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“Cracking the Matrix Code”
Jason Burchardt
Aquinas College
Graduate Management Programs
MG 540: Organizational Theory
Dr. Schuler
December 18, 2012
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Cracking the Matrix Code
Background
Company X (“the Company”) is a rapidly growing publicly traded company with
annual revenues nearing eight billion USD, approximately 19,000 employees and
operations spanning the globe. The growth is driven by a strong R&D pipeline and a
healthy corporate appetite for mergers and acquisitions. The organization estimates
receiving FDA approval for approximately 30 new products in fiscal year 2013,
compared with approximately 25 in fiscal year 2012. Additionally, they have acquired
eleven new entities in the previous three years with three being outside of the United
States.
Historically the Company has utilized a hybrid of a traditional hierarchal and a
complex matrix structure that created a state of confusion and angst with many
employees. In 2011 they announced a full integration of the matrix with no explanation
for the organizational purpose of the change. The organizational change has left many
employees, both newly acquired and veterans, asking for clarity and further
understanding of the change. This paper will attempt to decipher the matrix black box
and provide guidance for employees attempting to assimilate into the Company.
Literature Review
See annotated bibliography
Methods
Informal discussions were held with five employees spanning tenure and
position. None of the employees interviewed were certain when the hybrid matrix was
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initially introduced, nor did they remember any communication or training with the
organizational change. The longer tenured individuals noted that it just kind of changed
with many people not really knowing it had occurred. Others with less time stated that it
has been a hybrid until recently and it appears the organization has no common vision.
All employees interviewed noted the matrix was very complex and confusing.
The perceived criteria for success within a matrix focused around cross
functional collaboration, adequate resourcing, transparent communication and proper
alignment with policies, incentives and executive leadership. Additionally, it was
mentioned that the company is stuck in a transitional phase and that the correct skill
sets may not fully exist today.
Results
A matrix structure is defined by dual reporting lines, cross departmental
pollination and ambiguity. When combined with poor implementation and change
management the results can be culturally catastrophic leaving employees wondering
who their “real” bosses are and what they have to do to succeed in a culture they do not
fully understand. This is the current state of wonder plaguing many employees, both
long-term and recently acquired, within the Company.
The research shows that successful matrix organizations have the following key
characteristics: strong executive support, alignment of policies and incentives, high
levels of transparency and communication and an empowered middle-management
team making routine business decisions. To drive this cultural change and employee
understanding a campaign should be launched at educating all employees on the matrix
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structure and the business purpose for the change. A presentation was developed to
help educate employees on the nuances of matrix structure within the Company.
A comprehensive review should be performed of management level employees
to ensure they possess the necessary skills to be a leader in a matrix. Where these
skills are not present, coaches and mentors should be assigned to help develop the
necessary skills including the ability to influence others without hierarchal authority, how
to cope with ambiguity and change, how to identify and develop others, effective
communication and cross function collaboration. If these attempts are not successful,
the company must act swiftly to remove the individual from a position of authority and/or
from the organization to avoid further damage to the integration.
Limitations/Summary
Further research should be conducted on the cultural influence on the matrix
structure for the represented cultures within Perrigo, and potential new acquisitions.
Additional research and interviews should be conducted to determine the historical
context of when and why the Company decided to embrace a matrix structure.
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Annotated Bibliography
Cassidy, Cathy. "The New Matrix Management - the Future of Organizational
Success." HR Management. Issue 3. October 16, 2011.
The author delves into the leadership approach engulfed in the belief that accomplishments are
achieved through authority. Conversely, successful leadership in a matrix organization is achieved
through goal alignment, collaboration, communication both horizontally and vertically.
Galbraith, Jay R. "Designing Matrix Organizations that Actually Work: How
IBM, Procter & Gamble and Others Design for Success." Jossey-Bass. 2009.
The author hypothesizes that the belief that matrix structures do not work is a misconception and sates
that it is not the matrix that fails, rather management failing to properly implement it. The defining
aspect of the matrix is the dual reporting structure which can lead to confusion, yet when appropriately
implemented can yield a high level of collaboration and transparency. Large organizations such as P&G,
BMW and Boeing have successfully implemented the matrix through properly planned change
management and alignment of policies and incentives.
