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The New Matrix Management

The New Matrix Management

How’s your organization functioning? Every organization, whether formally or informally, is a matrix. Matrix management is more than an organizational and reporting structure, and management happens in more than one dimension. In a matrix, changes must be made at all levels of the organization, not just the vertical level, to achieve organizational success.

The Story of an Organizational Quandary

Arnold Meyer, Director of Financial Technology

Arnold Mayer has just been promoted to lead the Financial Technology department which is responsible for developing and maintaining the applications that are used in accounting and finance. He had 25 years programming experience within the broader technology group and had always gotten his people to do what he needed.

The department Arnold inherited had been struggling. The goals and objectives of the prior year had not been met. Employees were confused about which projects to work on first. Some teams were working long hours into the nights, while other teams were sitting idle. Clients were frustrated because they were not receiving the support they needed.

He grew up in the school of management that believes managers must have control over the people that work for them and that authority is required to get things done. When Arnold arrived in Financial Technology, he decided his managers needed more authority in order to make the cross-functional business model work, so he reorganized the department so that employees within each of the teams reported to the two managers that needed to get work from them. The result:  Project managers reported to the PM Head and either the Application Development (AD) Manager or Programming Manager. Programmers reported to the Programming and Client Service (CS) Manager. CS representatives reported to the CS Manager and the Client.

Arnold created a new organizational chart and informed his employees that they now reported to two managers. Assuming this would solve the departmental problems, he sent the teams off to do their work.

Mark Jones, Human Resources Technology

Mark Jones also received a promotion about the same time as Arnold Mayer. Mark was assigned to head up the Human Resources Technology department which had been suffering from exactly the same issues as Arnold’s department. Mark also had 25 years of experience though none of it was in technology. Mark’s first action was to bring together his management team to get their thoughts on why things were not working. “Can anyone tell me who our customers are and how our organization is structured to support them?” he asked the team.  John Blake responded, “We don’t have enough authority to get the job done. As you can see from the organizational chart, I am in charge of application development; under me, I have two team leaders, four programmers, and an assistant. Now…”

Before John could continue, Mark interrupted. “John, I can see from the organizational chart who reports to whom and I hear your concern about authority, but I’d like to get a better understanding about how the work actually gets done.”

He continued. “Let’s start with the organization as a whole. This organizational chart represents our boss/subordinate relationships, but are there any charts that represent the customer/supplier relationships?” The group looked at her and shook their heads no. “Ok, next question. Do we have a map of all our business processes?’ No one nods and they all have a look of confusion on their faces.

“Alright, one final question. Do we have a strategic plan for our department? And, do you know what our goals and objectives are for this year?” This time everyone in the group smiled and Lisa Banks, head of the Client Services group responded, “Actually, I work with our clients to get a list of projects from them for the year. Then, I let the programmers and application developers know what will be coming down the pipe. Each team develops their goals and objectives from the list to make sure that all the clients’ needs are met.”

Mark sat back and contemplated the group’s responses. It was obvious that the group had the desire to satisfy the customer but it was clear, based on their responses that their ability to do so was being sub-optimized because of the way they were organized. Over the next few weeks, he spent time with the leadership team and drew the horizontal relationship charts that represented how they interact with their customers and suppliers. He had them identify goals and objectives for the entire department versus just their individual groups and made the entire team accountable for achieving those goals. He also made sure each person understood that even if they met their own department’s goals and objectives if as a team they failed to meet the departmental goals, then they have failed as well.

Then he created a business process and project management steering council, on which the managers and client leaders sat. He asked each council to create team goals and objectives. Only then did she expect the teams to be able to successfully fulfill the strategic plan.

Who’s Thriving and Who Isn’t?

At the end of that first year, both managers met with the CEO to review their progress. Arnold’s department was still struggling. Two managers had resigned and the teams were working long hours. The leaders of the client divisions continually complained about late deliverables. Although employees knew who they ‘worked’ for and who gave them a performance review, they did not know which project was a priority. In the end, half the goals and objectives for the year had not been met.

Mark’s department, on the other hand, was thriving. His management team understood what it was to have shared goals and met often to review their progress. The clients of the department sat on the steering councils and often worked with the technology group to make sure that all the goals and objectives were being met. Since both departments were focused on achieving the organizational goals of Human Resources they found a way to work together, negotiate, reallocate resources and set priorities that optimized the entire business. Employees now knew who they ‘worked’ for, knew who their customers were (internal to the department or external) and were informed of the priorities for each of their assignments. By the end of the year, over 95% of the goals and objectives for the year had been met.

