Matrix Management
____________________________________________________________________
We typically see it as the leader’s responsibility to get the best out of his or her people
– but how do organisational structures help or hinder performance?
In the better, cheaper, faster world of the global economy anything that creates
bottlenecks and slows up decision-making is an obstacle to success. In this respect
hierarchical management and functional silos are bad news; what employers want to
drive through instead are teams based around co-ordination, co-operation and flexibility.
So how does matrix management help to deliver such an objective?
The matrix model came from the recognition that companies not only have vertical
chains of command but that people also work horizontally, across their functional
specialisation. This network of interfaces is the matrix and has been seen as an ideal
structure in which fast moving businesses can operate. In theory, the matrix allows
managers to harness the services of employees irrespective of their function, to work
collaboratively on key projects. On such projects the matrix manager can pool the
necessary resource in order to achieve what, from the strategic objective, is the
overriding priority.
It is a concept that, initially at least, has great appeal. It draws on the full potential of
the HR resource. It slices through unwieldy lines of control. It frees up leadership in
everyone concerned, not relying the few people who have positional power. However,
there are inherent problems with the matrix structure. A single multi-disciplinary, or
cross-functional team is one thing - but what happens when a number of these crossfunctional teams are working simultaneously requiring people to relate to one another
vertically, horizontally, and diagonally, all at the same time?
Once heralded as a great organisational breakthrough, the overriding concern about
matrix management is how to make it work. It may be that matrix structures are
exciting, dynamic and innovative but they require people to be able and willing to serve
more than one master to derive any potential benefits and this may have more to do
with culture and behaviour than any intrinsic organisational design.
The inspiration
Some commentators suggest that matrix management was first practised in the Second
World War - but more reliably its origins can be traced back to the US space
programme of the 1960s when President Kennedy outlined his vision to put man on the
moon. In order to achieve such an objective NASA had to revolutionise its project
approach and so the “matrix organisation” was born – to facilitate the energy, creativity
and decision-making needed to achieve this grand vision.
The initial success of what has been called, “the only new form of organisation in the
twentieth century”, (by Paul Evans in Managing the Global Company) ensured that
matrix management received a lot of attention in the 1970s. This came to a head with
a classic Harvard Business Review article on Dow-Corning’s worldwide matrix in 1974
written by the company’s chairman.
The matrix organisation was in vogue and organisations such as Xerox, Digital
Equipment Corporation and Citibank all employed two boss matrix management
structures as they sought to maximise productivity and harness resources. But although
people applauded the intent to keep organisations agile, by the 1980s it was clear that
it wasn’t such an easy task and corporate enthusiasm began to wane.
1
However, the impetus for finding ways of encouraging people to work flexibly and
creatively has only intensified and by the 1990s matrix management had found a new
form in the manifestation of empowerment and virtual teams where the focus was
increasingly on customer service and speed of delivery.
Research suggests that the matrix approach is still the dominant approach for
completing projects today. The vulnerability of the matrix to pressure from competing
managers will always be a problem but in what have become known as projectised
organisations - where the focus is on teams with cross-functional expertise – it offers
clear benefits. Such matrix teams draw on people with the requisite skills and
competence for any given project and, in return, they offer variety, learning and new
opportunity to those involved as well as speed and flexibility on the project itself.
This, of course, is in complete contrast to the functional organisation based on classic
hierarchy where groups are divided along knowledge lines, where each employee
reports to exactly one supervisor and where project progress tends to be measured and
controlled but also very slow.
Experimentation
In the 1970s the concept of matrix management looked like a key business
breakthrough, but by the early 1980s observers like Tom Peters were claiming that
such a structure was just too complex ever to be effective. What worked well for
aerospace projects simply didn’t translate to more prosaic enterprises. People working
in matrix teams seemed unable to negotiate satisfactorily over resource issues and cost
allocations and individual team members and their managers couldn’t agree where
responsibility should lie. As a result early enthusiasts for the matrix organisation, such
as Citibank, Dow Chemicals and Digital Equipment began to revert to simpler structures
and the matrix has even been blamed by some for Xerox’s decline in the 1980s.
However, the matrix concept still had validity. Some business thinkers may have
quickly consigned the matrix to history but according to research by David Gobeli and
Erik Larsen (1986) the matrix was still the most popular structure for product
developers. The world was speeding up, not slowing down, and an organisation’s ability
to draw on the competence of the whole workforce was more pressing than ever. So
the question still remained, how could it be achieved?
By the 1990s the language had changed and the business issue was seen to be about
being nimble. The New York Times in 1991 declared: “Battleship IBM is trying to
become a fleet of nimble destroyers”, a headline which reminded observers that the
challenge was still firmly focused on how to get beyond hierarchy and how to get
people in multi-disciplinary teams to work together effectively.
