Many organisations have introduced the matrix structure in some form or other within the last 5-10 years to strengthen their capability and ability to timely and efficiently respond to changes in market and customer needs, in short to strengthen their market efficiency, by connecting intersections across hierarchies and siloes.
But the obvious advantages of the matrix also come with its own set of issues that could impede the continued development of the organisation’s responsiveness to market needs. And you have to accept that you cannot analyse your way to the perfect matrix or the perfect organisational structure. You also have to accept that adjustments to the organisational framework should be done on a continuous basis and should only be defined and driven by specific market needs or situations.
FIX THE ROOT CAUSE, NOT JUST THE SYMPTOMS
So, what are the expected benefits of the matrix organisation? The matrix structure can help you increase the connectivity in intersections where synergy effects are desired. But on the other hand, the matrix structure can and most likely will result in barriers impeding the desired responsiveness and market efficiency
When working with optimisation of matrix organisations, we often come across these top-three matrix challenges:
- Unclear roles and responsibilities
- Complex and opaque decision-making processes
- Incentive and KPI structures that do not support the matrix
Focus is typically on identifying the optimal role and responsibility allocation, adjusting meeting and decision-making structures, changing KPIs, etc. You do an end-to-end analysis of the defined corporate procedures and spend 2-3 months on analysing the findings and making recommendations for changes to the matrix model. After that, you spend 3-6 months on implementing the improvement recommendations in the belief that you have solved the structural problems.
Except, you haven’t.
You have only solved the issues relevant at the time of the analysis in order to learn that the very same issues will re-occur somewhere else in the new matrix. You still haven’t increased your responsiveness to market, which is a critical objective of the next-generation matrix and for every other type of organization for that matter.
In reality, the biggest challenge is your own approach to solving these challenges. The issue is that you try to fix the problems with a mindset and an approach that will only serve to reintroduce the very same problems after you think you have solved them. The most difficult challenge for many CxOs is to acknowledge that their main leadership task is to develop the organisation’s ability to independently identify and execute organisational adjustments and NOT to launch an analysis of the optimal matrix structure every two to four years.
So, can you in fact create a market-efficient matrix organisation without abandoning the matrix organisation structure? Yes, but it takes leadership courage and an ability to dare acknowledge that you will never be able to design the perfect organisation. It sounds simple, but paradoxically many executives want a high degree of flexibility and efficient responsiveness in their organisations but also seek the right structure to achieve this.
The point is that you cannot create a flexible organisation with a static approach and mindset.
UTILISE 2020 LEARNINGS TO DEVELOP YOUR MATRIX
Why not use 2020 as lever for developing a more dynamic mindset and organisation? In fact, the energy and execution power that many organisations experienced during the lock-down in the spring of 2020 had just the characteristics you need in order to be able to act quickly and efficiently with respect to the market:
- A concise purpose and/or problem to be solved
- Mobilisation of (just) the right people able to contribute to the solution and execution
- Empowerment of the mobilised group’s ability to execute.
It is basically these characteristics that you need to make an integral part of your organisation’s continuous operations and development. But it will take executive courage to overcome the challenges.
DO MATRIX EFFICIENCY – DON’T THINK IT
So how do you mobilise your organisation to independently identify and assess the need for course adjustment with respect to corporate procedures across units and matrix intersections when there is no pandemic to act as burning platform? This ability is crucial for your organisation’s ability to develop and mitigate integral matrix frictions and also respond quickly to any changes in market conditions.
If you want to strengthen your organisation’s execution power and responsiveness, you need to design a development process with the same characteristics you aim for in the market. In doing that, it is paramount that you shift your focus in developing the organisation from being output-driven to outcome-driven.
a) Focus on outcome
Focus on very specific must-win battles that will be critical for your success in 2021. Select a representative number (3-5) that cover synergy intersections across the organisation (e.g. geography and product), that cover primary business areas and that are ambitious. Mobilise individuals with insight and competences necessary to ensure the execution.
b) Focus on speed
Define an accelerated green field test of what is ideally required of the organisation in order to realise your must-win battles. Identify key conditions for success, including critical organisational barriers. Prepare a plan for execution with suggestions for adjustments.
c) Focus on execution and scaling
Assess and prioritise changes to the individual initiatives. Approve and adjust execution plan for each and execute. In parallel, carry out a cross-organisational assessment of your 3-5 must-win battles with respect to the need for general structural adjustments in the organisation. If any identified organisational barriers go across the 3-5 test cases, focus your optimisation efforts there where you will get the greatest and fastest effect instead of boiling the ocean throughout the matrix.
It is crucial that your efforts are centred on specific critical initiatives and the execution of same. This should be the focal point for any organisational adjustments.
DEVELOP FOR CORRECTION AND NOT FOR PERFECTION
This process should not be a one-off occurrence. Sure, you can execute this process once and improve your chances of succeeding with your must-win battles and adjusting the primary organisational barriers in your organisational structure. But if you want to develop your organisation’s ability to continuously identify areas that need adjustments, you need to consider the process as a continuous loop.
2021 is looking to be just as unpredictable as 2020. Use the valuable learnings from 2020 to take the next development step. Do an organisational stress test of selected must-win battles and offer them the optimal conditions for success. At the same time, you should develop your own and the organisation’s ability to navigate successfully through constant change.