather than compete.
- The quality of an organization’s network may be one of its most important—and least visible—sources of execution capability.
🌿 Reflection
Organizations are often designed as if work flows vertically.
A manager gives direction.
An employee performs a task.
The result moves upward.
But much of the real work of an organization moves sideways.
A salesperson needs engineering.
Engineering needs customer information.
Finance needs operational data.
Legal needs commercial context.
A manager needs cooperation from people outside their reporting line.
The organization becomes a living network of requests, information, expertise, trust and coordinated action.
This suggests an important possibility.
An organizational chart may remain unchanged while the company’s actual ability to perform changes significantly.
Two companies can have the same structure, the same number of employees and similar resources.
One may move quickly because its people know how to find expertise, cooperate across boundaries and convert ideas into action.
The other may move slowly because information becomes trapped, departments remain isolated and every initiative encounters unnecessary friction.
The difference may not be visible on the organizational chart.
It may exist in the quality of the connections between the boxes.
That is why in-firm networking should not be viewed as merely an individual career skill.
It is an organizational capability.
The question is not simply:
“Who knows whom?”
A more useful question is:
“Can the right people, information and resources find each other when the organization needs to act?”
The answer may tell you a great deal about the organization’s capacity to create value.
⚔️ Dojo Mission
Map one important organizational action from proposal to execution.
Choose an activity that regularly crosses departmental boundaries.
For example:
- solving a major customer problem;
- approving a new initiative;
- launching a product; or
- entering a new market.
Then identify:
- Who formally owns each stage?
- Who actually influences progress?
- Where does information become delayed?
- Which relationships help the process move forward?
- Is the process dependent on one or two key individuals?
- Which departments need stronger connections?
- What is one source of unnecessary friction that could be removed?
Finally, make one practical improvement.
Create one new bridge.
Clarify one recurring request.
Connect two people who should know each other.
Reduce one unnecessary handoff.
The organizational chart may tell you where people are placed in the organization’s formal structure. The network reveals how far—and how quickly—the organization can actually move.
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