A matrix organization structure introduces, or at least recognizes, the real life complexity of our business environment. Geography, function, technology, business unit and technology (among others) are important, so why not recognize this reality in our matrix organizations structure.
However, a matrix organization structure also introduces a higher level of internal complexity and some additional people management challenges, so there must be significant advantages to a matrix organization structure that outweigh the matrix people management challenges.
Matrix organization structures were introduced in the airspace industry in the 50s to cope with complex projects. Since then many thousands of organizations, often prompted by the large strategy consultancies, have adopted the matrix organization structure to help deal with internal and external complexity.
At its simplest, the matrix organization structure just reflects this external complexity in the internal structure. Companies realize that geography is important but so is function, and so is customer grouping, product and technology. Instead of choosing a dominant organizing principle we choose to reflect all of these important strands in our structure, we have solid lines to product group and function, dotted lines to geography etc…
In a sense then, a matrix organization structure is a recognition that we cannot choose which of these is more important, so we need a structure that allows them to be balanced and prioritized on a daily basis.
What this means is that, when we choose a matrix organization structure, we are deliberately trading some clarity in return for more flexibility.
The matrix organization structure itself, solves nothing, it is how people work together in the matrix organization that makes it succeed or fail – and often this is the neglected bit.
At a more detailed level the advantages that most organizations seek through using a matrix organization structure include
- improved ability to access resources across the old functional and geographic silos.
- better coordination on shared technologies across the organization (such as IT)
- Faster decentralized decisions
- improved access to a diverse range of skills and perspectives.
- improved global or regional projects
- broader and more multiskilled people development
- increased communication and coordination across the business
- reflects the needs of global or regional customers
As we can see, most of these are about improving the way people work together and breaking down traditional barriers to cooperation.
The idea of the matrix organization structure is to enable faster response and adaptation to a complex world. The matrix structure can deliver this, provided people have the skills to make the matrix work.
In our experience working with clients most of them do not communicate the benefits of their matrix organization structure clearly enough, all people see are the challenges and not the benefits that make a matrix structure worthwhile.
Why did your company introduce a matrix organization structure?
Listen to our podcast on matrix management