When it comes to designing and implementing a fully successful matrix organization, the old adage of “in for a dime, in for a dollar” comes to mind. Changes in organizational structure are not to be taken lightly.  Structural changes have enormous consequences for organizations and the people who labor in them. Everyone has the same question, “what am I supposed to do differently?” Answering this question in a definitive way that mines the considerable benefits of matrix management – and builds both competence and confidence –  takes time and deliberate effort. 

Implementation of structural change cannot nor need not take forever.  Indeed, the more systematic your approach to making these changes, the better off you will be. Progress can be and should be rapid. As our articles, Matrix Management: Method, Not Magic and Five Not-So-Easy Pieces of Matrix Management explain in more detail, effective matrix management requires planning, clarification of roles, and supportive training for standing up the matrix organization and occasionally refreshing employees at all levels as to roles, rules, tools, and the winning behaviors required for success.

A “launch-and-abandon” approach to designing, implementing or even refining your matrix organization is a formula for disappointment. Planning, persistence and follow-through are essential. By launch and abandon, we mean any major initiative announced by senior management and then left to its own devices with little or no additional investment or reinforcement.

These are hyper times. These are difficult times. Everywhere I look, I see employees striving harder than ever before to be part of the solution rather than part of the problem. Employees are energized, gravitating rapidly in synch with the direction that the organization seems to be moving – with the speed akin to moths moving towards a new light source.

Given the environment in which we find ourselves, it becomes all the more critical that our decisions and actions – particularly those related to structure – be sure-footed and first-time-final.  While some might argue that flavors of the month were affordable during those Halcyon days of greater resource abundance, there can be little doubt that such dalliances are no longer affordable today.

If you are in pursuit of the considerable benefits that matrix management can provide, e.g., better goal focus, customer focus, improved capacity utilization, synergy, organizational creativity and the like, then you are definitely “in for a dime, in for a dollar.”

If you are in the mood for a flavor of the month, matrix management is not the right flavor for you.

The Washington Post reported on February 13, 2010, that the “Toyota Way” was derailed in part because the company had thinned its ranks of expert mentors. The article quoted Susan Helper, a professor of economics at Case Western University in Cleveland, as follows: “So much of what made the company work well was that each manager was personally trained by a mentor who himself had long experience with the company.  When the fast expansion came, Toyota was very short of senior managers who were ready to become mentors.”

Whether you are dealing with explosive growth, constricted staffing, or simply the changing of the guard as a new generation replenishes the ranks, the Toyota story is instructive: Mentoring is not an HR frill to be dismissed lightly. Indeed, as the Toyota example demonstrates, sufficient high-quality mentoring is the make-or-break difference in ensuring continuity of quality and productivity as well as pivotal values and norms. Those who have brought success to an enterprise can and should pass the torch to those who will bring future success after the mentors have moved on. Effective mentoring is the passing of this torch of success–a torch that is not passed by accident or raw luck.

It takes several years to ramp up a quality mentoring program with an adequate stable of capable mentors. This cannot be done overnight. No mentoring “miracle-grow” exists. Fancy electronics won’t get it done either.

Mentoring is a long-term investment intended to yield long-term benefits and as such, it conflicts with day-to-day operating imperatives. Long-range initiatives are trumped regularly by the emergencies of the day. Those of us in the training business often hear “there is no good time for training.” This logic suggests that there is no good time for mentoring either. That said, ask Toyota if there is a good time for failing.

Once your mentoring program has developed momentum, it is essential that it be maintained adequately. This means ensuring that new mentors are cultivated and that legacy mentors are refreshed periodically. In addition, once target mentor-mentee ratios have been established for the workforce, an enterprise must ensure that these ratios are maintained properly.

We don’t know if quantitative and qualitative indicators of mentoring were Balanced Scorecard dashboard items at Toyota, but we surmise that Toyota now wishes that it had paid more attention to the maintenance of a mentoring program that was once the envy of its industry. “Short-Term Bottom-Line Fast Buck Freddy” companies don’t and won’t make the long-term investment that quality mentoring requires, but “Built to Last” companies will.

