As the nature of work in modern organizations increasingly cuts across the traditional vertical silos of functions and geography, many organizations are an increase in matrix management and introduction of a formal matrix organization structure.
But the way matrix management is implemented may be different in different functions in different industries. In this blog post we will look at some of the specific issues of matrix management in the finance function.
We’ve always worked in a matrix. The finance director reports to the business unit head, but also to the head of finance at group level. This is essential to our independence and impartiality as we provide financial oversight and a check and balance function. This is pretty much how it has always been. Matrix working is nothing new to us. Finance Director, Insurance
At Global Integration, we hear this frequently from finance people in our matrix workshops – and to a certain extent they are right.
However, this can sometimes lead them to underestimate the impact of a formal matrix structure.
In a true matrix finance people need to become much more embedded into the horizontal work structures. They can’t just sit to one side and advise. The matrix means central functions have more ‘skin in the game’ – and accountability for business results.
There are also some risks, as most organizations want to give their financial people a level of independence from their line colleagues in order to play a control and audit role.
The development of professional competence within finance is also a fairly long term activity. Professional qualifications are often rooted in particular geography – and finance people, because of the wide acceptance of their professional qualifications, may have high levels of local mobility open to them.
For this reason, finance functions in a matrix organization structure may benefit from a strong ‘solid line’ to the finance function and a weaker ‘dotted line’ to the business operations.
Irrespective of their reporting lines, finance people will need matrix management and matrix working skills to collaborate with other people in other functions and in virtual teams.