Today while explaining my son how our heating system works, it brought me back to my earlier post about organization charts. Same as in heating system where you have a heating loop and a control loop, 2 loops exist in every organization. The first is formal and visible—it's drawn out in neat boxes and lines as your organizational chart, showing who reports to whom and where decisions get made. The second is informal and largely invisible—it's the actual pathways through which information, ideas, and real work flow to get things done.
The two flows of organizational systems
When we apply systems thinking to organizations, we can identify two critical flows that determine how effectively an organization functions:
Control flow represents the formal authority structure—who has decision-making power, who approves what, and how accountability flows up and down the hierarchy. This is what your org chart captures beautifully with its clean boxes and reporting lines.
Information flow represents how knowledge, data, feedback, and insights actually need to move through the organization to solve problems, serve customers, and create value. This flow rarely follows the neat hierarchical paths shown on org charts.
The fundamental challenge is that most organizations optimize for control flow while inadvertently constraining information flow. They create clear reporting structures but force critical information to take circuitous routes through multiple layers of management, creating bottlenecks, delays, and distortion.
The real-world impact
Consider a typical software company where a customer reports a critical bug. The information flow that would solve this problem fastest might look like:
But the control flow shown on the org chart might require:
Each additional step in this chain introduces delay, potential for miscommunication, and often dilution of the original problem's urgency and context.
The shadow networks
In healthy organizations, informal networks emerge to route around these structural impediments. The support representative develops a direct relationship with a developer who can quickly assess technical issues. The product manager maintains back-channel communications with key customers. Cross-functional teams form organically to tackle complex problems.
These shadow networks are often what make organizations actually work, despite their formal structures. They represent the organization's natural tendency to optimize for information flow even when the formal structure optimizes for control flow.
When control flow dominates
Organizations that rigidly enforce their hierarchical information paths often exhibit predictable symptoms:
- Slow response times to customer issues or market changes
- Repeated escalations of simple problems
- "Telephone game" distortion where information changes as it passes through layers
- Frustrated employees who know exactly who can help but can't reach them directly
- Innovation that gets stuck in approval chains rather than rapid iteration cycles
The irony is that by trying to maintain tight control over information flow, these organizations often lose the very thing they're trying to achieve: effective oversight and accountability.
Designing for both flows
The most effective organizations recognize that you need both clear control structures and efficient information pathways. They maintain accountability and decision-making clarity while enabling information to flow along paths of least resistance and maximum value. If your organizational design forces critical information through unnecessary checkpoints and delays, you're essentially building slower reflexes into your system.
The goal isn't to eliminate hierarchy or control structures—these serve important functions in maintaining alignment, accountability, and strategic direction. The goal is to design organizations that excel at both control and information flow, recognizing that these are complementary rather than competing needs.
Moving forward
The next time you look at your organization chart, ask yourself: If information flowed exactly along these lines, how long would it take to solve your customers' most common problems? How many critical insights would get lost or delayed in translation? How much innovation would get stuck in approval bottlenecks?
Your org chart tells you how authority flows through your organization. But understanding how information actually needs to flow—and designing systems that enable rather than constrain that flow—might be the key to unlocking your organization's true potential.