To ignore mentoring is to ignore the long-term interests of your stakeholders. Today’s choices surrounding mentoring are your strategic future. The strategic future is now.

A frequent and appropriate concern in strategic planning is whether the resources needed to fund the plan are available: Is our financial plan adequately supportive of our strategic plan? Another concern is whether the human capital needed to implement the plan will be on-board and ready to go: Stated differently, is our workforce planning aligned with our strategic planning? (The financial plan and the workforce plan should be components of the strategic plan, either in the main body or as annexes).

There’s a push-pull between the development of a strategic plan and available financial and human resources. On the one hand, strategic planning which simply assumes the resource status quo can become constrained and unimaginative, tending to recite the way things are rather than the way things should be. On the other hand, a pie-in-the-sky plan quickly degenerates into a bookshelf ornament, breeding cynicism at best and fear-and-loathing at worst.

Achieving consensus concerning our resource assumptions allows us to create a workable strategic plan—doable by “stretching” ourselves to implement it. But would you want a strategic plan that wasn’t ambitious? You may be lucky and have the financial and human resources needed to create an ideal strategic plan right from the start, but most of us do ambitious strategic planning with the proviso that the plan will need to be adjusted iteratively in view of real financial and human resource constraints. Getting this right is a balancing act: Oddly, we must sometimes put the cart before the horse for a time before we can correctly position the cart after the horse. This process may need to be repeated once or twice until goodness of fit among all plan components has been achieved.

A comprehensive strategic plan aligns strategy with both systems and structure, organized solidly around vision, mission, goals and objectives. Systems refer not only to electronic systems but to defined core processes. Structure refers not only to the organizational configuration of talent, but also to needed capabilities and capacities.  Capabilities are the skill sets and talent competency levels needed to implement the plan and perform the work. Capacities are the required amount of a given capability at relevant levels of mastery, expressed in person-hours or person-years. Correct specification of capabilities and capacities is central to effective workforce planning.

Effective workforce planning answers this pivotal question: If the strategic plan expresses what we intend to accomplish, then what is the mix of present and future talent that will be required to implement the plan and how will this mix be cultivated? Peter Drucker said it best, “Plans are nothing until they degenerate into work.” 

If we are going to have a plan, then we’d best have the talent needed to implement it successfully. Otherwise, a strategic plan without a workforce plan could end up being just a cart without a horse.
 

Cross-functional teams operating in a matrix-managed environment can deliver enormous synergy across participating disciplines which results in many significant benefits. This is true not only in R&D organizations but also in a wider, more diverse set of enterprises, such as engineering and construction management, government and more.

Benefits resulting from achieving valuable synergy include but are not limited to:

1. Greater efficiency and productivity. Essentially there are golden possibilities for eliminating rework because each discipline learns to anticipate the needs and preferences of another discipline for the work that is being delivered to the other
2. Discovery Breakthroughs. Much of what constitutes “discovery” in almost any field of endeavor represents a reconfiguration of components that existed previously but had not been assembled together in a particular way. When disciplines have the opportunity to mix and match their work products together in novel ways, discovery breakthroughs can result. The hastening of such breakthroughs is best accomplished by those who are closest to the work, laboring together in a cross-functional team setting.
3. Widening of Comfort Zones. When members of different disciplines work closely together, organizational defense mechanisms are disarmed as trust builds. This widens comfort zones and builds esprit de corps—esprit de corps that has immediately usefulness, but which also expands future agility.  Experienced team members who have participated previously in cross-functional efforts that have shattered barriers can be reconfigured for new projects or purposes with learning curves that are less steep. These team members will also evidence diminished resistance to change as new teams go through the stages of team development, e.g., form-storm- norm-perform.

In addition to lateral, cross-functional benefits, there are also important benefits for each of the participating vertical functions. One of these benefits is what I call “disease control,” meaning that a functional problem that is being evidenced on one cross-functional team may also be apparent on one or more other functional teams. Early knowledge of such problems permits the function to either fix or prevent the difficulty systemwide. Another benefit relates to priority-setting, where a helicopter view of all matrix teams’ needs for the services of a particular function permits proper allocation of available resources. This helicopter view also permits the discipline to identify and develop its future capabilities consistent with a clear-eyed view of emerging needs and team preferences.

