Cutting the problem down to size

Video: Many organizations take the matrix structure too far into their organizations, but the problem CAN be resolved

Abridged Transcript:

Hi I’m Kevan Hall, CEO of Global Integration. We are an ideas, consulting and training company that specializes in people management in complex, virtual and global organizations. I would like to share with you some of our ideas on working in these very complex organizations.

In this video, I want to talk about matrix management, in particular about how a lot of organizations take the structure too far down into their organizations, and how, by thinking more systematically, we can cut the challenge down to size.

One of the things we (at Global Integration) have noticed is that when organizations introduce a new matrix structure, they tend to overestimate the number of people who should be impacted by dual reporting in particular.

If we take as an example an organization of 10,000 people (you can scale this to whatever size your organization is) we can represent this with these chips – each of which represents 100 people. Clearly not everyone needs to have more than one boss.

We can look at three different groups within the company, each with different needs:

The first is what we call the ‘global group’. This is the small number of people, right at the top of the organization, that sit above the major functions or head up business units. They report to the CEO and don’t have dual reporting.

The life of the global group does not change that much – if you are the Chief Executive then everyone still works for you, not much has changed. They also have tremendous position power and usually have strong relationships and networks – they can still get things done pretty easily.

This is a group of people who don’t have multiple bosses themselves, but need to understand their role in sponsoring and creating an environment where the matrix can succeed.

Our clients tend to be large global organizations, but, even in the largest, this group is rarely more than a couple of hundred people. In our sample company of 10,000 people (for this video) that’s probably no more than 100 – or one chip.

If we switch to looking at the bottom of the organization, we find the vast majority of people who even in the most global of companies don’t need the complexity of dual reporting or global working. These are the people working in factories, offices and stores; they should have single line reporting. The matrix would simply add unnecessary complexity at this level. We call this group the ‘locally loyal’ and in most organizations this is 80 – 85% of the workforce.

For most people, this is great news! These people just don’t need different skills. We should, as much as possible, protect them from the complexity of the matrix.

If you find that your dual reporting structure has gone right down to first line management level then it is likely that you have gone too far. It is also good news because the group that is left to address is now a much more manageable size.

We call this group in the middle ‘the matrix middle’. These are the people who are most affected. They need to transform the strategic intent of the global group into the practical steps and actions that are necessary for the locally loyal.

They are exposed to the complexity of competing objectives, of multiple bosses, and of the need to manage trade-offs. These are the people we should focus on, and this is where we need to invest our time and effort in building the management skills necessary to make the structure work.

So my advice is to look at your matrix structure and to make sure you haven’t gone too far down into the organization, beyond where this additional complexity really adds value.

Second, focus on your global group and make sure that they have the skills necessary to lead in this environment. In our experience, this group often underestimates the impact of the change to a new structure, because it is not such a big change for them.

Third, focus most of your effort on the middle: these are the people who genuinely need to build significant new skills in matrix management.

Thank you for watching and good luck.


Page last updated April 2013

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