I’ve been thinking about matrix organizations recently—about the pros and cons of these complex structures and about my experience in one many years ago.
A matrix organization is one in which there are dual reporting structures. In the typical matrix, subject matter specialists—such as finance, human resources, or I/T specialists—report both to management in their specialty and also to management in the line area that they support. Matrix organizations vary in which of the two reporting relationships is direct and which is indirect.
For example, when I was a Human Resources director, I reported directly to the line area and indirectly to the Vice-President of Human Resources. But similar matrix organizations might well choose to have the direct reporting relationship be to the Vice-President of Human Resources, and the indirect reporting to the line area.
Obviously, a matrix reporting structure adds complexity to an organization. Sometimes it is higher cost as well. And employees in the matrix do sometimes get pulled in conflicting directions—when there were differences of opinion between my direct boss and the V-P of HR (who were peers), I and others in my same role in the organization had to exercise a fair amount of diplomacy to work our way through the situation.
So the benefits of the structure must outweigh these disadvantages. What are the benefits? Here are the main advantages I see:
1. Better service to the business
When HR and other corporate specialists are not aligned with the business units they support, they often develop a rigid silo mentality. Finance specialists do not consider what each division needs to measure for greatest productivity. I/T specialists develop systems in a vacuum. And HR specialists impose performance incentives that do not relate to the work being done.
The conflicts I experienced in the matrix organization where I worked were occurred when the HR division rolled out such initiatives as management training programs and compensation systems that did not work in the part of the corporation where I worked. The challenge I faced was in working with both HR and the line area to adapt the corporate system to what would work in my division. I think our division—and therefore the entire corporation—was better served because of this attention to what was needed and not needed in different work groups.
2. Expertise and flexibility of specialist functions
Although having a group of corporate specialists can develop programs that are extra work in some divisions, they are also able to make world-class expertise available across the corporation. This prevents specialists from becoming stale in what they can offer the company.
Had I been aligned solely with the business, I would not have had the opportunity to work with as many HR specialists and learn as much about my area of expertise. The matrix permitted our corporation to have more HR specialists who could develop more leading-edge programs that we could take across various divisions. Not every program worked everywhere (as explained in the preceding section), but we were still better off for having tried a variety of new things.
A recent Wall Street Journal article stated that improvements in military trauma care are limited in part because
“no single general is in charge of battlefield medicine. Combat commanders—infantrymen, artillery officers and others with no medical training—are in charge of medical personnel on the front lines.”
In other words, if there were a matrix organization giving a medical professional oversight of all battlefield medicine, in addition to the combat commanders, trauma care might improve.
3. Better development of specialists
I acquired better HR knowledge faster by working in a matrix organization than I would have working by myself in the line division. I gained a broader perspective on the organization from seeing how other HR specialists worked in their divisions, and I saw my particular division at a deeper level than I would have if I had worked only in HR.
I also learned better “managing-up” skills than I would have in a siloed organization. By having to serve two masters, I learned tact and persuasion. I also learned to find my allies and how to predict when I might face an exploding grenade. Sometimes I could even prevent the grenades from landing.
As one article stated, “Organization structure should always follow strategy.” Where integration across divisions is important for corporate strategy, then a matrix organization makes sense. Just be aware of the pros and cons when choosing this complexity.
Moreover, it is important to keep in mind that every organization is designed perfectly to get the result it gets. The reporting structures and matrix relationships will impact organizational results. According to Jay Galbraith, strategy, structure, processes, rewards, and people all need to be aligned to successfully implement a matrix organization.
For good information on matrix organizations, see
- “Revisiting the Matrix Organization,” by Michael Bazigos and Jim Harter, McKinsey Quarterly, January 2016
- Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble, and Others Design for Success, by Jay R. Galbraith (Jossey-Bass 2008)
- Making the Matrix Work: How Matrix Managers Engage People and Cut Through Complexity, by Kevan Hall (Nicholas Brealey 2013)
What is your experience with matrix organizations?