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Matrix redux
Matrix Redux Richard E. Anderson
W
hen I worked m General Electnc's malor appliance business m the mld-1970s, the entire o p e r a n o n converted overmght--bhtzkrmg style--to a "two-boss" I matrix m a n a g e m e n t o r g a m z a n o n structure. In a hghming strike, our secure, top-down, oneboss orgamzanon chart was pulverized, replaced by a "two-boss" structure configured more hke a tic-tac-toe grid than a pyramid Bewilderment p r e v a i l e d - - n o one k n e w where to put the Xs and Os on the new grid And the n m m g of the shockmg a n n o u n c e m e n t was perfect Pearl Harbor Day, 1974 Trad,nonally, the malor apphance orgamzanon operated as a confederanon of independent product-hne dlwsxons, such as refrigerators, ranges, dtshwashers, and so on A product-oriented vice president presided over each dlws~on pyramid, and everyone reported to one boss up the chain of c o m m a n d to the group e x e c u n v e - our top boss Wxth the new structure, the independent divls~ons and powerful vice presidents that everyone looked up to vamshed, casualties of the change The traumatic two-boss matrix structure exchanged our dlvlsxon vice presidents for a new batch of "product managers," p o s m o n e d weirdly d o w n the side of the novel organizanon gnd instead of at the top. This meant that engineers, marketmg people, and other specmhsts, such as myself, contmued to report upward to bosses m our functional specialties But we also reported sideways to a new product-hne boss m charge of refl-lgerators, ranges, and other p r o d u c t s - - m a n a g ing total product reqmrements, from concept to customer, across the various f\mctxonal specmlnes With our rigid mflxtary chain of c o m m a n d blown away, the cultural and pohncal rules based on facing upward disappeared with the c o m -
Don't look now, but the organization fad of the 1970s is on its w a y back.
6
manders Sideways was as important as upwards, and we weren't sure which w a y to face because both bosses shared equal p o w e r over our performance and pay. Although I d~dn't realize it at the nine, the dramanc changes at malor a p p h a n c e s were m step w~th events at other GE businesses, as well as other large corporanons GE's mrcraft engine business operated m a two-boss m a m x long before the changes at malor appliances, and the c o m p a n y ' s me&cal systems business also mstalled two-boss matrtx m a n a g e m e n t m the mid 1970s. MORE THAN A FAD
M
atnx m a n a g e m e n t was in vogue. DowCornmg's worldwide matrix was c h a m p i o n e d by xts chairman m a classic H a r v a r d BuStpless Review amcle m 1974 The hkes of Xerox, Texas Instruments, TRW, and even C~tibank e m p l o y e d two-boss matrtx management. Dxgltal E q m p m e n t Corporanon, under Ken Olsen's gmdance, developed Vax computers and other m n o v a n o n s m a free-form matrix based on reporting to two bosses or even more, depending on the product d e v e l o p m e n t s~tuanon. I n o w k n o w that companies opting for two bosses to run things weren't lUSt lumping on a fad The two-boss o r g a m z a n o n device addressed s o m e major m a n a g e m e n t dilemmas At the core was the classic structural issue concerning centralizanon or decentrahzation of resources to maxml~ze producnvlty of the firm GM and IBM, for mstance, achmved techmcal excellence by centrahzmg a cnncal mass of skills m specmhst funcnons to fashion leading-edge products and services They found that these functions grew narrow, ulnmately serving their o w n "spec~ahst" agendas, thwarting mtegranon and s p e e d y dehvery of products and services through the organization So these two companies and m a n y others formed decentrahzed product-oriented bus> nesses, hke GE's p r e - m a m x malor appliance &vlBt,smess Horizons / November-December 1994
General Form of a Matrix Organization
~
Staff
ns )r
Geographt
ect Groups
,/"
ngmeermg on
O
Task
O
Funct •
Two-]
5ource Harvey F Kolodn.l'. "Managing m a ,I,Iatrlx
"Busmess Horizons, March-Aprd
slons, to achieve integration and serve market needs Forming product groups frequently shortchanges techmcal excellence "Just get it to them on tm~e, we'll fix it m the field" may satisfy a product manager, but it terrorizes functional experts intent on perfecting bells and whistles In addmon, product-hne managers, such as GE's refrigerator and range vice presidents, each wanted his own full-rune set of functional speclahsts. So functions were cloned, spawning a series of tradmonal reporting pyramids throughout the &WSlOnahzed businesses Th~s was an expensive way to utlhze people To solve this ym and yang, Xerox, GE, Digital, and others looked enwously at the accomplisl-mlents of the aerospace program under way m those days The space race pressure to close iVlatnx Redux
