Action List 8

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BUSINESS: The Ultimate ResourceApril 2003 Upgrade #7

Bloomsbury Publishing Plc 2003

ACTIONLIST

Coping with Matrix Management

Getting Started

Matrix management is a system of management based on two or more reporting

systems, linked both to the vertical organizational hierarchy, and to horizontal

relationships. In other words, any employee within a matrix organization, as well as

reporting upwards to more senior staff, may well also be reporting sideways to peers,

based on geographic, product, or project requirements.

Matrix management arose as a way of enabling organizations, in an increasingly

complex business world, to get the balance right between the key drivers of their

business. It is also seen as a more effective way of employing the skills and talents of

individuals within an organization, as they can be directed to where they are most

needed and add most value, for both the short term and long term.

However, implementing a matrix structure should not be undertaken lightly. It has to

be right for the business and its future strategy, and fit with the skills and competences

of the people who work there.

FAQs

Isnt matrix management good for the organization and terrible for theindividual?

On the surface it looks as if the organization is the winner when it comes to matrix

structures, as it can maximize the use made of individual skills and minimize the

burden on management. However to those running the business, matrix structures

bring pressures: they have less control; better communication is required; and it is

essential to introduce the right types of systems and procedures which allow some

control, but do not stifle the business. These systems should encourage flexibility and

ensure that conflicting needs do not hamper decision-making processesas well assetting the balance between responsibility and accountability for individuals. If they

are right, matrix management can be extremely good for the individual.

In many organizations, one structure usually predominates. How do youget the balance right in matrix roles?

Organizations are still learning how to manage vertically and horizontally. Matrix

management tries to provide the flexibility and responsiveness to be competitive.

Getting the balance right is about understanding the issues in the business and

creating boundaries for roles to ensure that value is added. Too often, not enough time

is spent clarifying what individuals, roles, and teams can contribute.


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Does matrix management really work? Surely there are some realdownsides!

Matrix management is not a new concept and has been used for years by many well-

established and successful businessesparticularly in project management. For it to

work, the business case must be strong and there must be commitment from the seniorteam to manage it well. This requires a clear understanding of the organizations

objectives and capability of individuals, plus the right systems, procedures, and

resources to meet these objectives. Management must be disciplined in not trying to

over-utilize the human and physical resource.

Isnt it easy for roles and responsibilities to get lost in the matrix?

Yes, it is. This is why it is so important to have a clear understanding of what is done

at present, how this should be modified, and how the matrix roles should be shaped to

match the capability of the people in them. Training and development are integral to

ensure success. Time should be allowed for transition between different ways of

working, and for people to adjust their approachand the need to create time for

planning should not be underestimated. Communicating expectations to those in theroles and to the rest of the business will help cement success.

Making It Happen

Changing an organization structure is a major upheaval, and putting coping

mechanisms in place for individuals, teams, and decision-makers is essential. It is also

vital to be sure that such a change is right for your strategy and the business, and that

you have the capability to deliver it. The following sections outline the stages that you

may wish to consider.

Set the Context

When deciding whether to implement matrix management, you should consider the

following questions:

What is your strategy? Where are the demands in your business? What structures are your competitors employing? What are other organizations doing? What talent is available in the business?

There are many organization evaluation tools, which help you analyze the type of

structures which are best for your business, given its culture, products and services,

and market environment.

Establish the Parameters

Define the area of your business in which you believe matrix management will work.

Make sure that this integrates well with your overall strategy as to where the business

is going; can be easily communicated, and that those who interface with it willunderstand it. Most importantly, make sure that you have the talent in your business to


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undertake and deliver the new responsibilities. Without the right talent, matrix

structures can quickly become a political nightmare. People in these roles need to be

comfortable dealing with complexity, coping well with pressure, handling conflicting

priorities, and being able to be pulled in a number of directions at once.

Implement the StructureMatrix management is a completely different approach to running a business. It

moves away from hierarchical structures, clearly-defined lines of responsibility, and

formal communication and decision-making channels. This is a culture change that

will need to be planned and managed over time, and not everyone will find it

comfortable. Be prepared for some casualties along the way, particularly those who

have personal investment in role status and definition.

