Every company has two organisational structures. First, there’s the formal structure. This is the one everyone talks about and that can be seen on official organisation charts. It shows who reports to whom, who is responsible for what and how everyone is supposed to communicate with each other.

But then there’s another organisation that few talk about but is at least equally important and driven by the 'water cooler' phenomenon. It’s the informal organisation within the company. It’s the structure people follow when they don’t have the time to do it the right way. It’s based on who knows what, who gets things done, who has influence and power, who must agree before an idea can be effectively implemented.

The water cooler phenomenon refers to those spontaneous conversations around the water cooler or in the company cafeteria or corridor that are important for generating new ideas or approaching old problems in new ways. Although some of the talk will be about sports and TV shows, most water cooler conversation focuses on work: people ask about current projects; they bounce ideas off one another; they get advice on how to solve problems.

Informal interactions of the water cooler type foster the development of a sense of community: shared values, norms, and “war stories” that make the organisation unique and facilitate collaboration among its members.

The challenge of going virtual

As businesses and their teams become more virtual the organisation uses electronic networks to link people, assets, and ideas to create and distribute products and services without being limited to traditional organisational boundaries or physical location. People in virtual organisations come together electronically for short periods of time to accomplish a specific task and then as the task is completed; the individuals join other task forces.

Employees no longer need to be co-located and therefore having them work from home or wherever they find most convenient can make huge savings. However, when an organisation goes virtual, the sense of community weakens and therefore social capital diminishes, not to mention other negative consequences, such as isolation and alienation.

Face-to-face water cooler interactions are so special because their intrinsically informal and unsupervised nature allowed any kind of discussions to take place freely. Therefore, in virtual organisations, “virtual water coolers”, ie, online spaces for informal interactions must be provided and supported.

Guidelines for building a virtual water cooler

Provide minimal structures

It is better to start off with a simple technological facility (e.g., a discussion group, groupware or a document repository), and then to progressively build upon it rather than to come up with a sophisticated application that might be too constraining social interactions.

Allow for tinkering and appropriation

IT designers and managers often assume that technology is going to be used according to their intentions, just to find that people appropriate and adapt IT to better suit their particular needs. Therefore, once a simple “virtual water cooler” facility (eg, online forum, mailing list) has been provided, people should be allowed and encouraged to play and experiment with it in order to better integrate it into their work processes, ie, the technology should be appropriated by people and adapted in such a way as to support their informal interactions.

Bottom-up instead of top-down approach

The virtual water cooler, need not be designed entirely by management and forced upon employees, instead, it’s the employees themselves who have to decide what kind of space they need that fits their work practices and styles of communication.

This is especially important now that many employees are IT savvy and are therefore able to select among different technologies, which may be subsequently modified. This does not mean that control and accountability should be relinquished, but rather a more relaxed approach toward IT governance should be adopted.

Building a culture of trust

All of these guidelines do not make much sense if the culture in the organisation is strongly hierarchical and control-oriented. A corporate culture of trust starts at the top. Senior management should ensure that there is congruence between what they say and what they do. Similarly, in organisations where information hoarding, cutthroat competition, and individual reward are the norm, any efforts to build a virtual facility for informal interaction and sharing of ideas are not very likely to succeed.

The new role of management

If people are going to work from home and interact via “virtual water cooler” online facilities, a natural question to ask is what will the role of management will be? An instant response may be that some layers of middle management are redundant. On second thought, however, it becomes clearer that managers have to take up a different role, that of facilitator.

This implies a big change of mindset: from being served to serving others, from requiring reports and information, to providing it to “subordinates”. In the virtual organisation, managers are going to be in charge of surveying the needs of employees scattered across the world and ensuring that such needs are met.


What makes for a successful “virtual water cooler” has to do primarily with social, cultural, and organisational issues, and secondarily only with technological features. It is more important, therefore, to address these social, cultural, and organisational issues than to seek endlessly for the perfect technological platform. One critical role of technology, however, is to provide new resources for making togetherness more continuous in spite of separation in time and space. Technology should be seen as something to play and experiment with in such a way that permits its natural appropriation and integration into people’s work practices in a seamless way.