1981. p 20
the "mlssxle gap" resolved the people utlhzatlon dilemma w~th a clever mventlon, the two-boss mamx One boss focused on techmcal excellence and o w n e d the speclahsts, the other, hke a general contractor, used the speciahsts as needed and steered the product program through the organization maze to the customer. It was hke hawng your cake and eating it too, Best of all, sphttlng resources reduced costs Expensive spectahsts could be allocated to multiple prolects, avoiding add~tlonal high-cost headcount. Because the specmhsts worked out of functional home bases, they could be redeployed quickly to reconfigure orgamzational resources to meet new customer requirements, without toniplaint Nomad behawor went w~th the matrix territory 7
Delegation to project level experts, w h o k n e w best what was needed, d o w n l o a d e d decisions and reformation processing, alleviating the hierarchical bottleneck caused by everything flowing upward for &rectlon Under matrix management, the horizontal flow of work across the organization was the center of action. Top management could accelerate that flow by staying out of the way and concentrating on strategic ~ssues rather than day-to-day fire fighting across orgamzatlonal lines I left the appliance business in 1977 and later heard that the power-sharing that w o r k e d efficiently for mlssde prolects didn't transfer well to washers and dryers The malor appliance matrtx d e v e l o p e d stress cracks ~ _ _ and failed a few years after it was formed DowCornlng's famous world° "Few would come wide matrix is long gone forward to defend too Many at Xerox called their m a m x a culprit bematrix management, hind the c o m p a n y ' s dea pariah among cline in the 1980s. Matrix was accused of flaunting organization control at Digital; the structures, by the c o m p a n y pulled the plug on matrLx m a n a g e m e n t as middle of the 1980s." a unique way of life mside the corporanon. In 1979 Tom Peters catalogued the growing corporate distaste for matrix inanagement in an article in Business Horizons, and in 1982, along with Bob Waterman, soundly trashed tt a g a l n - - p o l n t lng out that their "excellent" companies would have none of it because it induced anarchy Few would c o m e forward to defend matrix management, a pariah a m o n g orgamzatlon structures, by the middle of the 1980s TEAMS TAKE OVER
time while raising quality and cutting costs using market-driven teams These teams focus on integrating activity laterally across c o m p a n y functions, reducing hierarchy, making critical decisions, and e m p o w e r i n g cross-functional m e m b e r s by buildmg cooperative c o m m i t m e n t a m o n g them M a n y - - p e r h a p s most---of the stories are true Unfortunately, the composition of these e m p o w ered product d e v e l o p m e n t teams is usually not defined The impression is left that these are all "Tiger Teams," staffed with full-time specialists reporting to one team boss, co-located and selfc o n t a m e d - - a replica of the Lockheed "Skunkworks" model Although s o m e do follow this template, most companies have too m a n y innovative products in the pipeline to dedicate speciallStS full-time to each new product d e v e l o p m e n t effort. So prolect bosses must act as general contractors and rime-share needed specialists from their h o m e functions to avoid cloning talented people on every product venture The result: a two-boss matrix. The Team Taurus program had a core of fulltime members, pamcularly from engineering and manufacturing, but other functions such as purchasing, castings, and outside suppliers participated in a matrix C o m p a m e s such as Black & Decker have formed product-line business teams that have a few core m e m b e r s but matrix other resources within the business One large Ford program runs w~th a core team m e m b e r s h i p of only a dozen people, receiving m a m x e d support from about 350 other "team" m e m b e r s in the organizanon. The Foxboro Company, a leading lndusmal controls company, recently formed a dozen business teams to m a n a g e its worldwide product lines The team leader has no staff; all resources are matrixed. Intel Corporation, one of the fastest product developers and a proven world-class competitor, has created its powerful chips relying on a matrix orgamzatlon
