Many leaders work hard to improve their results. Fewer work on understanding how power really works in their organisation. The one keeps you busy. The other makes you effective. Markus Krahnke, OFFICEPOLITICS®
Organisations are rarely purely rational systems. They are also political systems.
And in political systems power works on three layers at once. Many leaders see only one of them.
That is often why substantively superior proposals fail, while politically skilled colleagues with weaker ideas get through.
If you want to understand how power really works in your organisation, you should see through all three layers.
Power is not one-dimensional
When you think of “power”, you probably think of:
- titles
- hierarchy
- decision-making authority
- budget
That is formal power, what is written in the org chart and job descriptions. But that is only the surface.
Beneath it lie two further layers that are documented nowhere. They help decide whether your strategy holds or fails.
Layer 1: Formal power, the official game
This is the layer everyone sees and analyses:
- Who has which title?
- Who reports to whom?
- Who has budget and staff responsibility?
- Who formally has the last word?
This is the world of org charts, job descriptions and signing rules.
A typical case: the CFO must approve. Management decides. The supervisory board signs off. All clear, all documented.
The problem with this layer: it describes who has power in theory. It says nothing about who actually exercises it.
Why it can be deceptive: a CEO formally has great power. But:
- If the chair of the supervisory board does not support him, he is vulnerable.
- If his board works against him as one, he is isolated.
- If shareholders become suspicious, he is replaceable.
Formal power can be fragile. It often only holds as long as the informal structures support it.
Layer 2: Informal power, the invisible game
This is the layer that works beneath the surface:
- Whose opinion really counts, regardless of title?
- Who has direct, privileged access to the decision-makers?
- Who controls which information reaches the top?
- Who can delay projects without saying no?
- Who has to be consulted before anything happens?
This is the layer of networks, relationships and information flows. These are the centres of power that are not in the org chart.
Typical sources of informal power:
1. Privileged access. The CEO's long-standing assistant. The old school friend on the board. The former boss who now sits on the supervisory board. They have no formal title, but they have the ear of power.
2. Control over information. The controller who prepares the figures. The staff unit that writes all the proposals. The IT head who assesses “technical feasibility”. They do not decide formally, but they control what decision-makers see.
3. Institutional memory. “We tried that before. It did not work.” “I was here when the old CEO introduced that.” “I know the history of this topic.” They have no formal authority, but they define what counts as “realistic”.
4. Network position. The division head who is friends with all the other division heads. The VP who sits on every important committee. The director who knows everyone on the board personally. They can forge coalitions, spread information and organise or dissolve resistance.
What happens on this layer:
A typical case: a new leader takes over. Formally she has full decision-making power. In reality, a long-standing employee controls all information, knows all relevant players personally and sits on every important committee.
The leader wants to push through changes. The long-standing employee does not say no. But:
- The figures going up show “unexpected risks”.
- Important stakeholders are fed “concerns”.
- Meetings are postponed “for scheduling reasons”.
Formal power meets informal power. Then informal power often wins.
Layer 3: Agenda power, the hidden game
This is the deepest layer:
- What does each stakeholder really want?
- Which personal goals are they pursuing?
- Which fears drive their behaviour?
- Who benefits from which outcome?
- Which loyalties and obligations exist?
This is the layer of hidden agendas. It is what nobody says out loud and what appears in no meeting minutes.
Typical hidden agendas:
1. Career fears. “If this project fails, I will be blamed.” The consequence: minimising risk becomes more important than success. The symptom: endless “safeguarding loops” and delays.
2. Territorial interests. “If this new department succeeds, I lose importance.” The consequence: silent blockade. The symptom: “We fully support it, but unfortunately we have no resources right now.”
3. Personal loyalties. “My mentor built this system. I cannot vote against it.” The consequence: emotional ties outweigh rational arguments. The symptom: resistance that cannot be explained on the merits.
