Time to invest in people

In my recent research on the Fortune 50 and FTSE 50 organizations, I found that 90% of them operated a matrix structure. Collectively, these hundred companies employ over 9 million people.

So 90% of these are matrixed and within these companies  about 15% of people on average will be in managerial and professional roles where matrix, virtual and global working become common. That’s still 1.215M people who need to develop appropriate skills.

With 4% staff  turnover 48,600 new people come into these roles every year.

Another 1% are internal promotions of people moving into these roles – another 12,150.

So assuming everyone is already fully skilled in these aspects of working, they still need to train over 60,000 people per year just to keep up to date (and remember this is only a small sample of the total number of people working in complex organizations).

But some of these organizations are relatively new to, for example, matrix working. Several of our clients have more than a quarter of a million employees and are just introducing a formal matrix structure. For a company of this size, with 37,500 existing managerial and professional people, up-skilling can be a huge challenge.

Many of them spend heavily on strategy and structure, consultants and enormously on software such as SAP to integrate their supply chains and connect the organization horizontally. Few are willing to invest in the significant number of training programs necessary to build the skills to make this structure really work.

In a complex organization. a badly designed structure can get in the way. However, even the best designed structure doesn’t solve the problem: it just creates a framework in which people develop the networks, communities, teams, groups, culture and ways of working that lead to success.

Sure, smart managers will eventually pick up some of the techniques, but can you afford the cost of trial and error? Also this level of complexity, some of the management rules change, and tried and tested techniques from a simpler age can be counter-productive. We can end up working harder to make things worse. A single business trip or a meeting of 10 people for 2 hours to solve a problem can cost more than the training that would have prevented the need for them.

In international working, some organizations fall into the trap of thinking “We’ve been international for decades, we don’t need training.” A major oil company could have 100,000 employees and the organization itself may have 100 years of experience of operating internationally. It will develop certain aspects of its culture and ways of working to support this.

It could have 750 new people year (based on the calculations above) who are new to this environment.

As it becomes more integrated people who formerly have worked with national organizations in back-office functions can become more connected, for example, with the rise of global IT and global HR organizations. These people may not be experienced in the complexities of international work, even though their host organization is.

Globalization and integration are huge business opportunities but there is no such thing as a free lunch! It’s not just about strategy, structure and systems. If we don’t get the skills right, we may find that the structure doesn’t work  – and often we then respond by reorganizing again.

For many organizations, matrix, virtual and global leadership and cooperation are critical challenges, yet their management curricula often ignore these topics in favour of presentation skills, influencing and basic leadership –  the kind of training programs our parents went on.

If people really are our most important asset then we need to invest in their development, not just in the software that surrounds them.