Is functional excellence conflicting with matrix success?
We often see in our clients that the move to a matrix structure (driven usually by a desire to improve cooperation across functional and geographic silos) happens at the same time as a drive for “functional excellence” the introduction of global standards, governance and systems with in the central functions.
In the early stages this drive for functional excellence usually means a period of greater centralisation. Centres of expertise and common service centres are insulated from the matrix by business partners who manage the internal complexity of their functions on behalf of their client groups. Often much of the most interesting work migrates back to the centre.
At the same time, new standards, controls and systems have the perceived effect of reducing local autonomy and enforcing compliance. The centre can feel like it is moving from being a service provider to a police force.
So, at the same time as the matrix is encouraging cross-functional and horizontal working, the function is exercising more control, reducing functional flexibility and increasing governance. In practice this means lots more meetings, burocracy and delays to decisions which now require escalation or HQ involvement.
For the people at the point of intersection of the function and the horizontal workflow this can mean a lot more work and a feeling of disempowerment.
In general, increased central control is bad news for a matrix organization, it leads to increased escalation and can lead to a vicious circle of increasing control, disempowerment and escalation.
The matrix reflects a power shift from the vertical (function/geography) to the horizontal ( customer segments/ Business Units/business processes) but the people at the intersection point only have a certain amount of capacity.
Most were busy before the matrix and drive for functional excellence. Now they can easily be overloaded.
A key question at this stage is “what can the vertical STOP doing to make the space for the horizontal to succeed”.
Time for a bonfire of red tape in the functions to trim down to true functional excellence, cut out unnecessary meetings, controls and governance, speed up decisions and balance their demands with the needs of the horizontal.
We welcome your views.