4. Financial self-interest. “If this budget model comes, I lose control of my budget.” The consequence: zero-sum thinking blocks cooperation. The symptom: “A good idea in principle, but the details are not right yet.”
5. Fear of change. “I do not understand the new technology. If it comes, I will be redundant.” The consequence: the status quo is defended by all means. The symptom: “This is all too complex. Let us do a study first.”
The problem with this layer: people rarely state their hidden agenda openly. Instead, substantive arguments are put forward:
- “Costs too high”
- “Technical risks”
- “Wrong timing”
- “Strategic concerns”
The real reasons often lie elsewhere: fear of losing power, territorial defence, personal loyalties, career risks.
Those who only respond to the substantive arguments do not solve the problem. Those who address the hidden agenda can often dissolve resistance.
Why many fail: they only see the surface
The typical approach:
- Identify the problem
- Develop a solution
- Check the org chart: who has to approve?
- Prepare the presentation
- Obtain formal approval
- Start implementation
What is missing? The analysis of the second layer: who has informal power? And of the third: which hidden agendas exist?
The result: the project is blocked, not openly, but through “resource bottlenecks”, “scheduling delays”, “unexpected complexity” and “necessary safeguards”. After a few months it is often dead, and you do not understand why.
How to analyse all three layers
Step 1: Identify stakeholders. Who is relevant to your project?
- formal decision-makers
- formal veto players
- informal influencers
- those affected, even without a formal role
Make a complete list, not only with the obvious names but also with those who are “formally not responsible” yet still have informal influence.
Step 2: Map all three layers. For each stakeholder, note what applies on each of the three layers. A typical case:
- CFO: formally his approval is required, informally he has had direct access to the CEO for 20 years, and his agenda is to keep control of the budget.
- IT director: formally only “advisory”, informally he sits on every technology committee, and his agenda is fear of losing power.
- VP Ops: formally project lead, informally new and without a network, and his agenda is to prove himself.
- Board member X: formally neutral, informally with authority, and his agenda is loyalty to the old system.
Now you see a more complete picture.
Step 3: Develop a strategy for each layer. For each stakeholder:
- Formal layer: How do I address the formal role? Which approvals do I need?
- Informal layer: How do I use the network? Whom do I need to involve before the formal decision?
- Agenda layer: How do I address the hidden agenda? How do I take fears seriously? How can an opponent become an ally?
A typical case, the CFO: formally ask for approval (standard presentation). Informally, have a one-to-one with the CEO beforehand and have the CFO briefed. On the agenda layer, offer joint budget control and thereby remove the fear of losing power.
Step 4: The right order. Those who tackle the layers in the wrong order have a harder time.
The typical order: prepare the formal presentation, meet the decision-makers, then be surprised by resistance.
The better order, from the inside out:
- Address hidden agendas: hold one-to-ones, understand fears, balance interests.
- Forge informal coalitions: involve key people, secure informal approval, dissolve resistance.
- Bring about the formal decision: meeting, presentation, resolution.
When you go into the meeting, the decision should ideally already be prepared. The meeting is then only the formal confirmation.
The difference: react or shape
Those who only see the surface:
- believe in the power of the better argument
- analyse only formal structures
- present in the meeting
- meet unexpected resistance and lose
Those who understand all three layers:
- address hidden agendas in advance
- build informal coalitions
- go into the meeting with a secured majority
- have much better chances
That is the difference between reacting and shaping.
Summary
- Layer 1, formal power: Who decides according to the org chart? Title, hierarchy, budget.
- Layer 2, informal power: Who really decides? Networks, access, information.
- Layer 3, agenda power: Why do they decide that way? Fears, interests, loyalties.
Many mainly analyse the first layer. Those who shape effectively use all three.
Your next step
Take your most important current project and ask yourself three questions:
- Formal layer: Who formally has decision-making power?
- Informal layer: Who has informal power without being in the org chart?
- Agenda layer: What does each of these stakeholders really want? What fears do they have?
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