Unravelling the Complexity of the Matrix Organisation

Increasing market complexity and customer sophistication, as well as expansion into high-growth markets, are driving the need for matrix organisations. But it can be challenging to navigate an organisation with multiple reporting lines, which can sometimes lead to misaligned priorities.

Matt Chapman, CEO of The Chapman Consulting Group discusses how to unravel the complexity of the matrix organisation and keep the customer at the centre with Stella Strazdas, Worldwide Vice President, Human Resources at Johnson & Johnson.

The rise of the matrix

As marketplaces grow more global and customers more sophisticated, so too do the pressures they place on businesses to provide continuous value through differentiated innovation and relevant go-to-market models. Added to this is the ever-evolving stakeholder base that ultimately influences how products and service are created and brought to market.

If your organisation develops medical devices, for example, your customer is no longer solely the surgeon or the physician. Your customers are a complex set of interdependent bodies–the traditional surgeons and healthcare systems, but also governments, regulatory agencies, and in some markets large purchasing organisation for accounts healthcare providers–all of whom become stakeholders in the healthcare market with some shared and some conflicting priorities.

To cope with these different–and sometimes competing–priorities of such a diverse customer and stakeholder base, more organisations evolve into a matrix structure where reporting lines are dotted and crossover functional boundaries, effectively blurring the manager/direct-report relationship. By de-siloing these traditional reporting lines, organisations are able to respond to market demands faster and optimise its expertise across similar portfolios and customer.

HR’s role in the matrix

Matrices aren’t new–the first organisations to formally adopt some type of matrix structure was in the mid 70’s–yet organisations continue to grapple with the complexity of managing within the matrix because it introduces indirect lines of authority and promotes shared accountabilities.

Success in the matrix organisation requires a different style. Organisations must learn to establish future-oriented shared goals with clear metrics, provide an environment of open and constant communications, and create a strong focus on team effectiveness. Employees must learn to maintain an external focus on the organisation’s value to its evolving customers and markets while becoming adept at project management and planning, and proficient at working with their peers as well as other leaders from different parts of the business and sometimes in different geographies.

“HR must be able to discuss the strategic value of the breadth of the organisation in the context of the local market,” says Stella Strazdas, Worldwide Vice President, Human Resources at Johnson & Johnson. “The value of the matrix is in understanding its necessity. There’s no longer just one primary customer like it was for most organisations.”

HR becomes the champion of the shared purpose–the common goal that unites the matrix. “We have to train our managers, as well as our employees to be solutions focused. Gone are the days where we segregate around a single product. We need business leaders who can lead in a region or a country on behalf of a function, and not the other way around,” Strazdas says.

Strazdas believes HR’s true value is in the conversations with the business around establishing highly strategic groups who create a unique value within a marketplace across business units or functions while simultaneously helping them to create standardisation when necessary to leverage internal processes.

“I see HR providing a lot of value around helping the organisation learn to manage efficiencies through standardisation when its necessary whilst at the same time executing the global business strategy.”

Overcoming the challenges of the matrix structure

There are many reasons why some organisations struggle to succeed with a matrix structure. Poor communication, lack of clear goals, and ambiguous or competing priorities are often touted as some of the main ones.

“I think it’s harder to appreciate the benefits of the matrix the farther you’re away from headquarters,” Strazdas says. “But there are definitely ways you can mitigate these challenges, and I see that’s where HR can help. We’re the enablers of the organisation. We help to create uniformity around processes, systems, and platforms to drive efficiencies so that the business leaders, the regional and global leaders can focus on delivering solutions that provide value for the customers. As an organisation, we have to be focused, relevant, and agile. And ultimately this is why the matrix organisation exists.”

3 steps towards success

• Goal alignment — planning is important to establish a shared purpose. Goals should be highly efficiency driven yet flexible enough to respond to external market changes.
• Shared accountability — a matrix organisation allows for shared success as well as shared failure. If goals are aligned then the accountability is shared amongst all those involved. Individual responsibilities might be different, but each employee is working towards a shared purpose and is interdependent on one another’s success.Open communication — for a matrix organisation to work, feedback is critical.
• Open communication — for a matrix organisation to work, feedback is critical. When there are competing priorities or shifting external market pressures, it’s imperative to have open lines of communication so that business leaders and employees can partner to realign their goals and set better expectations.

As more organisations evolve to a matrix structure to allow for easier expansion into high-growth markets while leveraging existing business knowledge and efficiencies, the more flexible management and HR will become in navigating the various informal yet necessary reporting relationship to achieve a shared success. And this will ultimately lead to a more agile and robust organisation.