Gorkindale, Gill. "Lost in Matrix Management". Harvard Business Review.
HBR Blog Network. June 4, 2008.
The author highlights the frustration executives experience within matrix organizations. The cited
frustrations range from the lack of clarity about reporting relationships to confusion over
accountability. The 1970’s saw the rise of matrix organizations in an effort to address cross-functional
business needs. As the matrix grew in popularity, so did the confusion and conflicts. Further
complications included increased organizational complexities, globalization, and overall global financial
and economic challenges. The theory states that the organization should focus on developing its people
in the areas of communication, influencing, coaching, negotiation and conflict management.
Gottlieb, Marvin R. "The Matrix Organization Reloaded." Praeger
Publishers. 2007.
The author states an organization's culture provides the core structure and stability and defines the
company and what it stands for. A matrix however, focuses on innovation, continuous improvement,
agility and is established to serve a customer or supplier, not the individual. Many organizations
embrace the matrix haphazardly without the appropriate communication and change management.
The resulting failure is not a result of the matrix, rather a byproduct of poor execution.
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Gunn, Ronald A. "Prescription for the Dual-Hatted Role in the Matrix
Organization: Aggressive Training and Coaching." Matrix Management
Success: Method, Not Magic. Infinity Publishing, 2007.
The author reviews the dual-hatted role in a matrix environment. The dual-hatted role is one where an
individual is simultaneously a vertical and horizontal leader. When a dual-hatted role exists, it should be
for a finite period of time, if it is not able to be avoided altogether. Reasons for avoiding include:
eliminating confusion, maximizing synergies, eliminating the feeling of loss of status, power, and
control. The organization should provide aggressive training and coaching.
*Henson, Ray. "Making Matrix Management Work." www.centerod.com 2009.
The author describes the use of matrix management as a way of addressing the challenge of balancing
functional work groups with other organizational groupings (i.e. geography, customer groups, product
groups, etc.). The error most leaders and organizations made with respect to the use of a
matrix was that it required a different way of leading and managing. The author argues that most
companies did not lay the proper groundwork for the matrix to be successful. The biggest driver in
organizations for a matrix environment is the use of teams. Business trends towards teams and matrix
environments to be more nimble, to get diverse populations to work together and to eliminate
hierarchy. The author offers four techniques to improve performance in a matrix environment: (1)
define roles and responsibilities, (2) agreement on goals and metrics, (3) ground rules on resource
allocation and communications, and (4) determine the process for performing evaluations
and awarding rewards.
*Martin, Paula K. "Matrix Management Reinvented: Smashing the Functional
Barriers to Managing Business Processes." Jobfunctions.bnet.com 2003.
This article defined the goal of matrix management as one where the processes are aligned around
customers and suppliers. The author states that there is no way to reorganize the structure toward
more efficiency; that it only redesigns the vertical dimension - the who reports to whom
factor. The author further states that you can't optimize both the vertical and the horizontal at the
same time; that it has to be one or the other. The horizontal has to be the priority and the vertical
alignment has to serve the horizontal. The author defines seven keys to successfully do so;
( ). Business process alignment, (2) Goal alignment, (3) Project alignment, (4) Accountability alignment,
(5) Collaborative , (6) Standardization of management processes, and (7) Role alignment.
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Morrison, J.M., Brown, C.J., and Smith, E.v.d.M. "The Impact of Organizational Culture on Project
Management in Matrix Organizations." South African Journal of Business Management.
Vol. 39, Issue 4: 27-36. 2008.
The authors studied 29 organizations in South Africa in an attempt to correlate project management
success with the organizational / cultural structure. The results showed a direct correlation between
successful project management within organizations fully integrating the matrix culture and suggesting
that an organizational structure may influence the firm’s success in organizations.
Snyder, Susan. "What Makes The Matrix Work". The HayGroup 2012.
