K3 Insights

Having worked with matrix organisations long before Keanu donned a leather jacket and dodged his first slow-mo bullet, it’s interesting to be a part of a lot more conversations recently around this type of organisation design. 

With the obvious challenges we are all facing, driving a need to not only operate more efficiently but also simultaneously enable growth, many organisations have or are looking to adopt a matrix structure. There is no perfect organising structure, but if you set up a well-functioning matrix it can help solve the complexities created through the need for these dual focus areas.

Quick side bar - While a lot has been written more recently about Agile design (me included), whether the adoption of the behaviours or a full structural change, for many businesses the latter is a step too far.  Interestingly, often we have been supporting the design part of a matrix design, but embedding the agile principles when it comes to ways of working - but that’s another article. 

The first question you need to ask is ‘do I need a matrix’?  This type of design will absolutely help you work across boundaries, maximise the use of resources and better face into the complexities of your marketplace.  However, if there is any unease about its ability to support the delivery of differentiation and go to market effectiveness, then re-evaluate your decisions closely, as implementing it well is expensive and time consuming. 

A true matrix is where an individual formally reports to more than one person, with a design that then allows those in the organisation to work across ‘boundaries’, helping break down silos.  One of my pet peeves is that people get too focused on solid/ dotted lines, when the focus should be on the types of activities/ decisions each of these people need to be involved with.

Just like any design there are always pros/cons and with a matrix structure, it comes with multiple dimensions to contend with.  For example, I might report to a centralised Marketing Function, but also am located in a Region reporting into the Head of that Geography.   In this instance, the design allows for greater functional expertise, specialty career growth, resource sharing, but also greater understanding of market conditions, leveraging enhanced insights across regions, increased speed to market and product design.

Yes, there will be challenges around performance management, decision making, politics and communications but these can be designed around with the inclusion of clear ‘linkages’ across the dimensions. Too many businesses give up on a matrix too early because they are not willing to invest the time in mitigating the risks.

In planning for a Matrix there are two levels of challenge to solve for, with a few of the key questions that require a well thought through response detailed below:

Strategic

• Is there an agreed rationale for the model and are the benefits vs. risks clear?
• How will the organisation set priorities, allocate resources, and realise intended marketplace differentiation through the matrix structure?
• Are the strategic and business planning processes aligned?
• Are the HR processes designed to support the matrix, with a specific focus on ‘functional’ clarity?
• How significant is the culture change that is required given the potential risk this creates?

Operational

• Are the expectations of leaders clear and well role modelled?
• Are the roles involved in the matrix well defined?
• Are the multiple managers/ employees involved clear on how the ‘intersection’ will work in practice, including having agreed decisions rights?
• Is there a robust approach to performance management and rewards?
• Who in the matrix will provide access to attaining specialised skills?

There are many more questions but it is critical that these two dimensions are considered fully and clearly agreed design decisions made to avert the cost, internal confusion and customer impacts when trying to implement an ill-conceived model.

In our experience the number 1 driver of the success of any matrix is leadership capability – not enough time, money and resource is set aside to help facilitate the required change in capabilities.

As a leader in a matrix, the required skills are different to operating a more traditional model.  You need to:

• be well equipped to make decisions in a far more ambiguous environment,
• be able to manage the tensions created when people are not ‘direct reports’,
• work through how to effectively share resources across teams,
• have an enhanced ability to influence: or negotiate across boundaries,
• create the right environment for balanced performance management,
• while also leading with a myopic focus on finding opportunities to enhance alignment so that potential issues are averted and continuous improvement becomes a cultural norm.

In conclusion, organisations need to create a strategy that allows them to deliver their unique proposition to market.  The vehicle to deliver this may be a matrix structure, which when well implemented, can be immensely powerful but as detailed above there are numerous things that need to be designed for prior to announcing a change in model. 

As Morpheus said at the start of the Matrix - "I can only show you the door, you're the one that has to walk through it" – which is relevant and robust organisational design advice when you consider the key role of leaders in any matrix model, just make sure you are fully equipped for what is on the other side!