D
MATRIX FLOURISHES
oes this mean that smce the mid 1980s c o m p a m e s have returned wholesale to one-boss accountablhty and the traditional pyramid of power? Have corporate organlzanons that seek cross-functional lntegranon been swept into product- or market-oriented strategic business units (SBUs), fully e q u i p p e d with a panoply of dedicated funcnons> Not quite The current m o v e m e n t toward "teams" has generated as much excitement and visibility as "matrix" did in the 1970s The " e m p o w e r e d " new product development team has enthralled the business press and highlighted the auto industry in particular Ford Motor C o m p a n y ' s "Team Taurus" began the accolades, more recently Chrysler's Viper Team has b e e n anointed for its achievements Many other large U.S corporations report alnazmg stories of shcmg product d e v e l o p m e n t 8
I
n 1986, researchers Davld G o b e h and Erlk Larsen reported that matrix was the most popular structure for product developers, three-quarters of the projects studied used a matrLX format They also found that team m e m b e r s favored the matrix arrangement over more tradlnonal one-boss reporting relationships, rating prolects using matrtx m a n a g e m e n t as successful There are several reasons w h y matrix structures are flourishing today under the guise of " e m p o w e r e d teams" or "business teams " The contrast with the fadures of the 1970s reflects the changed business environment. The context facmg aerospace programs in the missile race days centered on stretching goals, tightening schedules, rapidly changing technolBu.smess Horizons / November-December 1994
ogy, and a need for husbanding talented and costly organizational resources Moreover, diverse groups had to be closely integrated to achieve high c o m p o n e n t quahty and product integrity for a d e m a n d i n g customer People w o r k e d as if thmr survival were at stake Matrix m a n a g e m e n t grew out of this environment, and task-oriented, problem-solving professionals flexibly handled the two-boss reporting requirements that went with the matrix w a y of hfe. The work situation was dynamic, hectic, a little crazy (no one ever k n e w exactly w h o m to report to), but professionally rewarding They felt part of something---even " e m p o w e r e d " to produce results Contrast the aerospace milieu with the business environment and internal culture of those days The large corporation that adopted matrix m a n a g e m e n t still enjoyed market d o m i n a n c e in Its domestic environment. Some could administer prices and raise them in unison with "compentors" within their captive domestic markets; strong unions maintained a rigidly structured hourly work force, and products enloyed long life cycles Indeed, NCR didn't change its cash register slgmficantly for 30 years Product renovations could be stacked up to not disturb a dominant design, then rolled out w h e n a major model change finally replaced an aging product line Breakthrough renovations were sought over the long term in centralized corporate research centers. Consumers tolerated shoddy products because worldwide comparison was unavailable Large segments of industry were staid and regulated Internally these companies were dominated by centralized, bureaucratic, functional c o n t r o l - even in decentralized units Functional chimneys of power, striving to meet functional goals and unconcerned with the possible mapact on sister functions or the firm as a whole, were tolerated within the organization Political jockeying and infighting prevailed to preserve turf. Once people made it to the top of the heap, they stayed there Employment and position achieved on the ladder were entitlements Middle managers sought to build "empires," add people reporting to them, expand their budgets, carve out a piece of someone else's territory, and get their lobs reevaluated to m o v e up the hierarchy a notch. Younger managers focused on mobility Staying on a lob more than 18 months was tantamount to fadure Shortterm goals were set, supporting the orientation toward short-term job occupancy and letting the next person worry about the inevitable chickens that came h o m e to roost "Zero defects" ballyhoo substituted for quality Product d e v e l o p m e n t was linear, by functions, thrown "over the wall" to the next function to figure out D e a s l o n s all m o v e d upward, frequently to settle into m-baskets for appropriate aging and political testing Matr,x Redt,x
