Making the Global Matrix Work
By Kevan Hall
Contrary to perception, the matrix structure is alive and well in large multinationals.
As organizations expand internationally, they are challenged with finding the best organizational structure to coordinate their increasingly complex operations.
Initially, they tend to operate through a geographically based structure, focusing on an individual country or region. However, once there are significant numbers of people or levels of business in another country the demand inevitably grows for higher levels of integration.
Because of this, most large organizations have moved to some form of matrix organization, even if it is just at senior levels. This way of working has some significant advantages, although it is a much more complex way for people to work together. Company leaders need to make sure that their organizations’ employees have the mindsets and skill sets to make this kind of structure work.
What is the Matrix?
A matrix structure is, strictly speaking, a structure in which people have more than one boss. For example, this would occur if the HR director in a country reports to both the general manager of that country and the group HR director.
However, many organizations also talk about “matrix working” in which employees routinely work with colleagues from different functions, locations, business units and cultures in cross-functional and virtual teams. This type of matrix working is now normal in most large organizations.
Contrary to what you find online, the matrix is alive and well and is the structure of choice for large multinationals.
Why Introduce a Matrix?
Why do organizations choose to introduce a matrix? Because structure should always follow strategy. Based on this concept, here are the top four reasons companies introduce a matrix.
- Breaking silos – to increase cooperation and communication across the traditional vertical silos and to unlock resources and talent that are currently inaccessible to the rest of the organization.
- Delivering “horizontal work” more effectively – to serve global customers, manage supply chains that extend outside the organization and run integrated business regions, functions and processes.
- Responding more flexibly – to reflect the importance of both global and local markets, the business and the function in the structure and to respond quickly to changes in priorities.
- Developing broader people capabilities – to give individuals broader perspectives and skills that can deliver value across the business and allow them to manage in a more complex and interconnected environment.
In essence, the matrix represents a move from running the business through the traditional “vertical” silos of function and geography to introducing a second “horizontal” stream of reporting and activity that cuts across the silos. Common examples are a global accounts function, global supply chain or more integrated business functions like IT and HR. The more you need to work across functions and geography and the more integrated you need to be as a business, the more you need a matrix.
The need may be driven by an internal desire to be more integrated or to create cost savings or synergies. It could also be driven by the external demands of an important customer. If a key customer demands a single point of contact worldwide, there may be no choice but to comply.
The level of matrix needed may differ depending on the function. For example, while it often makes sense to introduce supply chain leadership cutting across the traditional functions of manufacturing, procurement and distribution, it is common for sales organizations to remain more geographically focused — with the exception of global accounts.
A Step Up in Complexity
The business logic is compelling, but there is no such thing as a free lunch. Introducing a matrix does mean a step up in complexity in the way people work together and many organizations have struggled to make it work.
The main challenges include:
- Lack of accountability
- Unclear goals and roles
- Delays in decision-making (too many people getting involved
- Increase in bureaucracy (a proliferation of meetings and committees)
- Increase in uncertainty and conflict
Leaders new to the matrix often struggle with influence without authority and accountability without control. There can be significant turnover of those managers with a more traditional command and control skill set who don’t have the range of skills to get things done in this less hierarchical environment.
Both the advantages and disadvantages of the matrix are fundamentally about people and the way they work together. Delivering the advantages and avoiding the disadvantages cannot be achieved solely through a structural change, but only by building the skills and attitudes necessary to make the structure work.
In my book “Making the Matrix Work – How Matrix Managers Engage People and Cut Through Complexity,” I identify three key challenges in the way people work together in the matrix.
- Leading people beyond the limits of clarity. We set up a matrix to manage competing priorities. Inevitably in this environment, we see more ambiguity and the need to manage complex trade-offs and dilemmas. We can also expect higher levels of conflict. We need to develop people who are comfortable with this level of ambiguity and who have the capability and confidence to resolve the inevitable daily dilemmas of matrix working.
- Streamlining cooperation. We set up a matrix to increase cooperation across the traditional silos but it can lead to greater numbers of poor quality meetings, with unnecessary teamwork and communication. With two bosses we risk being invited to twice as many meetings, copied on twice as many e-mails and subject to twice as many controls. At the same time as we become more connected we need to streamline our decision processes and cut out unnecessary meetings and emails.
- Getting more control by giving it away. All organizations need to exercise control, but in a complex organization too much centralized control introduces delay, additional cost and dissatisfaction. A matrix requires the decentralization of decision-making and control. This is a challenge when we are working with people who we rarely meet and where leaders are not necessarily the experts in local conditions and cultures.
Building the Matrix MindsetNone of these challenges can be resolved just by changing the organization’s structure. We need to develop the “matrix mindset.” The key elements of the matrix mindset include:
- Self-Leadership – an employee with two bosses is likely to be the only person who really understands their own role, so the matrix mindset requires much higher levels of self-ownership of goals, role and skills.
- Breadth – the essence of the matrix is learning to think beyond one’s own role and function and to deliver results that cross organizational boundaries.
- Comfortable with ambiguity – working in the matrix means one needs to be more comfortable with change and flexibility.
- Adaptive – the rules do change at this level of complexity so we need people who are open to new ideas and new ways of working.
- Influential – people who do not fall back on traditional power and authority to get things done. They build trust and use a wide range of influence techniques and sources of power.
These are easy things to say but they do require that we develop a culture where people are supported in these behaviors. They involve some risk-taking and innovation and this will only happen in an environment in which people know they will be supported if things don’t always go right.
The exercise of this mindset also requires an updated skill set. Some of the traditional tenets of line management, such as high levels of control and over use of teamwork may actually get in the way or be too expensive to exercise in a global environment. Leaders need to learn to deliver results without traditional hierarchy and control; teams need to operate across distance, cultures, and time zones and through technology.
The matrix structure is the way that most leading multinational organizations run their global operations. It works, but it is the exercise of the matrix mindset and skill set that makes the difference between success and failure in a matrix implementation.
Kevan Hall is the CEO of Global Integration, specialists in matrix management, virtual teams and global working training and consulting. He is the author of Making the Matrix Work – How Matrix Managers Engage People and Cut Through Complexity, and Speed Lead Faster, Simpler Ways to Manage People, Projects and Teams in Complex Companies.