Not everything about how your business operates is written in your employee policy manual. Shadow systems fill the gaps between what is written and what is done. Sometimes, those systems are signs of growth and improvement – the spontaneous efforts of your employees to make work better. Other times, they represent barriers to getting work done efficiently. Here is how to identify whether your company has shadow systems, and what you can do as a business owner to address them.

Using Shadow Systems to Identify Areas of Disorganization

In the world of business, shadow systems are the gaps in the standard processes that get filled by how employees get things done. Different workplaces require different levels of formality and structure. You may run a factory that depends on by-the-second execution of tasks, or facilitate a team of creative thinkers who need flexibility to meet their clients’ needs. These different working environments require different levels of structure in their workplace policies and procedure. However, the looser your rules are, the more likely employees are to develop shadow systems to fill the gaps.


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As a business owner, you can use this to your advantage. By working with a facilitator to identify the shadow systems at work in your organization, you can identify areas in your business where more regulation may be needed. Consider interviewing your employees about their work processes, and keeping an eye out for terms like “we always…” or “I thought the rule was…” If your staff is operating as if there was a policy in place that does not actually exist, it is likely that someone has created a shadow system that has become the norm for your business.

When Shadow Systems are a Good Thing

It is important to remember that shadow systems can be a good thing. Often, they reflect effective problem-solving by team members who come to understand their jobs better than the policy makers who initially created the system in the abstract. Your employees may find ways to do things better, avoid certain procedural pitfalls, or account for challenges and variables no one saw coming ahead of time. Let’s call these “adaptive” shadow systems.

When you identify adaptive shadow systems in your business, there are some steps you can take to make the most of them:

  1. Give praise to the innovative team members who created the shadow system
  2. Inquire with other team members to see if they are using the same process
  3. Evaluate the strengths and weaknesses of the shadow system
  4. Determine whether a formal policy would better serve the company or client
  5. Invite collaboration to further refine the new process and account for divergent perspectives
  6. Bring formality to the shadow system by adopting it as a new procedure

Not every adaptive shadow system needs to become a formal business policy. Sometimes there is a lot to be gained from the flexibility that shadow systems allow. They can facilitate innovation and promote employee productivity and creativity. However, when a shadow system becomes an unwritten rule, it can be better to elevate it to a more formal position – if it is serving the company’s interests to do so.

Identifying and Resolving Maladaptive Shadow Systems

However, it is also important to remember that not all shadow systems will be beneficial for your company culture or productivity. These shadow systems may have developed for good reasons, but are no longer relevant to your work. For example, employees may have established a pattern of seeking approvals for intermediary steps from a supervisor or manager. They may have done so because in the past changes in the project’s goals had cause a lot of wasted effort. However, once the company’s goals have been brought into focus, those changes are less likely to occur. Now, the shadow system of intermediate approval is just slowing productivity down.

Maladaptive shadow systems may also develop to fill gaps left by poor leadership or management skills. For example, if the company’s conflict resolution policy is lacking or fails to effectively diffuse conflict, a shadow system of informal mediation by untrained coworkers could develop to fill the gap. Team members may go outside the organization’s written policies because those policies are lacking. However, unlike in adaptive shadow systems, the solutions they find may not facilitate collaboration, but instead may bury resentment and hostility until it becomes a problem for the company.

Identifying maladaptive shadow systems is best done by an outside consultant or facilitator who can speak with team members privately – even anonymously – to identify where the pain points are in the company’s formal policies, and what employees are doing to avoid them. The level of separation provided by a third party can encourage employees to be open about the problems they perceive with the organization’s formal policies, and can also identify the problems with the shadow systems that have developed to address those problems. Then, the facilitator can work with company decision makers to make strategic changes to the formal policies that will address employee concerns and make work easier for everyone.


David Stanislaw is an organizational development specialist with over 25 years’ experience helping teams resolve workplace conflict and develop efficient systems.  Contact us to meet with David and start your company’s strategic growth plan today.