Is it any w o n d e r that people w h o were emb e d d e d in a functional niche for their whole career did not respond well to the ambiguity of reporting to two bosses? Many lived by thick policy and procedure manuals and were comfortable with cookie-cutter job descriptions. Within this context, matrix m a n a g e m e n t was sprung onto GE's malor appliance business and many other businesses, pasted over the rigid hierarchical structure m place, only to suffer transplant relectlon. A BETrER MATCH--A B E T I ~ R MATRIX
oday's economic environment and corporate cultural transitions match better with matrix requirements. The situation is closer to the space race than the smug, walledcl W mentality of the past Resources are spread thin and must be optimized Competinon is global and fierce C o m p a m e s such as NCR no longer have long product cycles but need to update their electronic offerings every 12 to 18 m o n t h s - or perish The accent Is on fiat, lean team organizanons focused around business processes that cut horizontally across functions, driven by customer satisfaction and product i m p r o v e m e n t A sense of urgency pervades product development, where fast, incremental innovation is a necessity to k e e p tip with rapidly closing windows of opportunity The fadure of matrLx past was c o m p o u n d e d by deploying "pure" or "balanced" matrix management The two bosses were declared "equal" and shared so-called "influence power," meaning that true position p o w e r was up for grabs b e t w e e n the funcnonal boss and "Matrix structures are the product-line flourishing today under manager. This restilted in conflict, the guise of 'empowered delay, and multiteams" or 'business tudes of meetings that a c c o m p h s h e d teams." The contrast with little Only the early the failures of the 1970s organization develo p m e n t (OD) pracnreflects the c h a n g e d noners seemed sansbusiness environment." fled with the mayhem created by p o w e r danghng within the pure matrix To them, organizational effecnveness required donning a corporate hair shirt to search for trust, openness, confrontation, and eventual interpersonal competency. Resolving the p o w e r conflict was only a "tgroup" or "managerial grid" away. Experience has demonstrated and research has confirmed that product managers need more than Informal influence and pohtical skill to be
T
9
effective in a matrLx setting The p o w e r edge belongs to the product-hne leader to a c c o m p a n y accountability for overall results Functions serve the product line, nurture the specialists, and advance the state of the art Instead of glorifying conflict, as was done m the 1970s, firms stress cooperation to avoid arm wrestling over orgamzatlonal resources The balanced matrix of the 1970s was built pnmar, ly on wishful thinking, the balanced matrix form disoriented organizations and led them astray Another slip was the failure to transfer the h e a w w e i g h t program manager to the commercial setting The aerospace program manager has traditionally been a powerful individual m the organization, frequently displaying outstanding leadership skills, viewing program management as a career path--always the acknowledged supreme being withm the aerospace matrix Too many businesses that installed matrix installed p e e w e e prolect managers with low leadership skills and little general management experience They had only a grain of position p o w e r and ended up as go-betweens, with far more respons,bihty on paper than in practice To accompany this semHl~enial prolect role, the prolect manager and the product-hne "team" w e r e never really "empowered", in effect, the hierarchical organization that was supposed to be leavened by the matrix insidiously stayed in place This is how it was at GE's major appliance business Hierarchy did not fade away, although the product-hne managers had visible positions in the hierarchy After the new organization was in place and the matrix should have been workrag, significant decisions were made the way they had always been made :it the top, by the group executive and the group staff Evewone knew it The organization responded accordingly, to the true paths of power and not the ersatz mamx The product-hne managers were astute e n o u g h to avoid drinking the bathv, ater dished ()tit by c o m p a n y recitations of approp,-late nlatnx procedure They knew how the system worked and that it hadn't changed Matrix was dead on arrival---done Ul to a great extent by its own archltects :it the top This v, as not an u n c o m m o n experience at the time EMPOWERMENT REINFORCED
