In contrast to traditional, hierarchical organisation structures, the reporting relationships of a matrix organisation are set up as a grid, combining the direction provided by two or more axis of the organisation.  Typically, this combination is based on an operational line and a functional line but may try to incorporate a variety of market, product and competence-based perspectives to achieve the right balance in achieving specific outcomes.  They are therefore often complex to navigate and as a consequence, employees are expected to manage the inevitable ‘healthy tension’ to achieve the best outcome.

Why would a business use a matrix organisation?

A matrix organisation attempts to deal with the real-life complexity of business execution in industries where scale, standardisation and synergy co-exist as priorities with market responsiveness, competitiveness and autonomy.  Business might do this for several reasons, but the core objective is to break the barriers often seen in traditional hierarchical organisations.  Matrix organisations are intended to increase the exchange of information, fostering close collaboration between departments and developing lines of communication to enable timely and high-quality decision making.  It is also intended to motivate colleagues through a more democratic leadership approach, incorporating a broader range of input into decision making.

Challenges of adopting a matrix organisation

The single biggest challenge of matrix organisations is the loss of clear authority and accountability.  For businesses that rely on extreme clarity of decision making, matrix organisations present something of an obstacle for achieving that.  This is not to say the quality of decision making diminishes in this context but the complexity of making decisions through a matrix can sometimes outstrip the complexity of the issue at hand.  Equally, the time it takes to get a decision through the grid may not measure up to the timeliness with which your business needs to operate.  If multiple perspectives are required in decision making then one way to address this issue is to document a simple accountability chart so that it’s clear what each role or participant in the process is expected to contribute and how decisions are made in the absence of agreement.

The unfortunate consequence of such challenges is often the rise in number and duration of meetings and the simple capacity challenge this creates – regardless of the quality of meeting facilitation – as more organisational resource is poured into each step of decision making by committee.  The inevitable competition for resource plays out in most large matrix organisations despite the apparent riches at their disposal.

In addition to the procedural challenges of decision making, the very real challenge of competing goals and strategic tension are not easily resolved by everyone.  Navigating the tensions laid bare by matrix organisations requires a specific set of skills and behaviours.

In operational terms, the absence of clear accountability, variability in decision quality and timeliness and resource-intense operation of a matrix put significant onus on mid-level line managers or supervisors to decipher direction.  A Harvard Business Review article in 2012 identified empathy, conflict management, influence and self-awareness as the four competencies consistently found amongst successful leaders of matrix organisations.  It should not be assumed that all line managers are confident or competent in those areas.

Managing the matrix tension

Ignoring the tension between line and function is not a practical option, but there are a few ways that these challenges can be addressed.  Firstly, as alluded to earlier, having a very clear set of accountabilities within the grid system increases transparency.  Coupled this with a system of developing shared objectives provide the mechanism for channelling effective decision making.

Secondly, developing organisational capability that aligns with the challenge.  Team homogeneity does not in itself promote the development of the necessary skills.  Teams that are designed and populated with difference (diversity) demonstrate and develop the ability to listen and respect contrasting viewpoints, which is essential for managing the matrix tension.

Finally, providing the means for people to experience different vantage points, developing rounded perspective that comes from performing roles in different parts of the organisation.  This might be a  location assignment for leaders who have largely experienced head office, or it might be a project assignment or so-called corporate function for leaders who have followed a line management career path and vice versa.

Delivering results with matrix organisations

Despite the challenges, there are the four clear reasons we can identify as to why organisations would take this approach.

  1. Client Service: meeting the need of clients/customers who require consistent service regardless of market boundaries
  2. Project Capability: increasing capability to deliver multi-market projects and systems that meet business requirements
  3. Resource Management: improving access to organisation resources so that they can be deployed to address agreed priorities whilst providing opportunities for learning and development
  4. Decision Making: enriching decision making by involving all critical perspectives leading to higher quality or more impactful decisions.

The 2017 Forbes article titled 12 ways to make matrix organisations more effective is a useful source of reflection on this topic although perhaps also provides further fuel for debate.

Aspire2BLean and Blackmore Four offer expertise in organisational change management that is context-rich and outcome-oriented.  Our companies work in partnership where our combined perspectives work to integrate people and process solutions to deliver performance, growth, agility, productivity and effectiveness.


How to work with Matrix Organisations to deliver the Best Results

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