Peer into the hallways of any business unit, and you will likely ﬁnd “shadow staff,” people performing tasks that duplicate those performed elsewhere in the organization, typically by corporate functions (e.g., HR, ﬁnance, and IT). No matter what the industry, shadow staffs lurk in the corners of most large enterprises. Once brought to light, companies ﬁnd, these positions can add 30 to 80 percent to total support staff head counts. (See Exhibit 1.) In the case of one telecommunications carrier we worked with, the shadow IT staff was three-quarters as large as the entire ofﬁcial IT department. As one CIO client put it, “Even the shadow organizations cast shadows.”
The traditional solution for shadow staffs has been to identify and eliminate these redundant positions, but in our opinion this approach is ﬂawed. By weeding out shadow staffs in the business units, a company does not address the root cause of the problem, only its symptoms. As many companies have discovered, a shadow staff position is like the head of a hydra. You cut it off, and two more grow back in its place. To improve operational efﬁciency over the long run, an organization needs to understand the reason shadow staffs exist — and then remove the reason, not necessarily the position. That is the surest way to eliminate duplicative and wasted effort.