tional business systems driven by chent/server applications provide decision reformation to teams that reinforces the rationale of empowerment This distribution of decentrahzed information is in the early stage of supporting team autonomy in the professional arena, but it is well estabhshed on the shop floor Moreover, implementation of lean production methods has allocated production capablhty to product-hne teams Although resources continue to belong to the manufactunng function, the internal competition for these matrtxed resources is greatly reduced. This resource allocation model has been extended to other functional areas, such as engineering and marketing, thus building tightly woven matnxed teams with considerable clout and flexibility that enloy many of the benefits of dedicated strategic business units while remaining in a matnxed structure In many cases, downsizmg has redticed resources such that companies cannot meet fiveyear growth plans, and ffmds are not avadable to hire additional resources to take tip the slack Still, new products and services need to be developed with diligence to meet competition, and this demands a critical mass of specialists A ffmctlonal home base is the best place to house speciahsts to maxnnlze their learnmg and development, because research and pracncal experience demonstrate that product developers kept contlnuously in a team mode will dissipate the team member's abdity to keep in touch with the state of the art Under the circumstances, this product development "Catch-22" is best resolved with a product-oriented matrix A
s I have indicated, when mat,-lx management was introduced at GE's malor apphance business, it was a show-stopper Matrix mlplementatlon was a hard show to take on the road during the 1970s, with the result that it did not have long engagements in a number of malor corporations Today matre¢ is rarely mentioned in managenlent hterature Companies usmg matrix structures tend to keep mum about it Regardless of what name is attached to it, n-latrix has become the stealth organization of the 1990s, it is there even though not recognized, deln ermg restllts far more effectively in an envn'onment Dr more attuned to its structural pecullarines than in its heyday C1
T
he "empov~ erment" isstie hngers on 111 the current ,ippllcatlon of matrix management in m a n y bus,nesses today Hierarchy is ahve and well and hying in corporate America It ,s not likely to wither away soon Out of necessity, power and decision authority are being shared with cmss-f\mctional matrtxed teams because competitive advantage depends on that sharing For instance, reenglneered cross-func-
Richard E. Anderson is a principal with Kendall Consulting Associates, Cambridge, Massachusetts.
Bttslrl¢,~ Horizons
November-December 1994
W
hen I worked m General Electnc's malor appliance business m the mld-1970s, the entire o p e r a n o n converted overmght--bhtzkrmg style--to a "two-boss" I matrix m a n a g e m e n t o r g a m z a n o n structure. In a hghming strike, our secure, top-down, oneboss orgamzanon chart was pulverized, replaced by a "two-boss" structure configured more hke a tic-tac-toe grid than a pyramid Bewilderment p r e v a i l e d - - n o one k n e w where to put the Xs and Os on the new grid And the n m m g of the shockmg a n n o u n c e m e n t was perfect Pearl Harbor Day, 1974 Trad,nonally, the malor apphance orgamzanon operated as a confederanon of independent product-hne dlwsxons, such as refrigerators, ranges, dtshwashers, and so on A product-oriented vice president presided over each dlws~on pyramid, and everyone reported to one boss up the chain of c o m m a n d to the group e x e c u n v e - our top boss Wxth the new structure, the independent divls~ons and powerful vice presidents that everyone looked up to vamshed, casualties of the change The traumatic two-boss matrix structure exchanged our dlvlsxon vice presidents for a new batch of "product managers," p o s m o n e d weirdly d o w n the side of the novel organizanon gnd instead of at the top. This meant that engineers, marketmg people, and other specmhsts, such as myself, contmued to report upward to bosses m our functional specialties But we also reported sideways to a new product-hne boss m charge of refl-lgerators, ranges, and other p r o d u c t s - - m a n a g ing total product reqmrements, from concept to customer, across the various f\mctxonal specmlnes With our rigid mflxtary chain of c o m m a n d blown away, the cultural and pohncal rules based on facing upward disappeared with the c o m -
Don't look now, but the organization fad of the 1970s is on its w a y back.
