Eight trends in matrix management #4. Slicing and dicing the information.
One of the reasons that early matrix management implementations may have failed was that it was extremely difficult to reflect the new responsibilities in profit and loss statements, and to measure progress and success at the right level of granularity, as we moved down into the matrix organization structure.
Power often follows the money in organizations, and matrix organizations are no different, so whoever owns the P&L and can claim credit for moving revenue and profit numbers automatically has influence.
As information systems become more flexible, we should be able to ‘slice and dice’ our financial – and other – measures to provide multiple cuts of the data. So we should be able to report at a functional level and at a business unit level, and at a project or other activity stream level etc…
One of the fundamental challenges in matrix management reporting is that, in a more connected world, the revenue side of the profit and loss account is most heavily influenced by the horizontal flows of activity, by tasks that are carried out across geography and functions.
The expense element of a matrix, however, is very often incurred in the vertical functional organization.
As a result we get a natural tension between revenues and costs. This, of course, existed before, but now has become much more polarized by giving different weight to different reporting lines in the matrix organization structure.
We should design our matrix management systems and structures to enable them to have both meaningful impact and a meaningful set of measures against which to evaluate their success.