Why can’t people make decisions in global, matrix organizations?
Only 14% of companies feel their internal processes for collaboration and decision making are working well, according to a 2016 study by Facebook for Deloitte[i]. How to improve this? Simplify.
In our experience, far too often people in a matrix organization feel obliged to involve lots of people in decisions or cc hundreds in on emails – just in case. But all that does is slow the matrix down and take away the agility that most modern matrix organizations crave. From an individual’s perspective there are a wealth of academic studies showing that information overload leads to people being distracted, confused and making poor decisions[ii]. And collaboration overload tends to fall most heavily on our high-performers.
Indeed the third most requested thing from employees across the globe is ‘simplified approval chains to enable quick decision making’, according to Mercer’s 2017 Talent Trends survey of 7,500 Executives, HR professionals and employees in 38 countries and 20 industries.[iii]
When striving for agility, McKinsey[iv] recommends companies divide the decisions they have to make into three types:
- Type 1: big decisions where the stakes are high
- Type 2: frequent decisions that need to be discussed and collaborated on across business units
- Type 3: decisions that can be broken down into smaller ones and delegated as far down towards the front line as possible
Our experience is that people in a matrix organization often tend to lump all types of decisions together and make them all collectively by consensus. However the most agile companies are those that can move as many decisions as possible into Type 3 decisions, and are happy with ‘good enough’ decisions rather than aiming for (unattainable) perfection.
For the Type 2 decisions where collaboration is required, McKinsey suggests that companies:
- Establish clear charters for committee participants
- Clarify overlapping roles
- Rotate individual members between committees
- Hold virtual meetings to speed up decision making
- Spend meetings in robust discussion and making real-time decisions; not information sharing through endless presentations
At Global Integration we have found that decision-making in a matrix organization can be improved significantly by clarifying specifically who needs to be involved before, during and after making decisions and by being explicit about what process will be used for making routine decisions. Check out an interactive graphic of our matrix management learning path and module contents.
It’s worth it. 2016 research from Deloitte with over 2,000 global HR and business leaders statistically proves that “companies that reduce cognitive overload through clarity of decision-making and matrix management far outperform their peers in financial results”[v].
[i] Deloitte and Facebook (2016) Transitioning to the future of work and the workplace.
[ii] Kahneman, D. (2011) Thinking, Fast and Slow, New York: Farrar, Straus and Giroux.
[iii] Mercer (2017) Global Talent trends https://www.mercer.com/our-thinking/global-talent-hr-trends.html
[iv] Aghina, W., De Smet, A. & Weerda, K. (2015) Agility, it rhymes with stability, McKinsey Quarterly. https://www.mckinsey.com/business-functions/organization/our-insights/agility-it-rhymes-with-stability
[v] Derler, A. (2016) High-impact leadership: The new leadership maturity model, Bersin by Deloitte.
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