In 20 years of working with matrix organizations it’s been interesting to see how many companies fail to complete the key stages of change necessary to a successful matrix implementation.
This involves being clear about the strategy, changing your structure, aligning your business systems and developing the skills, culture and way of working you need to succeed in this more connected and interdependent environment.
Here are some of the big (and common) mistakes we’ve seen:
1. Unclear launch communication – it’s not unusual for the only communication about the new strategy and structure to be a long email with a PowerPoint deck attached. Everyone else in the organisation is expected to spontaneously understand the thinking and change their way of working based on 50 pages of bullet points. If people don’t understand the benefits and reasoning behind the change then all they will see is the additional complexity. It’s important to keep communicating the rationale relentlessly during the change.
2. Only communicating top management changes – the initial communication often includes changes to executive roles but this is not followed up by more detailed communication of the middle management structures that flow from these changes. As a result the organisation becomes very difficult to understand.
3. Tolerating senior leadership dissent – many senior leaders are uncomfortable with the new structure where their power is undermined or shared. Whilst they pay lip service to the new structure, their behaviours show that they intend to operate the same old way. If we allow this to happen we send very mixed messages to the people further down the organisation.
4. Seeing the change as the latest fad – many organizations have trained their people to expect a structural reorganization every two years. If we don’t position the matrix as a permanent change then people will tend to do what they always do – keep their heads down in the expectation that everything will change again soon. Once you’ve established a matrix you shouldn’t expect major structural change for some time, you can achieve the flexibility you need by changing the weight of the different parts of the matrix rather than adding additional reporting lines or moving departments around.
5. Allowing your people systems to punish the behaviours you are asking for – in many cases the new organization asks people to collaborate across the traditional vertical silos of function and geography. However it’s very common for goal setting, measures and incentives still to focus on the silos. To do the right thing for the business as a whole you may need to trade off the performance of your own narrow area of control. It’s very common for there to be a 2 to 3-year gap before these important people systems are aligned.
6. Not updating your leadership capability – the matrix is a major change, particularly for the people 2 to 3 levels below the heads of function and business units. Operating at this level of complexity requires a change of mindset and skill set – otherwise people tend to apply the approaches they developed in a simpler environment which can be counter-productive. For example many matrices suffer from too many unnecessary meetings and slow decision making, part of the reason for this is too much use of teamwork and involvement when simpler ways of working would be more effective.
7. Ignoring culture and ways of working – as Peter Drucker said, “culture eats strategy for breakfast”. It can be very hard to change your corporate culture and ways of working however these have usually evolved to serve a vertical siloed way of working. A challenging example is where a company has been very relationship oriented and put a high premium face-to-face leadership. These are admirable traits in a simple environment.
However, once the company operates globally and becomes more integrated this can lead to very high levels of travel and very infrequent contact with leaders. Cultures like this can underestimate the value of communicating through technology and criticize people who try to do things remotely as “not showing up”. To be effective in this environment we need to create ways of working that are adapted to an environment where we routinely work across distance, cultures, time zones, through technology and across complex organisation structures.
We could come up with others but avoiding these mistakes would be a great place to start.
A matrix organisation implementation is a major change project. Many organizations do a reasonable job of strategy and structure change but then fail to align their systems and skills. When this doesn’t give them the benefits they sought they tend to react by changing the structure again. This leads to constant reorganizations that achieve little.
Instead – why not concentrate on embedding the change you want throughout the organisation in a systematic way.