A number of organizations move to a matrix organization structure in order to reduce costs by sharing resources and getting better utilization of people across the traditional silos of function and geography. This is often accompanied by a focus on cost-cutting through de-layering or reducing the number of middle managers. In some cases, organizations take the opportunity to eliminate a regional or intermediate layer of managers so the head office becomes more engaged with the business units without an intermediary layer. It is rare for head office to be given significant extra resources for taking on this expanded role.
The problem is that this “matrix middle” group is absolutely critical to the success of matrix. It was always the job of middle management to take the strategy devised by senior leaders and turn it into something executable for the rest of the business. In a matrix, this is compounded by the fact that these are the people who have multiple reporting lines. They are the ones who have to balance the needs of the business unit and the function or geography. They can’t choose, once and for all, to prefer the global or local (for example), they have to manage this dilemma dynamically over time. They can’t just write a policy and then take a separation package because the answer tomorrow may be different from the answer today.
As this group gets squeezed, their ability to think and act becomes constrained. They become the bottleneck in the execution of the matrix and they cause frustration both in their senior leaders and in their local operations. The matrix extends the need for middle management thinking and involvement. The organization becomes more connected and more complex, senior leaders are focusing on strategy and direction, and it’s the middle managers who work out how this direction will be put into practice. With fewer of them we should expect that fewer things get executed less well.
I often say that “a matrix is lead from the middle”; with fewer middle managers, don’t be surprised if you get less real leadership.