Understanding matrix management
The business world is always in a state of change, but most businesses still have a traditional management structure, with CEO or managing director at the top, a layer of directors below, then managers and other employees.
However, according to Michael Doolin, Group Managing Director of Clover HR, the traditional top-down structure may slow certain companies down when responding to changing market conditions. "SMEs are in a great position to adopt more flexible organisational structures because they aren’t weighed down by all these processes and structures,” he says.
The matrix organisational structure is an alternative to the traditional hierarchy, with people reporting to more than one manager depending on the nature of their work. It is a modern approach to organisational structure that may lead to improved collaboration, innovation and flexibility.
How does matrix management work?
Matrix management organisations have two or more reporting structures for their employees. Typically, a matrix organisation allows team members to report to both a departmental manager and to one or more process, product or project managers. Here’s how this might look in practice:
Assign a permanent departmental manager
In a matrix organisation, team members will be assigned a primary manager for their department, which could follow the traditional organisational hierarchy. For example, a web developer might report to the general IT manager. The IT manager might report to the operations manager or the finance director. Ultimately, at the top of the chain is the CEO or company managing director.
Assign additional managers on specific projects
Using the above example, the web developer may be working in a team that is building a new e-commerce website. For this work, they report to the head of marketing, and a project manager running this project. If the e-commerce website is for a specific region, they could also report to a geographic manager or team leader.
Collaborate
The matrix works by allowing the web developer to liaise with different managers for different purposes. The team becomes more collaborative and benefits from the skills of all the people involved, rather than just one general IT manager. Done well, this can result in more innovative thinking, faster solutions to problems, and better outcomes for the business.
Advantages of matrix management
Productivity
Matrix management's main advantage is that it brings together leaders from across an organisation to solve problems in better ways, says Doolin. “It allows you to pick the best skills from the organisation for that particular project or product," he says.
"It also helps with visibility and productivity. Everybody is working in the same sandbox, on the same thing, and so things get done quicker.”
When creative agency Syn takes on a new client, the management assembles a creative team based on which skills are required to deliver the contract. This team might include specialists in design, motion and production, but they won’t report only to the creative partners.
“If someone on the team has expertise that’s relevant to the client then they will drive that project and team, and my role is to offer support as needed,” says Paul Birkhead, the company’s creative partner.
In addition, the creative team will report to colleagues from other parts of the company. An account management lead will be assigned to ensure the project is on budget and meeting client KPIs, while a project management team monitors timelines and deliverables.
“We hold regular team check-ins so that everyone is informed and knows that we’re all aligned on that customer project,” says Birkhead. “It’s important to our culture that we aren’t hierarchical, but that isn’t the same as saying there is zero accountability.”
Agility
Building structures where staff report to someone close to a product, project or geographical team means that decisions can be made more quickly, and they’re more likely to be in line with the objectives of the company, Doolin adds: “With a matrix structure you are able to put in place the right labour at the right time, to ensure you can meet deliverables much more quickly than with a traditional hierarchy.”
Visibility
Another advantage of building a matrix structure is that information sharing can be improved. With multiple leaders checking in on products or project teams, there is likely to be better visibility, particularly if companies adopt standard communication processes, and utilise digital project management and communication tools.
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Disadvantages of matrix management
Accountability risks
The most significant risk of a matrix management structure is that the business does not have appropriate governance or accountability. When people are reporting their work to multiple managers from multiple departments, the risk that something is forgotten or overlooked will increase, and accountability can be difficult when multiple decision-makers are involved.
“Without the right governance upfront you can end up with delays, budget overruns and procrastination,” says Doolin.
Employee opposition
Some managers who are used to a more traditional organisational structure may find working in a flatter, more agile team structure a challenge. Organisations need to consider how they will win hearts and minds when creating a new structure and style of leadership.
Types of matrix management
Matrix management doesn't always look exactly the same. The exact type of matrix management that is adopted by an organisation will depend on its culture and priorities, says Doolin. "How exactly you implement matrix management will depend on things like the company's culture and the need for innovation," he says. "You'll tend to find a weak matrix where there is a need for strong governance and processes, but a stronger matrix where there is a need for more innovation, and a greater acceptance of risk."
Matrix teams will almost always have a departmental manager and one or more project or process managers – the question is, who is in charge? Your organisational matrix may fall into one of the following categories:
Weak
In a ‘weak’ matrix organisation, the project manager has relatively little decision-making power, while the department head has authority.
This approach is very common when established organisations try to implement a matrix model, because established managers do not want to give up authority to project managers. The potential problem is that the project manager understands the project, but does not have authority over things like budget, or resource allocation. To avoid this issue, it’s important to build strong communication between project and departmental managers.
Balanced
In a balanced matrix, the project and departmental leads share authority and people report to both managers. This allows work to continue effectively and communication to happen.
Strong
In a strong matrix, the project manager has the most decision-making power, while departmental managers have limited authority. This should create a strong project team where the project manager has full oversight of the project, while the departmental head oversees work without getting involved in decisions.
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Which businesses use matrix management?
Changing your organisational structure can become more challenging if your business has been established for many years, since you probably have established ways of working.
That's why matrix management is most often seen in start-up companies and fast-moving industries such as technology and creative services, says Doolin. But that's not to say that other companies can't benefit from a matrix management structure.
“What we often see in more mature organisations is they spin out divisions or teams that will operate from the start in a matrix structure,” he says. "These teams can benefit from the flexibility of matrix structures and the enhanced collaboration, without the challenge of trying to change the way that the entire organisation works."
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