Matrix Structure? 3 good reasons NOT to!







If you are working in a large company today, chances are the matrix structure is not alien to you.

Most large firms swear by it and are split along brand, product or vertical lines with the underlying functional organization underneath it. This sounds very sensible as different teams are geared towards a common goal. However if you are a smaller firm trying to compete in the same markets, the matrix may not be for you. This is why I think so.

  1. It takes too long to get things done as consensus needs to be reached

Multiple teams need to agree on a common goal so this could take a while to materialize. Meanwhile the opportunity may have shifted. So if you don’t have a dominant position in the market and a stranglehold on your customers, you may not afford the waiting and internal delays in decision making and market actions. This could frustrate some of your top performers who may feel bogged down by not being able to ‘just do it’! I frequently see this when talking to senior candidates from matrix organizations as its always to tough to figure as to actually ‘whodunit’!

  1. People are often confused about who is responsible and accountable

Divided responsibility and accountability are often a result leading to no one standing up to be counted. In case of a failure, its tough to assign blame and in the case of success, everyone takes the credit. This can lead to internal turf wars and blame games. Rewards and reprimands are tough to pin down at employee appraisals. Reporting hierarchies are blurred too. While it’s a more democratic setup, the organizations DNA and reward structure must be equally aligned to it and most younger organizations cant afford this..

  1. It is expensive to maintain all the bureaucracy to manage it

As functional lines blur into a focus around a brand, product or vertical, someone has to keep score not just at those levels but also in functional terms viz. sales, delivery, support teams and individuals assigned from these to the different brand or product line. Sales people on the field, for instance, handling a territory, have to cater to multiple targets across products for that geography rather than just overall revenue numbers. If Product A’s target for that region falls short while Product B’s exceeds it, its not good enough even if you have met your overall numbers. It adds to the training and mentoring needs so that the average front-end sales person knows each of these products he carries well enough to sell. Accounting for overlay targets also needs some back office resources!

This blog can and should raise some nods and some hackles as a matrix structure is not all bad as it might appear from the flow so far. It all depends where you are as an organization. So it’s more just a word of caution for smaller, agile, newer companies who are competing with the 800 pound gorillas in their markets to not jump on the matrix bandwagon too early in the game. While it may be seductive and keeping up with the Joneses, it might actually slow you down in the market and increase your management costs, neither of which you might be able to afford at this stage.

I welcome your views, good or bad, here and your own experiences in being part of such an organization now or in the past as all of us can be learn from it.


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