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Matrix Management Wiki

1C. A Hybrid VM 1.0 Operating System: Matrix Management 1.0

  • 1C1. In the late 1970s and 1980s, organizations began to recognize the need to create cross-functional integration.
    • 1C1i. Cross-functional integration is the pulling together of different segments of the organization into a cohesive team.
      • 1C1ia. A segment is a group of parts that fit together (like the individual products within a portfolio of products).
      • 1C1ib. The components of a segment are called its elements. The elements of a product would include technical development, the process for making it, product customer service, product marketing, etc.
    • 1C1ii. In VM 1.0, the elements of a segment are managed separately, ignoring the interdependencies. The result is a loss of integration of all the segments into a whole.
  • 1C2. The response to the need for cross-functional integration resulted in a modification of the VM 1.0 OS that was called “Matrix Management” but was a system based on the same paradigm as VM 1.0.
    • 1C2i. This system is called the Matrix Management 1.0 OS, or just MM 1.0.
  • 1C3. MM 1.0 is not suited to managing a two-dimensional organization. The problems that MM 1.0 was supposed to resolve, but did not, include:
    • 1C3i. Problem: Cross-functional leaders, such as project or product leaders, didn’t have the authority they needed in order to lead teams of people that didn’t report to them. (In VM 1.0, only the bosses have authority. A boss in VM 1.0 is a person who has one or more direct reports reporting to her.)
      • 1C3ia. MM 1.0 Solution: Create dual reporting relationships so that team members working in cross-functional teams report to two bosses: the team leader and the “real” boss.
      • 1C3ib. Reason It Didn’t Work: The value of using authority is that there is one person with the final say. There is no final say with multiple bosses. In addition, in VM 1.0/MM 1.0 all the power resides in the vertical function, with the boss, whose only accountability is to the function. As a result, functional direction and priorities take priority over cross-functional direction and priorities. This puts the team member in a tug-of-war between the boss and the cross-functional leader, with the boss as the winner.
    • 1C3ii. Problem: There was a lack of alignment around customers. In the 1990s, organizations realized they needed to focus and align with external customers, as opposed to aligning and focusing vertically around functional objectives.
      • 1C3iia. MM 1.0 Solution: Create dotted-line relationships to internal customers in an attempt to align directly or indirectly around the external customer.
      • 1C3iib. Reason It Didn’t Work: It created basically the same problem as dual reporting. As long as the vertical function is king, with goals being set vertically and accountability and performance management vertically focused, there is no power in the cross-functional dimension.
    • 1C3iii. Problem: There is a lack of alignment between centralized functions, such as HR and Finance, and business units. Business units have problems in VM 1.0 because, in that OS, they need authority to operate, and the centralized functions that affect the business don’t report to them, creating problems of alignment.
      • 1C3iiia. MM 1.0 Solution: Create more dotted-line relationships.
      • 1C3iiib. Reason It Didn’t Work: Same as IC3iib.
    • 1C3iv. Problem: Managing large cross-functional initiatives requires full-time teams for a temporary period of time.
      • 1C3iva. MM 1.0 Solution: One MM 1.0 solution was to reorganize and create a formal group that managed initiatives. This created what in MM 1.0 is called a formal matrix. (See Section 1C3v below.)
      • 1C3ivb. Reason It Didn’t Work: The organization would have to be restructured in order to reassign people to full-time teams. When the initiative was completed, the organization would need to be restructured again, or the team would either be idle waiting for the next initiative, or be assigned a new initiative which may or may not have been a good fit for the skills embodied by the team.
    • 1C3v. A formal matrix is an MM 1.0 invention, in which a vertical function is created in order to manage a cross-functional segment; for example, a product management group. The product managers have accountability for a product without having authority over the people who create, sell, market, service, etc., the product.
      • 1C3va. The main problem with the formal matrix is that the management system of VM 1.0/MM 1.0 does not support cross-functional cooperation.
    • 1C3vi. An informal matrix is one which operates like the formal matrix without having a permanent (part of the organizational structure) vertical unit dedicated to the cross-functional integration of a segment. For example, when a project leader from within a function assembles a team drawn from a variety of different functions, the organization is operating as an informal matrix. One of the main problems in an informal matrix is the inability in VM 1.0/MM 1.0 for the team leader to lead without authority.
  • 1C4. Vertical Management 1.0 and its hybrid MM 1.0 cannot deal with the needs of today’s highly complex organizations, as those OSs are based on an obsolete paradigm of vertical power and authority. Any attempt to create cross-functional integration using VM 1.0 or MM 1.0 is a patchwork solution at best.