An MM 2.0™ Compliant Quick Guide Series
Matrix Management 2.0TM
9. Why Restructuring Doesn’t Work
10. Mapping the Horizontal
Why do most organizations decide they need to restructure?
The current alignment isn’t working, or
There has been a change in business strategy, and realignment
is necessary, and/or
They want to become more efficient. (For example, they want
to centralize all segments of a process or function in order to
improve the way that process operates.)
A matrix organization has both a vertical and a horizontal dimension, and
structure exists in both. To represent the structure in the vertical dimension,
organizations create an organizational (org) chart showing the authority
relationships between Coaches (bosses) and direct reports. This is often
the only map organizations use.
All of these are valid reasons for restructuring but not for restructuring the
vertical organization! The vertical has only one dimension to work with; it
operates in the land of “either/or”. Either you centralize, or you
decentralize.
The vertical is represented on an organizational chart with each box
representing a position, occupied by a leader or an individual
contributor (whom we call a “professional” in MM 2.0). That person sits in
one box and one box only. The org chart that everyone keeps fiddling
around with represents solid line reporting relationships: who reports to
whom. And MM 2.0 doesn’t depend on reporting relationships to get
things done, so it doesn’t really matter who reports to whom. What
matters is deploying resources in alignment with your business strategies
and priorities.
Let’s say you have a central engineering organization, and you have
manufacturing plants in various regions. In VM 1.0, the engineers could
report to the Central Engineering group or they could report to the plants.
In MM 1.0, they report to both, but having two bosses doesn’t solve the
problem: it only creates mixed signals to the engineer who then feels
pulled between central engineering and manufacturing. Who takes
precedence? The person who does the performance review? The person
who has the most political power? The person who yells the loudest?
The issue is that the organization needs both global focus within an area
of technology, such as engineering, as well as a local focus in the various
districts or regions. It needs engineering excellence which comes from
grouping engineers together, but it also needs them to work closely with
individual plants. A one-dimensional organizational chart doesn’t allow
you to do both, so restructuring the vertical won’t solve the problem. What
is the answer? The answer is to create a two-dimensional matrix structure.
Then you can be centralized and decentralized, global and local,
customer-focused as well as technology-focused.
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To operate as a matrix, though, horizontal structure is needed; and the
first step to creating this structure is mapping the horizontal dimension of
the organization, showing the cross-functional processes of the
organization and the interdependencies between them.
The process we want to start with is the operating process, the process
that produces products and/or services for the external customer. (A
process can be broken down into steps or subprocesses, such as steps 1, 2,
3 and 4 in the diagram below.)
Next, we identify
support processes which are processes
that
have
the
operating process
as their customer.
(A, B and C in the
d i ag r a m ) .
A nd
finally, we map
broad
spectrum
processes, which
support all the other
processes (D in the
diagram).
The
Hiring/ Retention/
De-hiring process is
an example of a
general support process.
After we’ve identified all the interdependencies between the processes
and subprocesses, we identify the inputs and outputs required for each
and an owner for each – the person who is accountable to ensure that
process runs smoothly. Additionally, we need to set the measures for each
process, so we know how the process is performing.
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