You will need to create new channels of communication so that progress can be

monitored and feedback received on the effectiveness of the matrix. Matrices tend to

be dynamic and create ongoing challenges to the business and the decisions it needs to

take.

Steps in the implementation process should include:

undertaking a talent audit and highlighting development needs; defining roles in terms of outputs, not inputs; aligning systems and procedures to support the new structure and behaviors; investing in training and development; coaching and supporting key people to adapt to the changes; communicating regularly to those affected; monitoring overall progress and making necessary adjustments.

Remember that you may need to adjust your reward and benefits package. Matrix

roles are often more demanding because of the diversity of issues and contexts in

which people have to work.

Some Examples of Standard Matrix Areas

Operations BusinessDevelopment Finance HR

Customer

Account

Manager

Responsibility

for three sites

Growth

objective of 10%

per annum

Budgetary

responsibility for

account

100 people working

on the account in all

functions

Project

Implemen

tation

Project planning

across the

operational

business,

affecting sales,

marketing,

customerservice,

Identify possible

new

opportunities for

growth and/or

change

Responsibility

for completing

the project on

budget

Direct management

of the project team

and dotted-line

responsibility for

key implementation

areas


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production

IT

Manager

Responsibility

for all IT

systems,

working with

key operational

areas

Working with

customers and

business

development to

support andidentify new

ways of

working,

leveraging IT

Responsible for

supporting

managementinformation

systems

Direct management

of the IT team and

dotted-lineresponsibility to

functional heads

Review and Refine the Structure, Roles, and Individuals

Successful organizations adapt to their environment, and regular reviews will

highlight the need for changes. These can be process orientated or structural in nature.

Be prepared to alter role definitions and move individuals. Getting the right balance

between fluidity and structure is an art rather than a science, and an imbalance is one

reason why matrix structures fail.

Coping Mechanisms for Individuals

Form focus groups to discuss and identify helpful ways of creating the newstructure.

Minimize potential grievances by involving people in consultation about thenew structure.

Be aware of your own preferences. Create a development plan with key priority areas. Invest in training where there are obvious skill gaps.

Coping Mechanisms for Implementers

Choose an area of the business where there may be the least resistance tochange.

Plan the steps carefully, and make sure that you have the support of seniormanagement

Build in time to communicate, so that objections can be addressed before thechange.

Clearly define roles, responsibilities, and accountabilities. Set time objectives and put in measures. Adjust reward mechanismsand be prepared for several iterations before

finalizing them. Do not worry if this is well after implementation.

Be prepared to learn from both people and the process.


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Do a force field analysis to understand the need for the change versus theresistance you may encounter. This will allow you to pace the initiative

appropriately.

Common Mistakes

You Follow Competitors Leads Without Knowing Your Own BusinessWell Enough

When we see our competitors moving to a matrix structure, we can often assume that

it is key to achieving a competitive edge, and that it is imperative to follow suit. This

is a mistake, as their culture may be more suited to this type of structure.

Understanding your own business drivers, what is best for you, the talent you have,

and the pressures you may be under are the only relevant factors in making the

decision to move to a matrix.

You Use Matrix Management to Hide Other Motivations

Sometimes matrix management structures can be implemented to hide a different

agendaa cost-cutting exercise, as opposed to a decision made for sound business

reasons. This can result in high levels of demotivation and lack of support.

You Dont Understand the Implications of a Matrix Structure for YourOrganization and People

Businesses often do not focus sufficiently on aligning capability and motivation to the

new structure, usually because they have not fully understood the demands it places

on individuals and teams. People often have to deal with high levels of ambiguity,

which can result in stress. By spending time auditing your talent, you can be betterable to identify those who are likely to be successful and champion the change.

For More Information

Books:

Forsberg, Kevin, Howard Cotterman, and Hal Mooz. Visualizing Project

Management: A Model for Business and Technical Success. New York: John Wiley,2000.

Verzuh, Eric. The Fast Forward MBA in Project Management. New York: John

Wiley, 1999.

Web Site:

Strategic Futures:www.strategicfutures.com/articles/matrix/mtrx-1.htm

Documents

Action List 8