Building an ecosystem-wide matrix

With Amazon set to clean up once again after this year’s holiday season spending spree – it is worth taking a moment to reflect on how they do it. What is powering them to exponential success is a super slick ecosystem-wide matrix organization. On the other side of the world, Alibaba is doing the same.

“Amazon’s core strength is in pulling others together in a matrix to work interdependently to deliver things more simply, easier and more cost-effectively than anyone else” explains author and leadership expert George Bradt.

So whilst struggling P&G recently “ditched” their complicated 3-way matrix structure in favour of six autonomous ‘Sector Business Units’, these tech behemoths continue to expand their matrix working to include more and more partners, suppliers and new business ventures.

In reality even when organizations like P&G claim to have ditched the matrix they have usually only evolved into a different form, it’s hard to imagine that P&G will not still operate global functions or share some critical capabilities and business processes across these 3 new SBUs.

P&G’s issues with their historic matrix structure appears to have been driven by too many people getting involved in decision making, and a lack of skills in how to manage accountability without control – leading to what P&G dubbed their ‘Matrix Thicket’:

Source: Company fillings

As Amazon and Alibaba’s continued success demonstrate, the future does lie in ‘horizontal working’ and joining up all the elements of a customer’s experience – including extending beyond the traditional borders of our firm.  However as we learn from P&G’s experience, it is not always easy to get the right balance of connection, communication and cooperation across and beyond the business, without this becoming a tangled mess.   As in the quote above, the key is to work together to deliver things more simply, rather than letting the ‘working together’ bit make things more complicated.

Thinking about your world, take a moment to draw out the ‘ecosystem’ that surrounds you and your customers – from internal teams, to suppliers and external regulators. Where would it help to strengthen the ties and connections between some of these players?  How can you do this in a simple way that doesn’t add meaningless layers of bureaucracy?

Getting this balance right is what differentiates those riding the wave of exponential success, in all corners of the globe.