6
manders Sideways was as important as upwards, and we weren't sure which w a y to face because both bosses shared equal p o w e r over our performance and pay. Although I d~dn't realize it at the nine, the dramanc changes at malor a p p h a n c e s were m step w~th events at other GE businesses, as well as other large corporanons GE's mrcraft engine business operated m a two-boss m a m x long before the changes at malor appliances, and the c o m p a n y ' s me&cal systems business also mstalled two-boss matrtx m a n a g e m e n t m the mid 1970s. MORE THAN A FAD
M
atnx m a n a g e m e n t was in vogue. DowCornmg's worldwide matrix was c h a m p i o n e d by xts chairman m a classic H a r v a r d BuStpless Review amcle m 1974 The hkes of Xerox, Texas Instruments, TRW, and even C~tibank e m p l o y e d two-boss matrtx management. Dxgltal E q m p m e n t Corporanon, under Ken Olsen's gmdance, developed Vax computers and other m n o v a n o n s m a free-form matrix based on reporting to two bosses or even more, depending on the product d e v e l o p m e n t s~tuanon. I n o w k n o w that companies opting for two bosses to run things weren't lUSt lumping on a fad The two-boss o r g a m z a n o n device addressed s o m e major m a n a g e m e n t dilemmas At the core was the classic structural issue concerning centralizanon or decentrahzation of resources to maxml~ze producnvlty of the firm GM and IBM, for mstance, achmved techmcal excellence by centrahzmg a cnncal mass of skills m specmhst funcnons to fashion leading-edge products and services They found that these functions grew narrow, ulnmately serving their o w n "spec~ahst" agendas, thwarting mtegranon and s p e e d y dehvery of products and services through the organization So these two companies and m a n y others formed decentrahzed product-oriented bus> nesses, hke GE's p r e - m a m x malor appliance &vlBt,smess Horizons / November-December 1994
General Form of a Matrix Organization
~
Staff
ns )r
Geographt
ect Groups
,/"
ngmeermg on
O
Task
O
Funct •
Two-]
5ource Harvey F Kolodn.l'. "Managing m a ,I,Iatrlx
"Busmess Horizons, March-Aprd
slons, to achieve integration and serve market needs Forming product groups frequently shortchanges techmcal excellence "Just get it to them on tm~e, we'll fix it m the field" may satisfy a product manager, but it terrorizes functional experts intent on perfecting bells and whistles In addmon, product-hne managers, such as GE's refrigerator and range vice presidents, each wanted his own full-rune set of functional speclahsts. So functions were cloned, spawning a series of tradmonal reporting pyramids throughout the &WSlOnahzed businesses Th~s was an expensive way to utlhze people To solve this ym and yang, Xerox, GE, Digital, and others looked enwously at the accomplisl-mlents of the aerospace program under way m those days The space race pressure to close iVlatnx Redux
1981. p 20
the "mlssxle gap" resolved the people utlhzatlon dilemma w~th a clever mventlon, the two-boss mamx One boss focused on techmcal excellence and o w n e d the speclahsts, the other, hke a general contractor, used the speciahsts as needed and steered the product program through the organization maze to the customer. It was hke hawng your cake and eating it too, Best of all, sphttlng resources reduced costs Expensive spectahsts could be allocated to multiple prolects, avoiding add~tlonal high-cost headcount. Because the specmhsts worked out of functional home bases, they could be redeployed quickly to reconfigure orgamzational resources to meet new customer requirements, without toniplaint Nomad behawor went w~th the matrix territory 7
Delegation to project level experts, w h o k n e w best what was needed, d o w n l o a d e d decisions and reformation processing, alleviating the hierarchical bottleneck caused by everything flowing upward for &rectlon Under matrix management, the horizontal flow of work across the organization was the center of action. Top management could accelerate that flow by staying out of the way and concentrating on strategic ~ssues rather than day-to-day fire fighting across orgamzatlonal lines I left the appliance business in 1977 and later heard that the power-sharing that w o r k e d efficiently for mlssde prolects didn't transfer well to washers and dryers The malor appliance matrtx d e v e l o p e d stress cracks ~ _ _ and failed a few years after it was formed DowCornlng's famous world° "Few would come wide matrix is long gone forward to defend too Many at Xerox called their m a m x a culprit bematrix management, hind the c o m p a n y ' s dea pariah among cline in the 1980s. Matrix was accused of flaunting organization control at Digital; the structures, by the c o m p a n y pulled the plug on matrLx m a n a g e m e n t as middle of the 1980s." a unique way of life mside the corporanon. In 1979 Tom Peters catalogued the growing corporate distaste for matrix inanagement in an article in Business Horizons, and in 1982, along with Bob Waterman, soundly trashed tt a g a l n - - p o l n t lng out that their "excellent" companies would have none of it because it induced anarchy Few would c o m e forward to defend matrix management, a pariah a m o n g orgamzatlon structures, by the middle of the 1980s TEAMS TAKE OVER
