Understanding Matrix Management: How It Works and Its Benefits

CoachHub · 11 May 2021 · 7 min read

The benefits of matrix organization within a company are numerous and include increased responsiveness, autonomy, organizational flexibility or productivity.

However, matrix management or organization is not easy for leaders and it can be tricky to deploy in some corporate cultures.

A vector of stress and tension, it sometimes increases management workload while unsettling and destabilizing employees, which is the last thing any manager or employee wants.

In this setting, is it even possible for managers to regain control for the benefit of all? What are the pros and cons of a matrix organization?

1. What is an organization matrix?

The first matrix management structure example was developed by Boeing in the 1950s. This matrix management structure offered a necessary response to a production that was becoming more and more complex and demanding. The employees selected were assigned to a specialized function (engine, wings, landing gear, etc.) and to a division (the Boeing 727, the Boeing 737, etc.).

Since its inception in the late 1950s, the matrix organization has been determined to break down workplace silos. The aim was to disperse the hierarchy of the company for better use of its human resources and, ultimately, to improve performance management. This is based in particular on the principle that the workers on the ground are sometimes the best able to judge the situation experienced and therefore to make the necessary decisions for the good of the organization, without waiting for the go-ahead from the executive management.

To do this, a matrix management company is based on a principle of duality, both in terms of control and management. The structure of the company is thus done according to a double hierarchical form.

  • an operational hierarchy: specialization of operational employees concentrated in the same division
  • a functional hierarchy: employees having a support role (quality, human resources, accounting, management, etc.)
  • The activity is also broken down according to two criteria: function and project. Thus, each employee has two hierarchical superiors: a project manager depending on the activity and a permanent manager.

This organization of matrix structures then contrasts with the traditional model, which is based on a single hierarchical operation. With the globalization that took place in the early 1990s, this type of matrix organization then spread widely in international firms, who saw it as a means of developing their flexibility. In opposition to the classic vertical hierarchy, this horizontal structure has also proven to be particularly suited to the systems of “project mode” companies that have multidisciplinary teams that can be modified according to the files carried out.

A. What are the advantages of a matrix management structure?

A liberated company can, thanks to the matrix organization, draw on various skills from current teams to constitute structural units with specific objectives to be achieved. This organizational form, therefore, allows better translation of skills. The employees exchange as much on their knowledge and know-how as on their good practices. Together, they find new solutions adapted to the functioning of the team structure in order to be more efficient, responsive, consistent and efficient. The matrix organization also promotes creativity, such as taking the initiative and consequently innovation at the core of the company. Finally, employees and managers, doubly involved and benefiting from specialized technical knowledge, are much more motivated.

Among the main advantages of such a structure is the ability to create economies of scale.

It also helps to develop activities in the field of innovation through effective coordination between various complex activities.

The specialization of matrix management roles and responsibilities also allows the concentration of technical capacities in the same division and reduces the need for information.

Coordination and expertise are provided respectively by project managers and functional services.

In terms of hierarchical relationships, direct contact between executives and various managers facilitates internal company communication and managers are more involved in strategic decision-making.

B. What are the problems with matrix management?

This hierarchical organization, at first glance ideal, nevertheless features some drawbacks, in common with many HR trends. One of the points of crystallization of tensions is this double hierarchy which nevertheless contributes to its success. Employees do not have one project manager, but several. As with all management trends, this HR innovation management is not without problems, mainly when hierarchical superiors issue contradictory orders.

In fact, transversal communication is no small task either. If it is poorly constructed or non-existent, it can generate misunderstandings, conflicts, stress, and discomfort in the workplace. In this instance, instead of enabling ideas and decision-making, the matrix management structure will hinder processes.

Indeed, it is not uncommon for those in charge, unable to reach an agreement, to slow down the processes. Moreover, since managers oversee the same subordinates, contrasts tend to multiply and create discord. The employees, troubled, no longer know which boss to consult. The risk is that employees will become unsettled and confused, accompanied by an increase in their disengagement.

The division of decision-making powers can lead to its dilution and the dilution of priorities, as well as problems of effective management of staff.

The number of employees and their specializations is more expensive for the company, making it difficult to replace them if they are unavailable.

Exchanges between groups of projects are more difficult and less frequent, resulting in slowness in decision-making.

Large companies, whose activities are decentralized, will therefore find it difficult to adopt a matrix structure. A small company or a start-up may benefit from a holacracy as you can work with high levels of workplace diversity in terms of skill-sets.

2. How to successfully implement a matrix management best practices in your company

To deploy matrix management skills, it is important to understand that the type of organization in which your project will take place will influence it in many ways.

Make sure you understand the context in which you are working.

Take the time to document the spheres of influence in detail, and predict the risks and challenges associated with them.

In tricky contexts, an adapted communication plan and associated risk management will make all the difference when implementing a matrix organizational structure.

If you feel that a matrix organizational setup is right for your business, here are a few more suggestions that will increase the likelihood of success. Follow these tips to optimize the efficacy of a matrix structure in your company:

  • Make sure employees understand who is the main reporting manager via clear communication
  • Establish objectives and targets for each project and share with everyone involved – managers and the team
  • Keep communicating with project managers at each stage, ensuring everyone is kept up to speed on the progress of the project
  • Provide training on matrix organization and/or neuromanagement to all stakeholders, along with mandatory diversity and inclusion training
  • Don’t wait for conflicts to escalate but deal with them as soon as they arise
  • Make sure that managers/ team leaders share the workload equally to lessen perceptions of unfairness and to enable effective use of power

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3. Managerial coaching to support change and enable matrix management best practices

The role of the manager

The manager is faced with a triple challenge:

  • supervise and manage employees while creating ownership in the common project
  • manage employees over whom they have no hierarchical power
  • work together with peers, including female leadership, which leads to agreeing on decision-making.

4. Coaching of managers

However motivated, managers will inevitably fail if they work on their own or are toxic managers. Therefore, they must be accompanied to learn and master the skills that will allow them to carry out their missions.

Training and coaching are proven solutions, enabling managers and leaders to:

  • deepen awareness about non-violent communication
  • enhance listening skills
  • improve remote management – more important during these Covid-times than ever.
  • motivate colleagues and employees by using inspirational language
  • learn how to delegate – this is one of the most essential skills to learn in Matrix organization. If managers take on too much of the workload, they risk becoming overworked.

When working with colleagues, managers must be involved with important communications but must also be able to assert themselves when necessary and take the lead in the interests of the firm.

Matrix management is a methodology that has become more fashionable after decades out of the limelight, as it is proven to boost efficiency and productivity. Nonetheless, the matrix management structure is not enough to guarantee success. Knowledge of the associated management styles is just as essential!

Matrix organization, a conclusion

A matrix organization is a model of hierarchical structuring that has proven itself in the company in terms of productivity and organization. However, the key to success does not come down to structuring the organization by project. The associated management method is just as important. To benefit from the real benefits of these types of organizational structures, over the long term, it is therefore essential to ensure that managers know how to communicate, manage their emotions and that they can make decisions in the future in the interest of the company. Agile project management is therefore strongly recommended as well as other initiatives such as diversity management and frugal innovation.

CoachHub can help you set up a matrix organization and advise you whether it would be the solution for your company. We are experts in remote, virtual and hybrid working, agile project management and matrix leadership. We have a team of expert advisors committed to providing high-quality information, who are there to help your business prepare to meet the challenges of this century, such as embracing a digital culture, encouraging diversity in the workplace and managing remote employees.

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