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Why Restructuring Fails

The Old Approach to Restructuring

Today’s organizations operate in two dimensions, but most restructuring efforts are focused primarily on the vertical dimension. Given that alignment is needed cross-functionally versus functionally, this approach often results in chaos and confusion in the aftermath of the restructure.

Why? We’re glad you asked.

Moving Boxes Around on the Org Chart Doesn’t Work

When the org chart is the only map you have of the organization, then that’s where you go to fix the problem. When you are dealing with only one dimension, the vertical, which is what an org chart depicts, you can align around only one thing at a time.

—Lisa

Re-Org Chart

One common approach to restructuring a matrix involves moving boxes around on the organizational chart. Add a few, remove a few, re-align them to another function, change the players, add dual reporting relationships, dotted line relationships, and so on and so forth. This is vertically-focused restructuring and it doesn’t work for matrix organizations.

Although there may be some incremental improvements, “moving boxes” around frequently fails to solve the problems that the restructure was intended to address. It just substitutes new problems for the old ones.

The Old Problems…

Become New Problems…

Align functional groups with lines of businessTeam members realign around a new boss’ goals
Create cross-functional cooperation between groupsReplace one silo with another
Enable leaders to lead cross-functional teamsTeam members become caught between two leaders with competing priorities

Why We Focus on the Horizontal Dimension

The vertical dimension is where resources are housed and where capacity and capability are managed. It’s where people are trained and allocated to project and process teams, technology is managed, and standards are created and upheld.

The horizontal dimension of a matrix aligns with the external customers, the reason an organization exists. It is the dimension of customers and suppliers, products and services, business processes, and projects. It’s where the work gets done to produce the products and services.

The Vertical Must Support the Horizontal

In a two-dimensional organization, the horizontal (functional) dimension is most important, since the products and services are what generate income for the organization. The vertical dimension must support the horizontal to ensure there is enough capacity and capability to execute the work. A successful matrix structure depends on the strength of the intersection between the two dimensions.

In order to optimize your matrix organization, align with and satisfy customers, and execute multiple strategic plans effectively and efficiently, you must focus on optimizing the horizontal dimension. Therefore, you need to operationalize the horizontal structure first and then set up the vertical dimension to support it. For many, this is a paradigm shift that involves a new understanding of management operating systems and a new set of rules.

No One Said It Would Be Easy

Let’s face it. Restructuring is hard, and the path is often rutted with potholes that can paralyze even your best efforts; leaders who aren’t on board, demoralized employees, and confusion and chaos.

You may need to update a number of pivotal management systems that focus on productivity, prioritization, and accountability. Our approach to structuring a matrix is designed to develop your leadership team’s understanding and commitment to the organizational changes needed to successfully operationalize a matrix.