Synergy is golden and the employee with a synergistic mindset is more valuable than an employee who lacks synergistic skills and behaviors. Success in mining for gold presupposes that you know where to look. This blog entry isn’t the full “treasure map” but I hope that it sends you off towards True North.

What about the "dual-hatted role" in a matrix organization? This is a situation where a professional is assigned both vertical leadership as well as horizontal leadership responsibilities.

Short answer, bad idea.

It may be used on a very brief and temporary basis because of a talent shortage provided that thorough justification has been provided. In those instances where a dual-hatted role is approved for temporary use, it must be with the provision that another individual will be cultivated quickly to assume one of the two roles. Exceptions could be a short-term project, a truly extraordinary financial or geographic constraint, or a discipline specialty so rare that it would be folly to invest in developing bench strength in that particular functional subspecialty.

Why does all this matter?

1. Potential confusion. Staff and management get confused about the exact role that the dual-hatted individual playing: Is s/he making a decision based on project or goal imperatives or on the basis of functional perspective? In extreme cases, this can escalate into staff confusion about whether the company is serious about implementing matrix management or whether it is reverting to its old pre-matrix ways.
2. Dilution of synergy. Project Managers need to maximize synergy among functions to execute the project. Gaining and exercising a multi-disciplinary perspective is critical to success, but if we embed the Project Manager further into his/her native discipline in the dual-hatted capacity; we weaken cultivation of a seamless, synergistic project management viewpoint.
3. Fear of loss of status. One source of resistance to matrix management is the sensation of a loss of status, power, and control to which some managers may cling. They once made all decisions—horizontal and vertical—relative to their work and employees. Now they must collaborate and consult with others. This is real change; it takes them out of their legacy comfort zones. Some will seek escape routes wherever they can find or invent them. These managers are actually gaining power in the matrix organization but it takes a while for them to figure that out. Top management enforcement of new matrix roles is critical to reaching the tipping point of real change and releasing the real power of the modern matrix organization.

Even worse, the dual-hatted role can sometimes degenerate into a proposition where some individuals are granted special license to live by the roles and rules of the pre-matrix organization, to some extent exempt from the overarching matrix proposition of "pursuing shared objectives using shared resources."  If such arrangements catch fire, you can bet real money that the impetus to get designated as a "dual-hatted" player will snowball as a new indices of status and power.  Next thing you know., you’ll have more and more people clamoring to return to the comfortable roles and patterns of the pre-matrix past, traveling under the canopy of the dual-hatted role.  If enough of this happens, you’ll be left dealing with the unfortunate question of "when is a matrix not a matrix?" or otherwise finding yourself agreeing with the French that "the more things change, the more they remain the same."

Bottom line, avoid the "dual-hatted role" at all costs.  It’s nothing but trouble.

They tell me that a business blogger should offer a personal observation from time to time as a way of introducing oneself and providing a more complete picture of the person who is delivering professional services. So let’s take a crack at it and springboard from today’s activities. One of the things that management consultants have to do is keep their Statement of Corporate Qualifications current. That’s because you are looking for a new job every day. I have been looking for a new job every day for the past quarter century! Anyway, this task involves listing clients and reference contacts, describing assignments and the like. When you are writing a major proposal, it’s only natural that prospects want to know where you have done work before and how they can contact your references to assess client satisfaction with completed projects. I confess that I don’t keep the Statement as current as I should. What with client work involving extensive travel, sometimes international, it gets hard to squeeze in such a task. However, periodically I do get it done and I make sure that every assignment gets posted (except for those governed by Non-Disclosure Agreements).

I was updating the Corporate Qualifications the other day and decided to count the number of clients for which I had done work related to matrix management. Imagine my surprise when I noticed that the January 2010 cumulative total is 50; just for those related to matrix management! A handful of these were here in the Washington DC area, but the vast bulk involved travel.