This research indicates that strong implementation and execution will not be sufficient. Leaders will
need to continue to become stronger coaches, visionaries, temper their innate desire to make all critical
decisions, embrace virtual teams and take customer service (both internal and external) to the next
level. A weak matrix deployment can be offset by strong matrix leadership and vice versa so people may
be the determining factor of success.
*Sy, Thomas. "Challenges and Strategies of Matrix Organizations." Human
Resource Planning 28.1 www.boozallen.com.
The author performed a statistical analysis using several data sources to identify the top five issues or
undesirable effects of a matrix organization. These were identified as (1) misaligned goals, (2) unclear
roles and responsibilities, (3) ambiguous authority, (4) lack of a matrix guardian, and (5) silo-focused
employees. The matrix encourages many traits that support a global organization, such as innovation,
speed and nimble size. The downsides to a matrix are complexity, lack of predictability and
conflict. The study conducted by the author suggests that top-level managers face different downsides
and complexities in a matrix than mid-level managers.
Wellman, Jerry. "Leadership Behaviors in Matrix Environments". Project Management Journal. 38
no2: 62-74. Je 2007.
The author theorizes that successful leaders within a matrix structure empower their managers through
coaching and mentoring, not through direction and orders. The research suggests that the key to
success lies in adequate resourcing, a continuous flow of communication both vertically and
horizontally, routine decisions being pushed to the middle management level and alignment of goals
and incentives. When implemented appropriately, the matrix is fast paced and highly collaborative
providing exposure and learning opportunities that traditional hierarchal roles may never yield.
*-Sourced with permission from Karen Guzicki, December 2011, and reviewed and
validated by Jason Burchardt December 2012.
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APPENDIX A - PRESENTATION
Cracking The Matrix Code
Jason Burchardt
Today’s Journey
• Historical Perspective
• Matrix Theory
• Matrix Success
Historical Perspective
See the
Speck?
P e rrigo M atrix
Historical Context
• The Company founded 100 years ago
• Over 19,000 employees in 10 countries
• Rapid growth thru R&D and acquisition
– 30 new product launches FY’13 (over 25 FY’12)
– 11 acquisitions in 3 years (3 International)
– Revenue FY’08 ~$4B & FY’12 ~$8B
– Most acquisitions are closely held entrepreneurial
Historical Context
• Broad executive base
– From over 30 years to less than 1 year
• Matrix fully implemented 2011
– Previously hybrid matrix / traditional hierarchical
• Confusion exists with new & existing EE’s
• Constant state of integration
Matrix Theory
MATRIX
Matrix Structure Overview
• Originated in 1950’s & took off in 1970’s
• ABB, Boeing, BMW, IBM & P&G embrace a matrix
• All employees have 2 bosses – direct boss at corporate /
functional level & indirect boss at product / project level
• May be difficult for traditional hierarchal minded people
• Horizontal (product) line drives priority while vertical supports
• Policies and incentives must all align and support the matrix
• Drives creativity & employee growth thru project level
collaboration (e.g., exposure to items not normally seen)
Matrix Structure Overview – cont’d
Drives high degree of collaboration and transparency
Resource intensive & high level of meetings & communication
Routine tasks can be inefficient
Routine project decisions pushed to project manager level
Projects move rapidly when properly empowered
Requires leadership alignment and empowerment of middlemanagement
• Ambiguity is a fact of life!
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Matrix Success
MATRIX
Criteria For Success
• As a leader:
– “Organizational structures do not fail; managements fail at
implementing them correctly” (Galbraith 2009)
– Power does not rule, influence and relationships do!
– Communication is critical
– Empower your managers through mentoring not bossing
– Create an environment of transparency across organization
– Ensure your projects are cross-functional
– Develop and promote collaborators not individual
contributors
– Can’t optimize the horizontal and vertical at the same time
Criteria For Success – cont’d
• As an employee:
– Communication is critical
– Listen, understand and then act and influence
– Fully participate in project teams, even when it is inconvenient
– learning and development is occurring
– Each project is an opportunity to learn and grow
– Embrace ambiguity as the antithesis to “the norm”
– Be sensitive to the rapid change occurring
– Understand your own strengths and weaknesses
QUESTIONS?