An Alternative to Matrixed Organizations

At a conference I attended for HR, training and leadership development professionals, research analysts suggested that the most successful organizations leverage a matrixed operating model. This data was presented amid other key learnings for effective organizations and as soon as participants were given time for open discussion, my tablemates immediately zeroed in on the idea of a matrixed organizational structure. And needless to say, they didn’t have many positive things to say.

In matrixed structures, employees have more than one reporting line, often crossing over functional areas, geography and typical business silos. This model is meant to maximize individual’s particular skills sets and enhance collaboration, often to drive toward a particular project/outcome or respond to multiple market demands simultaneously. Though organizations like General Electric have been using this model for decades, we still see – as I heard from participants at the conference – some long-standing challenges with this type of structure. Often, employees struggle with lack of clarity around roles and who has final decision-making rights, a culture that lends itself to competition for power and a slower bias for action.

McKinsey suggests that an increased emphasis on role clarity helps keep employees in a matrix organization engaged. At Kotter International, we believe role clarity is important but know that it isn’t enough on its own. We’ve found an alternative that provides the benefits of the matrix while protecting against some of the pitfalls – creating a hierarchy and a network that live side-by-side. John Kotter’s latest fable That’s Not How We Do It Here! – A Story About How Organizations Rise and Fall…and Can Rise Again provides a quick read on what such a structure looks like and why its needed. In the meantime, let’s explore what I mean by hierarchy and network and the benefits (and drawbacks) of each.

The hierarchy. The hierarchy (think traditional org chart) typically begins to emerge and take hold as organizations grow and mature. Positional leadership roles and direct reporting lines are clearly established and provide key management structures. Managers and Senior Leaders are tasked with budgeting, planning and maintaining operations. This structure, when done well, allows for consistent and efficient results. But, on its own, the hierarchy is slow to change and relies too heavily on a select few leaders – something organizations today can’t afford.

The network. The network operates much more like a startup, creating cross-functional, cross-level teams drawn from the hierarchy. These employees maintain their “day jobs” within the hierarchy while also serving as part of the network. It leverages discretionary energy of passionate employees to innovate and quickly adapt to change. These teams work together to identify and execute against initiatives they believe will move the organization towards its strategic priorities and propel it into the future. Though the network allows for leadership behaviors to flourish at all levels of the organization, it can be chaotic on its own – making it difficult to execute against critical day-to-day tasks.

The matrix model was developed to address many of the drawbacks of the hierarchy alone. However, the hierarchy and the network both serve critical purposes – management and leadership – for organizations operating in an increasingly complex and changing environment. The hierarchy provides needed structure and role clarity, while the network fosters innovation, agility and collaboration. Together, they have the power to create an unstoppable force in the market.

Doesn’t every organization want to be that force?