I recall fondly my first matrix management client. It was Boehringer Mannheim Pharmaceuticals–now Boehringer Ingleheim. This was some two decades ago. The R&D section had a facility up in Gaithersburg, Maryland. Suburban Maryland had an up-and-coming pharma and biotech corridor that’s now pretty well established. The Director of R&D, now retired, was an MD and a former executive at the FDA. As I described my approach to the assignment – it was a matrix organization “tune-up” project for an existing matrix structure, I saw his eyes light up. He said to me, “As a scientist, I must admit that I am both surprised and delighted…you have a structured, systematic approach to all of this.; I feel better already.”

It was through that first assignment that I learned how much I enjoy working with scientific and technical people and intelligent and engaged people, in general. Their personalities tend to be pleasing, or, at minimum, highly interesting. They insist on logical, step-by-step approaches. Boehringer was a great environment in which to “cut my teeth.” Boehringer was the first of many pharma clients. The Director of R&D and later, the COO for the U.S., provided me with many interesting challenges. They did so even though I had a steep learning curve about the industry. Then, as time went by, new industries presented themselves. There was more for me to learn and yet other executives gave me the benefit of the doubt that, indeed, I could learn about the contours of their industry and then apply my templates and knowledge to assist them. Through all of this, I began to see transcendent dynamics which apply to many, if not all industries. I also began to connect the dots and become confident that I could work a particular industry, either because I had worked in that industry before or because it was a “neighbor” that shared common core characteristics with an industry in which I had worked previously.

I am fortunate in having so many smart clients. I have learned something from each and every one of them and that has, in turn, helped me work more effectively with the next client. Along the way, I have made many friends. Sometimes the travel gets a bit much but, all in all, the level of satisfaction involved in helping people get the most out of our consulting and training services along with the opportunity to work with great people and make friends along the way – balances everything out. The job also provides a great deal of variety: There is no boredom. I am grateful for my clients – past, present, and future. I just have to remember to write it all down.

By pausing and investigating the underpinnings of success, both process and human, senior leadership can distribute credit in a way that fortifies the matrix structure by creating conditions favorable to teamwork—past, present, and future.

The matrix organization is comprised of multiple cross-functional teams. The team is the basic building block of the structure. At any given point in time, the behavior of all personnel will either fortify or erode the matrix structure. At the highest level of matrix functioning, all personnel will become appropriately circumspect about whether their behavior is fortifying or eroding the matrix.

Absolutely essential to matrix functioning is an adequate degree of circumspection at the most senior levels of the organization. All members of an organization like to be the one to deliver good news to senior leadership. However, the first “messenger” to trumpet success to a top-level boss may or may not have been instrumental in achieving a given success. Sharp elbows might be indicative of a sharp mind and Herculean effort; sometimes this is the case but sometimes it is not.

When good news is reported to a senior leader, this individual should immediately pause and ask two questions namely, “To what can we attribute our success?” and “To whom can we attribute our success?”

In answer to the first question, the challenge is to identify those cross-functional synergies that were pivotal in achieving a breakthrough.

In answer to the second question, the challenge is to ensure that credit for the success is distributed to and shared among the members of the team which delivered it. The Horizontal Leader and the participating Vertical Leaders are likely to have insights as to any creative, or otherwise disproportional or heroic contributions that should be singled out for special commendation. Most frequently, a small amount of digging will reveal any special achievements that warrant special notice. The heroic contributors are often too busy to sound their own horn. Following this analogy, don’t assume that a vehicle is moving just because it has honked its horn. In addition, it can also be argued that the efforts of each and every team member were required to create an incubator in which synergistic, cross-functional success could be attained. In this sense, senior leadership should distribute both generic as well as particular credit, should particular credit be warranted.

Interdependency is at the root of creative synergy. When it comes to the behavior of senior leadership, little things can and do mean a lot. When senior leadership ensures that both team and individual efforts are recognized and rewarded, the matrix structure is fortified in ways that will reinforce future synergy. The cumulative effects of senior leadership impact the significant benefits which an ever-strengthening matrix culture can deliver.