time while raising quality and cutting costs using market-driven teams These teams focus on integrating activity laterally across c o m p a n y functions, reducing hierarchy, making critical decisions, and e m p o w e r i n g cross-functional m e m b e r s by buildmg cooperative c o m m i t m e n t a m o n g them M a n y - - p e r h a p s most---of the stories are true Unfortunately, the composition of these e m p o w ered product d e v e l o p m e n t teams is usually not defined The impression is left that these are all "Tiger Teams," staffed with full-time specialists reporting to one team boss, co-located and selfc o n t a m e d - - a replica of the Lockheed "Skunkworks" model Although s o m e do follow this template, most companies have too m a n y innovative products in the pipeline to dedicate speciallStS full-time to each new product d e v e l o p m e n t effort. So prolect bosses must act as general contractors and rime-share needed specialists from their h o m e functions to avoid cloning talented people on every product venture The result: a two-boss matrix. The Team Taurus program had a core of fulltime members, pamcularly from engineering and manufacturing, but other functions such as purchasing, castings, and outside suppliers participated in a matrix C o m p a m e s such as Black & Decker have formed product-line business teams that have a few core m e m b e r s but matrix other resources within the business One large Ford program runs w~th a core team m e m b e r s h i p of only a dozen people, receiving m a m x e d support from about 350 other "team" m e m b e r s in the organizanon. The Foxboro Company, a leading lndusmal controls company, recently formed a dozen business teams to m a n a g e its worldwide product lines The team leader has no staff; all resources are matrixed. Intel Corporation, one of the fastest product developers and a proven world-class competitor, has created its powerful chips relying on a matrix orgamzatlon
D
MATRIX FLOURISHES
oes this mean that smce the mid 1980s c o m p a m e s have returned wholesale to one-boss accountablhty and the traditional pyramid of power? Have corporate organlzanons that seek cross-functional lntegranon been swept into product- or market-oriented strategic business units (SBUs), fully e q u i p p e d with a panoply of dedicated funcnons> Not quite The current m o v e m e n t toward "teams" has generated as much excitement and visibility as "matrix" did in the 1970s The " e m p o w e r e d " new product development team has enthralled the business press and highlighted the auto industry in particular Ford Motor C o m p a n y ' s "Team Taurus" began the accolades, more recently Chrysler's Viper Team has b e e n anointed for its achievements Many other large U.S corporations report alnazmg stories of shcmg product d e v e l o p m e n t 8
I
n 1986, researchers Davld G o b e h and Erlk Larsen reported that matrix was the most popular structure for product developers, three-quarters of the projects studied used a matrLX format They also found that team m e m b e r s favored the matrix arrangement over more tradlnonal one-boss reporting relationships, rating prolects using matrtx m a n a g e m e n t as successful There are several reasons w h y matrix structures are flourishing today under the guise of " e m p o w e r e d teams" or "business teams " The contrast with the fadures of the 1970s reflects the changed business environment. The context facmg aerospace programs in the missile race days centered on stretching goals, tightening schedules, rapidly changing technolBu.smess Horizons / November-December 1994
ogy, and a need for husbanding talented and costly organizational resources Moreover, diverse groups had to be closely integrated to achieve high c o m p o n e n t quahty and product integrity for a d e m a n d i n g customer People w o r k e d as if thmr survival were at stake Matrix m a n a g e m e n t grew out of this environment, and task-oriented, problem-solving professionals flexibly handled the two-boss reporting requirements that went with the matrix w a y of hfe. The work situation was dynamic, hectic, a little crazy (no one ever k n e w exactly w h o m to report to), but professionally rewarding They felt part of something---even " e m p o w e r e d " to produce results Contrast the aerospace milieu with the business environment and internal culture of those days The large corporation that adopted matrix m a n a g e m e n t still enjoyed market d o m i n a n c e in Its domestic environment. Some could administer prices and