As organizations look to do more with fewer resources and better leverage scarce knowledge across their entire organization, they have found that the traditional hierarchical management structure no longer meets the needs of the business. Enterprises have turned to the matrix organizational structure for increased flow of information across departments and greater flexibility and responsiveness.
But the change involves more than just rearranging names on an org chart. The multiple reporting lines and overlapping responsibilities can lead to chaos and confusion unless you change the way you think about your role as a leader and develop the skills necessary to take advantage of what the matrix has to offer.
What is Matrix Management?
The traditional management model has a hierarchal structure. It is modeled after the military, and control of the business is centralized. Everyone working for the business follows the chain of command and knows where they fit in the organizational chart. As an employee in this type of organization, you know exactly who you report to and which team you are responsible for managing.
Advantages to this structure are that strategic decision-making can be done quickly, and managers have a lot of control over decisions in the organization. The disadvantage is that hierarchical organizations move slowly, discourage creativity, and have trouble adapting to changing market conditions.
A matrix structure has two chains of command. One is the traditional hierarchy, and the other is a lateral authority or influence. The traditional hierarchy runs along functional lines, while the other deals more with individual projects.
An easy way to visualize the difference is the traditional organization can be represented with a tree chart, where each employee connects to leaders above and their team below and at the top.
A matrix organization is best represented by a table to represent two dimensions of leadership in the organization, though some enterprises may have more dimensions. In the matrix, the strict chain of command is broken up. Employees will report directly to two or more managers.
There are many ways enterprises choose to define a matrix structure. Common dimensions include product and function, where one dimension of management is responsible for a specific project or product the company is working on, and the other dimension is the company department, like sales, accounting, or customer service.
Other possible dimensions include geographical location and industry specialty. Many enterprises have a hybrid structure where a traditional hierarchical structure is used for top leadership, and the matrix is used elsewhere in the organization.
The Benefits of a Matrix Organization
There are several advantages to a matrix organizational structure, including:
Collaboration Between Departments
A major benefit of a matrix organization is its ability to bring together the best people with the right skills to accomplish the current task. Experts in every functional part of the company can work together to address a project, challenge, or goal. In a matrix structure, project assignments are never permanent. This gives employees the ability to share their skills with a wider variety of peers.
By uniting the functional focus and the focus on a specific project, companies can better keep up with the needs of the market. When team members report to multiple departments, there are more perspectives available when making decisions. The matrix structure also gives teams more autonomy, removes the barriers of more formal processes, and allows them to deliver on their goals quickly.
Better Communication Between Departments
In a hierarchical structure, communication flows from the top down, and often these communications remain within their own functional unit. A VP of a product communicates to project managers, who then communicate with software developers. The matrix structure allows for communication across these boundaries, giving leaders the ability to make better-informed decisions.
Efficient Resource Usage
As equipment and employees are shared across projects, the matrix structure allows resources to be used more efficiently. Matrix structures enable project managers to devote their time and talents to particular areas instead of being pulled across many projects, maximizing their influence.
Increased Opportunity for Developing New Skills
In a matrix management structure, employees work across a wide variety of projects, and they often require learning or using new skills. Exposure to new job duties and responsibilities can build their professional skills quicker and increase their value with the company.
Challenges of a Matrix Organization
Every organizational structure comes with challenges, and the matrix is no different. If you’re aware of these challenges, then you will be better prepared to address them.
Lack of Clarity Around Roles
A matrix structure can be harder to wrap your head around than a hierarchical one. When an employee reports to both a functional manager and a project manager and priorities conflict, what does that employee do? When an employee needs more training, which manager is responsible for making that happen?
Mismatched Priorities Impact Business Performance
Whenever there is more than one manager involved, there is a chance that conflicts will arise. A sales manager may set a goal for sales growth in the next quarter, but a project manager could set different priorities for the team. This could result in meetings and discussions where the conflict is resolved, but the team could be stuck in limbo until a final decision is made.
Employee Performance Could Be Harder to Measure
Because the team members in a matrix organization report to more than one manager and could be performing more than one role, it can be hard to gauge an employee’s contribution to a project. This can lead to a lack of motivation and poor personal development.
Keys to Success in a Matrix Organization
There is no question that a matrix structure can offer a significant number of benefits, including more efficient usage of resources and standardization of processes/working practices across different implementations. The challenge is that working in a matrix organization requires new skills and competencies to ensure that the planned benefits of the matrix are realized as intended. To work effectively as a functional resource manager or a project manager in a matrix structure, leaders need:
This can be defined as having a deep understanding of the formal organization (e.g., goals, roles, processes, etc.) and the informal organization (e.g., politics, informal processes, power, etc.) and applying that knowledge to make all decisions.
A matrix can give you multiple roles in an enterprise and have you answering to more than one person. Knowing the details of how you fit in the matrix will help you take advantage of the opportunities a matrix organization uncovers.
Influence is the capacity to affect the character, development, or behavior of someone or something. Successful influencers execute strategies in a way that achieves positive outcomes and builds or strengthens relationships.
In a hierarchical management structure, you could demand that something needed to be done and assume that it would be handled. In a matrix, you have to learn to lead without authority using social intelligence, character, and collaboration skills.
This can be defined as the ability to understand and control/manage your emotions and reactions. Self-management includes self-awareness, self-regulation, and motivation. To lead well, you must know yourself and understand your management style. You also have to be able to identify gaps in your competency and work on developing skills you may be lacking.
This is the ability to cooperate with others to achieve shared goals. Collaboration involves being flexible, putting the collective needs of the group ahead of your own, and cooperating with others to achieve results positively.
If you come from a hierarchical management background, you have to resist the urge to fall into old patterns. Reach out across the boundaries and take advantage of one of the benefits of matrix management.
Having a customer focus can be defined as making the customer and their satisfaction at the center of all you do.
It’s about making sure that you understand what is important to the customer and working to exceed those expectations to deepen and strengthen the relationship. The matrix organization can add fluidity and collaboration to the enterprise that should be used to benefit your customers.
Empathy involves being able to see things from another person’s perspective, even if you don’t agree with them.
Empathy enables leaders to build a better understanding of their team’s perspective and the mindset of their customers. When priorities in a matrix cross, as they often do, an effective leader needs to approach the conflict from multiple viewpoints.
A Matrix Model Makes Business More Agile — But It Takes Time
The matrix organization structure can make your business more agile, adaptive, and able to adjust to changes quickly, but making it work takes more than just creating a new org chart.
It definitely comes with its share of challenges, but those can be overcome and used to your advantage. Many organizations take the time to put policies and procedures in place to support their matrix environment, but for true success, they should also consider investing in training to build the right skills and competencies for their leaders.
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