Remember the operational definition of “culture:” Culture is what employees do when the boss isn’t looking. To the extent that employees perceive and understand that effective teamwork is what will be inspected and rewarded by senior leadership without fail, their behavior will tilt increasingly in the direction of cooperative interdependency. In this way the promised benefits of matrix management can be delivered through multiple cross-functional teams pursuing shared objectives using shared resources.

Just about every business owner or corporation executive who is awake understands that it is far more costly to obtain a new customer than retain an existing one. This concept is even more near and dear to core tenets of running a business—in an uncertain economy.

Here’s the dilemma that consumers witness over and over like a recurring bad dream: Many employees who interact with customers do not understand the importance of customer loyalty to the bottom line of a company. Repeat customers help pay your salary. Fewer repeat customers, more expense required to find new ones… something might need to be cut from the budget… like your salary!

Granted some customers can be difficult; however, when a loyal customer has an issue, the customer service representative needs to be motivated to deal with it effectively AND know how to create a win-win resolution.

Consider this example: A customer takes his out-of-warranty vehicle for a routine oil change, and is told at the end of that service that the vehicle has a slow leak that needs to be addressed in the near future. Cost for this “recommended repair”—as written on invoice—is $1100. The customer is in shock. Not being a trust-fund baby, he says he needs to sleep on it.

The customer does some research and finds out that part of the problem is that the entire transmission has to be taken out to fix this small leak at a cost of $92/hour plus parts. It appears that since very few of these types of repairs have been made by this service department that the customer is paying, in part, for the staff’s learning curve. Further, upon following up with the service department, the customer is informed that the original quote was incorrect, it is really $1800 to repair the leak and, by the way, “You need a 30,000-mile service which costs an additional $600.” Now the customer has gone from shock to hopping mad. He is ready to leave his vehicle parked outside his house and buy a clunker for the $2400—and put a bumper sticker on the clunker that says “My other car is an X but I cannot afford to drive it.”

How should the dealership’s service department deal with this situation? Here are some options:

1. Make certain that each employee is carefully trained so that when he/she quotes a price for a repair, especially when it is in writing, that it is correct.
2. Stand by any inaccurate price quotes, giving the customer the benefit of the doubt.
3. Charge the customer $1800 for the 30,000-mile service AND the repair of the leak to compensate for the inaccurate quote and encourage repeat business.
4. Tell the customer that they are sorry
5. Ignore the situation entirely

The answers that are more likely to help the dealership keep the customer? Hopefully, you know that they are a combination of 1, 2, and 3 above.

Final thoughts:

• A customer really doesn’t want to hear that someone is sorry for someone misquoting a price. “Sorry,” does not put more money in his/her bank account.
• Make certain that your staff knows what they are doing when they interact with customers. Each person needs to understand the importance of retaining loyal customers to their individual financial livelihood.
• Each employee needs to be given license to ask a manager when they find themselves in deep water rather than risk alienating a loyal customer.

If you and your employees are in tune on the importance of customer retention, you will keep more customers and run a much more profitable business.

Matrix teams can be especially useful as part of a renewal initiative. For a couple of decades, the mantra in organizations has been “we need to break down the silos,” but such renewal initiatives too rarely get past the chanting stage. Matrix teams are cross-functional teams which pursue shared objectives using shared resources. Such teams break down the silos by placing staff drawn from different disciplines shoulder-to-shoulder, either physically and/or virtually, with one another to pursue a common objective.

A constant theme throughout my book, Matrix Management Success: Method Not Magic, is that today’s organizational problems are complex and daunting. The problems are multidisciplinary in nature and multidisciplinary approaches are essential to meeting the challenge—not just at the top of the organization, but also at the middle and at the front-line level.

We would still be waiting for many of the beneficial drugs that make life better today were it not for the use of multi-disciplinary drug development teams by global pharmaceutical companies Beyond the pharmaceutical companies, many other household-name organizations use matrix teams to achieve important benefits, including companies such as ExxonMobil, Boeing, and Parsons Engineering.

