Matrix management in the world’s most admired companies

Fortune magazine has released its twelfth annual rankings of FORTUNE World’s Most Admired Companies (WMACs). Many of them are our clients so it is good to see their success recognized.

This year’s they also looked at how organizational design and operating models help WMACs build more effective organizations than their peers.

They found a wide range of different structures and levels of centralization or decentralization. The most effective were ones that matched the company’s strategies and enabled them to react flexibly in different situations. There is no “one size fits all best structure”

They also concluded that it is people, not organizations, that execute strategies and the admired companies do more to enable their leaders to be effective. They provide the tools and better equip their leaders to work in this more cross-functional, horizontal way

“83 percent of MAC executives feel that they manage the matrix organization effectively, compared to only 58 percent of the peer group?” says Hay Group’s David Tait, who also worked on the research.

Nice to see further confirmation that it is the people skills, not the structure, that makes the difference between success and failure in complex organizations.