3 Golden Rules for Successful Transformation
Matrix Organizational Structure: Love it or Hate it?
Does the matrix you have to work through to get things done drive you crazy? Does it make things difficult or does it drive collaboration and better solutions? Matrix organization structures can make people cringe or act as a way to accelerate decisions and outcomes. Some people tell us they hate the ‘matrix’ as it can create ambiguity and blur the lines of accountability. Others see a matrix as the answer to getting around or even eliminating silos. Regardless of your experience working in a matrix organization, almost everyone has an opinion.
Who do you report to?
“Well on project X, I report to Fred and on my other project I report to Sue, but for my day to day role I report to Sally, who works three States away.”
Sound familiar? With the blending of day to day ‘work’ and involvement in numerous projects, which seem to multiply like weeds, it often feels like everyone seems to report to everyone else.
Traditional Matrix Structures Aren’t Working
The question of organization structure has never been more important. Companies are investing billions in transformation and the old structures just don’t work anymore. Traditional geographic, product, and functional structures fail when your customers need to interact with you across platforms (e.g. phone, web, apps) or when they purchase products and services differently depending on where and what the relationship looks like. They fail when customers demand a flexible experience that acknowledges their value while providing many options of how to interact with you.
When you are implementing a large-scale business or digital transformation, how do you determine how the organization should best be structured. As transformation occurs, some processes are eliminated (or automated), and new ones are created. There may even be a need for entirely new business capabilities to drive unique ways to differentiate in the market.
The old school will tell you to bring in the organization design experts and have them ‘benchmark’ and look at best practices. As if looking at your competition will help! How are you going to deliver differentiation in the market if you run your business just like everyone else? Especially when it interfaces with the rest of your business that is NOT like anyone else. Best practices and benchmarking at best get you to parity if you can execute immediately. At worse, they just don’t fit. Unfortunately, even if you implement these ‘best practices,’ they will be dated by the time they are implemented. If you are comparing yourself to your competition, you are already behind, making it almost impossible to catch up, let alone leapfrog your competition. This is a path to obsolescence.
Today’s organization design must be adaptive and yet resilient. Each wave of internal business transformation threatens existing structure and creates constant change, disruption, and upheaval.
The Matrix Redefined
‘Adaptive’ organizational design is one of the latest concepts being introduced to companies as a solution to today’s constantly changing business environment. While this is an interesting model, it still lacks the flexibility and linkage to a business strategy. Designing an organization is not a matter of picking a model that seems best or looking at your competition and copying what is best for them. A structure needs to be designed to support the business capabilities that are needed to deliver your strategy.
Starting with any predefined structure is akin to taking a hammer from your trusty toolbox and using it to drive in a screw. It will get the job done, but it will make a mess of things … oh and it will have to be redone.
3 Golden Rules for Successful Transformation
We have learned three golden rules from successful business and digital transformation efforts.
- Any change to processes, business model, or your customer experience invariably requires a hard look at your structure to determine how transformation is best leveraged with a different structural model.
- The structures of the past do not work. Looking across the street at your competition will not help you gain a competitive edge.
- To be successful, the organization design must be aligned with the capabilities needed to deliver your strategy. Anything else will result in rework and disruption down the road.
If you are interested in learning more about how to create an adaptive structure that you can be certain will drive your strategy, call us. It’s what we do.
LeaderShift Insights aligns structure, people, and investments to drive strategy.