Public sector organizations are also using matrix teams to great advantage, including the US Navy Bureau of Medicine, the National Oceanic and Atmospheric Administration, the Food and Drug Administration Center for Radiological Devices, and the Defense Finance and Accounting Service, to name a few. There are some emerging examples of both private and public sector organizations which are linking their matrix teams to the matrix teams of other strategic partners; this is the next frontier in creating breakthrough global networks of organizations that don’t just cooperate on paper, but which also collaborate day-to-day at the working level to get work done. It’s another way to make renewal a viral phenomenon.

Many traditional, vertical hierarchies are simply out of breath as they grapple with multidisciplinary challenges. Vertical organizations are structured perfectly to solve one-dimensional problems but the bad news is that virtually all of the one-dimensional problems in the modern world have already been solved! Squeezing traditional hierarchies harder is not the pathway to progress; you may increase your engine speed RPM, with accompanying employee fatigue and burnout, but the squeeze doesn’t increase your ground speed, to use an automotive analogy. Such approaches lead to head scratching: “How can our employees work so hard and such long days and make so little progress?”

It’s time for organizational structures to catch up to reality. Catching up to reality is one way to describe necessary renewal. Unleashing the power of the horizontal organization using cross-functional matrix teams is a proven way to renew your organization by releasing talent to conquer complexity, increasing speed and agility while ensuring the highest-and-best use of all of your assets.

Cross-functional teams have been around for more than sixty years, but recent improvements in communications and information technology along with increases in employee education and sophistication levels have fueled its wider use. It takes care and due diligence to make them work, but when they work well they are powerhouses of innovation and productivity and a vital pathway to organizational renewal.

The Director of the 2010 Census recently remarked in the Washington Post that he is concerned about the imminent brain drain in the US Bureau of the Census owing to projected retirements. He pondered how this development could impact adversely a 2010 census which promises to be more than a little controversial at best. His solution? The older employees should take 15 minutes to sit down and have coffee with the younger ones to “transfer knowledge.” It begins to make you wonder about the level of compensation afforded to Census executives and managers if the knowledge can be transferred successfully over a cup of coffee, be it tall or grande. Sad. Starbucks will like this “strategy,” but the thoughtful citizen will not.

The passing of the mantle of leadership in American government and business is nigh. Baby Boomers have begun leaving the scene in one way or another but the question is: Are they ensuring that the transfer of knowledge and expertise will be smooth and complete? Too often, it’s being left to “someone else”—the next person “on watch” as it were.

The problem is that most of the time, the next person on watch is the very person who needs to be mentored for the job! Look at public utilities, such as water and wastewater districts and you will usually find the same predicament. The need for making a smooth transition is ubiquitous, yet the level of systematic and concentrated effort is usually paltry. Indeed, if Y2K proved to be a sheep in wolf’s clothing, the passing of the baton to a new generation has the potential to be a wolf in sheep’s clothing.

The Defense Finance and Accounting Service (DFAS) is a 14,000-employee federal agency that performs a vital function—it pays our military heroes, our defense contractors, along with the President and a few other notables. A few years back, then-DFAS Director, Thomas Bloom, was concerned about ensuring uninterrupted performance as the mantle of leadership is passed from one generation to another. Indeed, the leadership demographics were cause for pause. The top leadership team of 20 executives was at or quickly nearing retirement age. Not remarkable on the face of it. However, the average age of the next lower echelon was actually older than the top leadership team! Go down yet another level and the employees were still no younger, on average. This is the condition at many organizations, particularly public organizations where no less than 50% of the employees are retirement-eligible as this is written.

DFAS started working on this challenge in 2001. Tom Bloom certainly wasn’t content with the idea that a couple cups of coffee would do the trick. The agency instituted a mentoring program. Strategic Futures Consulting Group has now trained more than 2500 of the agency’s employees in how to do quality mentoring. Creating an embedded mentoring culture in a large organization takes time—probably a decade, give or take. When it comes to renewing organizations by preparing the workforce adequately, leaving things to chance or leaving things to the next leader won’t do.

The strategic future is now: Organizations should ensure their perpetuity while those who can transfer productive knowledge are still on the payroll, not after they have already departed.

Should we say “if it ain’t broke, don’t fix it,” even when our lying eyes promise us that it is fixin’ to be broke? Today is the time to prepare for tomorrow.