The CEO did not understand what had happened. Both managers had similar organizations. Budgets were comparable and neither had more or less resources than the other. So how could one group be so much more successful than the other? Both managers understood the cross-functional nature of their businesses. Both managers knew they had multiple clients to support. But, only one manager knew that using the New Matrix Management would help achieve the department’s goals and objectives. The CEO decided he needed to find out what this Matrix Management 2.0™ was all about.

The Old vs. the New Matrix Management

Matrix management is not a new concept. Since the 1970’s organizations have known that there was a need to find new ways of handling the cross-functional or horizontal needs in a vertically aligned organization. They assumed that in order to get work done you needed authority and control and so the dual-reporting structure was created that assigned one person to two bosses who could exercise authority over him. This was the wrong solution to a real problem and as a result, the old matrix management fell into disfavor in the 1980’s. The old matrix management maintained the central idea that authority was needed to get things done and continued to focus on the vertical dimension – the dimension of reporting relationships.

What we have learned in the twenty years or so since the demise of the old matrix model is that to be successful we need to manage in multiple dimensions: horizontally where we align and optimize business processes and projects that serve the customer, and vertically, where we manage the resources that are then deployed to the horizontal arena. We also learned that you do not need authority in order to get work done, but you do need alignment. These are two of the key principles of the new matrix management.

Implementing the New Matrix Management

In order to be successful, Matrix Management 2.0™ requires the implementation of the elements of matrix management:

  1. Horizontal Maps – Horizontal maps represent the crucial pieces of the organization, the “how we do the job”, “who has accountability” and the “support required and provided to manage each process from start to finish.” These are needed for each business process and need to include the customer/supplier relationships both within the process and between processes, the products produced, the owner of each process and the composition of the steering council that oversees the process.
  2. Steering Councils – Governance in the horizontal dimension is done through horizontally based councils instead of vertically aligned staff meetings. Councils start at the top with a Strategic Steering Council and then cascade down through the organization with a council to oversee each cross-functional horizontal segment. Each council is led by a segment owner and is comprised of the leaders who participate in that segment.
  3. Shared & Individual Goals – In order to ensure that leaders within the councils work together, the goals of each steering council are shared by council members and all the members are held accountable for these goals. In addition, these shared goals are decomposed into individual goals which members are also held accountable for.
  4. Proactive Accountability – Instead of using reactive accountability, based on the requirement that the person accountable have authority or control, proactive accountability asks people to make something happen instead of looking for whom to blame when things don’t happen as planned. This proactive accountability does not require authority in order to get things done and supports individual and organizational learning versus covering your backside and risking aversive behavior.
  5. A Project System – There are only two ways that work gets done: through projects or business processes. Everything that is new or improved is a project. Therefore, the strategic plan is no more than a portfolio of projects and it needs to be managed as such. A project system starts at the top with a Project Steering Council whose job is to oversee the portfolio of projects in the organization, includes a resource allocation process that allocates no more than 100% of people’s capacity to do project and business process work and requires project oversight by a project sponsor, whose job is to make sure direction is set, resources are allocated, and obstacles are removed so the project leader can be successful.
  6. Business Process Management – Business processes must be managed, otherwise, they degrade. Like the project steering council, a business process council is led by an owner and is comprised of the business process leaders who oversee functions. It is the job of each business process steering council to oversee the operation of its business process and ensure that process performance is maintained. The council identifies when improvements or redesign (reengineering) needs to be done, which then become projects.
  7. Team-Based Methods – Most management is done by teams. Because of this, teams need common methodologies they can use to get the work done, together. Examples are project management, group decision making, and problem-solving methods. Regardless of which method is chosen, all need to foster team participation and cooperation which give leaders have the ability to promote understanding, ownership, and buy-in.  Since most team members don’t ‘report’ to the team leader, we can not rely on authority as the basis for getting work done and must be replaced with collaborative, team-based methodologies that promote team success.

Cathy Cassidy

As the Managing Director of the International Matrix Management Institute, Cathy helps organizations and practitioners adopt the skills and methods they need to succeed in today’s complex, dynamic environment. She is a Matrix Management 2.0™ Master Consultant and the author of several books on matrix management, including her most recent publication, Managing Projects in a Matrix. She is a key contributor to the Matrix Management 2.0™ Body of Knowledge, co-developer of the Matrix Management 2.0™ organizational operating system, and a lead developer for the company.