I read an interesting blog post on whether Apple had outgrown its traditional organisational structure
The article asks why Apple struggles to maintain focus on a full line of personal computers and PC peripherals, alongside its phones and tablets, following its apparent downgrading of some of these product areas.
It recognizes the value of its traditional functional structure in creating continuity of design across multiple products, but recognizes that no one at VP level is really focusing on specific products.
It proposes that a division, or line of business structure, would give additional focus at the product level and lead to faster innovation and updating of products.
Under the current system, it argues, the iPhone and iPad seem to suck too much attention from senior leaders at the expense of other products.
Apple is indeed unusual in a company of its size in sticking to a largely functional structure. Over 90% of the Fortune 50 and FTSE 50 companies operate some kind of matrix structure. The only ones that don’t tend to be simple domestic companies such as Fannie Mae in the USA or commodities exporters such as people who mine and export copper. Anyone with any form of complex integrated global organisation tends to use a matrix.
When you reach a certain level of scale and complexity – and Apple is certainly at this stage you have to balance multiple priorities – the needs of the function, the product or division and the geography are all important. If we try to resolve these through a purely functional structure then people at the top often become the bottleneck. We need leadership focus on them and the ability to manage the inevitable trade-offs between them.
Even in the best run organisations, the functions can easily become silos where functional excellence takes precedence over the end-to-end delivery of the product, process or service.
In a large complex organisation, work is increasingly becoming “horizontal” and cuts across these traditional vertical functional structures.
This doesn’t necessarily mean that you have to have a formal matrix organisation structure with multiple reporting lines, but it does mean that “matrix working” where teams or work-flows cut across the traditional silos become the norm.
It also means that managers in these organisations need to become more adept at juggling multiple priorities and competing goals. If we don’t equip our middle managers with this capability, then everything needs to be escalated and innovation of decision-making become slow and unwieldy.
Recent experiments with approaches like Holocracy and Teal with higher levels of bottom-up self-organisation are interesting, but I don’t think provide sufficient transparency and simplicity in governance for a really large organisation like Apple.
Having worked with a number of technology companies who have made the transition to major multinationals, I am sure there are many people within Apple who are resistant to the idea of becoming “too corporate”. The reality is that once you reach a certain level of scale and complexity you need to reflect this in your organisation structure and your ways of working.
It sounds like Apple is at or beyond the stage where it needs to introduce a more formalised matrix way of working.
If you are a HR person or senior leader at Apple who is looking at these issues I would be happy to help by sending the first 10 to get in touch free copies of my book “Making the matrix work – how matrix managers engage people and cut through complexity”