One shining example of an entrepreneur who did much to show that matrix
management could work was David Kelley, whose company David Kelley Design (DKD)
later grew into IDEO, and who is a champion for the idea of taking ideas from “concept
to the customer”. As an example of matrix management IDEO is unique. It has been
described as chaotic, frenzied, energetic, playful and intuitive but what characterises it
is the way in which everyone comes together to brainstorm their ideas at the beginning
of every project. The keys to the IDEO culture are fast invention led by commercial
considerations and cross-fertilisation combined with people’s desire to learn.
In Liberation Management Tom Peters talks about his experience with David Kelley
which illuminates how matrix management can work: “Reporting relationships are no
big deal I was told repeatedly. It’s normal for a project manager to be working for one
of his subordinate team members who’s leading another project. Who works for whom
is mostly unclear, mostly irrelevant. ‘My boss is my subordinate is my boss’ one
designer told me with a s hrug. That’s organisation for you.”
In this context matrix management is more a frame of mind rather than a structure.
The goal for those who want more of this entrepreneurial energy is to build a matrix of
corporate values and priorities in the minds of managers and let them make the
judgments and negotiate the deals that make the strategy pay off.
2
Validation
It may have been that matrix management was a head of its time. In the 1970s and
1980s captive markets allowed organisations to flourish even with rigid structures.
Today everyone is lean and mean. Hierarchies are unwieldy and flat structures with
team based operations are seen as essential to service delivery. In a world driven by
who can get to market first and who can respond flexibly to customer need there is a
sense that matrix structures fit far more comfortably with current reality.
Leaders are developing the requisite skills too. In matrix structures leaders need to be
influencers, facilitators and persuaders and many leadership development programmes
are emphasising the new attitudes, skills and behaviours required in order to be able to
lead effectively.
Of course the issue of who wields the power is still an obstacle in matrix structures,
especially when there are conflicting interests at stake, but in companies with less
spare resource but increasingly urgent deadlines the matrix promises the best option
for many project and product development initiatives.
Meanwhile different forms of the matrix have emerged:
4 The weak matrix. In this case a project manager oversees staff from different
functions but still reports in to his or her functional manager. Such a structuring of the
project allows some engagement of those with a stake in the project and enhances the
possibility for communication across functional areas - but it is still hierarchical and for
this reason retains most of the problems associated with a functional organisation.
4 The strong matrix – In the strong matrix the project manager is independent of
functional management. Indeed in this model it is the role of functional managers to
support the project by providing technical expertise and assigning resources as and
when required. Of course in this structure there is potential for conflict between the
project manager and the functional manager over resource assignment and cost
allocation - as a result excellent communication, strong relationships and a flexible
working culture are required.
4 The balanced matrix – In this example power and accountability are shared equally
by the project manager and the functional managers concerned. This ‘ideal’ model was
the one most commonly tried out in the early days of matrix management but power
sharing is tricky and emotional resilience on the part of all concerned is essential. Not
surprisingly it is considered that this is the most difficult system to maintain.
Dissemination
The concept of matrix organisations is still evolving and is being driven relentlessly by
the knowledge economy. Some of the forms in which matrix management manifest
itself have other names:
•
The ad-hoc project team typically works in a matrix design. Members often belong
to different functions but are loaned out to work for a period of time according to
the project need.
•
The virtual team is a structure typically based around a project goal or a service
solution. Relationships within the team are the primary method of gaining support
and leadership is the responsibility of each individual. Effective communication in
such a structure is critical.
•
The cross-functional team comprises a group of people with different functional
skills working towards a common goal. Such teams may well be project teams,
gathering information, making decisions and generating support from
stakeholders to achieve their objective.
•
The self-directed team is a team that is empowered to take decisions and actions
to resolve day to day issues. Self directed teams may comprise people within one
function or across functions but they are driven more by initiative rather than
corporate directive.
3
•
The multicultural team typically drawn from people from different countries to
combine their expertise for a given project. This team may take many different
forms depending on purpose and objectives.
This is by no means an exhaustive list but, rather, highlights how the matrix is evolving.
As a distinct term, matrix management may not be in common usage, but the reality
the matrix is more pervasive than ever.
Further reading
Richard E. Anderson, Matrix redux - matrix management, Business Horizons. Nov-Dec
1994.
Paul Evans, Managing the Global Company, The Financial Times Handbook of
Management, Pitman Publishing. (1995)
Jay R. Galbraith, Matrix organization designs: How to combine functional and project
forms", Business Horizons 17(1):29-40 (February 1971)
William C Goggin, How the multidimensional structure works at Dow Corning, Harvard
Business Review, (1974)
Henry Mintzberg, 1979, The Structuring of Organizations. Prentice -Hall,
Englewood Cliffs, NJ.
Tom Peters (1992), Liberation Management, Macmillan
4