Can your matrix organization be both connected and agile?
After the financial crash, many organisations introduced the matrix with a clear goal of becoming more centralised, identifying synergies, centralising their functions and driving out cost. Today our clients want to achieve those benefits, but they also want to be more flexible and agile. Being both more coordinated and more flexible is tough.
Being successful at this depends on being clear about why you have a matrix. If you announce that it is all about synergies, cost savings and centralisation then don’t be surprised if that’s what you end up achieving. Also don’t be surprised if after a few years your people say, “you know we are not as flexible as we used to be”.
Similarly, some organizations have pursued an agile transformation with a single-minded focus on autonomous teams, enabling them to make their own decisions and to operate without “interference” from the rest of the business. Unsurprisingly, these organisations start to notice that they are less connected horizontally, that there is more duplication of effort and that people are now working in silos. That is not surprising because it is effectively what you asked for.
Agile pioneers like Spotify recognise that autonomous teams can only thrive when they are connected as part of a dynamic matrix made up of chapters, guilds etc. to provide the horizontal connectedness within the organisation.
I have talked to two CEOs recently who really get it. They very clearly articulated this duality “on the one hand I want people to be more connected and to find the synergies in the business. On the other hand, I want my local operations to have autonomy and be able to be flexible to local customer needs”.
Because of this clear statement of what they are trying to achieve, the nature of their matrixes already encapsulates the need to balance these competing pressures – and that is the whole point of the matrix.
The reason we have multiple reporting lines is to encompass these competing demands and priorities and to change focus when priorities change. If we could decide for example that the business unit always has priority over the function, then we would not really need a matrix.
The fact that the matrix is too centralised is not the fault of the matrix. It is usually because of a deliberate decision to implement it to deliver centralisation. This is often accompanied by common global systems implementation and developments in functional excellence. When these things lead to more centralization, the matrix gets the blame.
As always in strategy and structure, be careful what you wish for. Every choice brings a benefit and extracts a cost. If you set out to achieve centralization don’t be surprised if you pay the price of reduced flexibility, and vice versa
If we want our matrix to be flexible, we have to have a dynamic balance of power between the different elements of the matrix and an explicit process for deciding how to change this balance over time.
This starts with a clear articulation of what you are trying to achieve – structure and way of working should always follow strategy.
What are you trying to achieve with your matrix?
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