raise them in unison with "compentors" within their captive domestic markets; strong unions maintained a rigidly structured hourly work force, and products enloyed long life cycles Indeed, NCR didn't change its cash register slgmficantly for 30 years Product renovations could be stacked up to not disturb a dominant design, then rolled out w h e n a major model change finally replaced an aging product line Breakthrough renovations were sought over the long term in centralized corporate research centers. Consumers tolerated shoddy products because worldwide comparison was unavailable Large segments of industry were staid and regulated Internally these companies were dominated by centralized, bureaucratic, functional c o n t r o l - even in decentralized units Functional chimneys of power, striving to meet functional goals and unconcerned with the possible mapact on sister functions or the firm as a whole, were tolerated within the organization Political jockeying and infighting prevailed to preserve turf. Once people made it to the top of the heap, they stayed there Employment and position achieved on the ladder were entitlements Middle managers sought to build "empires," add people reporting to them, expand their budgets, carve out a piece of someone else's territory, and get their lobs reevaluated to m o v e up the hierarchy a notch. Younger managers focused on mobility Staying on a lob more than 18 months was tantamount to fadure Shortterm goals were set, supporting the orientation toward short-term job occupancy and letting the next person worry about the inevitable chickens that came h o m e to roost "Zero defects" ballyhoo substituted for quality Product d e v e l o p m e n t was linear, by functions, thrown "over the wall" to the next function to figure out D e a s l o n s all m o v e d upward, frequently to settle into m-baskets for appropriate aging and political testing Matr,x Redt,x
Is it any w o n d e r that people w h o were emb e d d e d in a functional niche for their whole career did not respond well to the ambiguity of reporting to two bosses? Many lived by thick policy and procedure manuals and were comfortable with cookie-cutter job descriptions. Within this context, matrix m a n a g e m e n t was sprung onto GE's malor appliance business and many other businesses, pasted over the rigid hierarchical structure m place, only to suffer transplant relectlon. A BETrER MATCH--A B E T I ~ R MATRIX
oday's economic environment and corporate cultural transitions match better with matrix requirements. The situation is closer to the space race than the smug, walledcl W mentality of the past Resources are spread thin and must be optimized Competinon is global and fierce C o m p a m e s such as NCR no longer have long product cycles but need to update their electronic offerings every 12 to 18 m o n t h s - or perish The accent Is on fiat, lean team organizanons focused around business processes that cut horizontally across functions, driven by customer satisfaction and product i m p r o v e m e n t A sense of urgency pervades product development, where fast, incremental innovation is a necessity to k e e p tip with rapidly closing windows of opportunity The fadure of matrLx past was c o m p o u n d e d by deploying "pure" or "balanced" matrix management The two bosses were declared "equal" and shared so-called "influence power," meaning that true position p o w e r was up for grabs b e t w e e n the funcnonal boss and "Matrix structures are the product-line flourishing today under manager. This restilted in conflict, the guise of 'empowered delay, and multiteams" or 'business tudes of meetings that a c c o m p h s h e d teams." The contrast with little Only the early the failures of the 1970s organization develo p m e n t (OD) pracnreflects the c h a n g e d noners seemed sansbusiness environment." fled with the mayhem created by p o w e r danghng within the pure matrix To them, organizational effecnveness required donning a corporate hair shirt to search for trust, openness, confrontation, and eventual interpersonal competency. Resolving the p o w e r conflict was only a "tgroup" or "managerial grid" away. Experience has demonstrated and research has confirmed that product managers need more than Informal influence and pohtical skill to be
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effective in a matrLx setting The p o w e r edge belongs to the product-hne leader to a c c o m p a n y accountability for overall results Functions serve the product line, nurture the specialists, and advance the state of the art Instead of glorifying conflict, as was done m the 1970s, firms stress cooperation to avoid arm wrestling over orgamzatlonal resources The balanced matrix of the 1970s was built pnmar, ly on wishful thinking, the balanced matrix form disoriented organizations and led them astray Another slip was the failure to transfer the h e a w w e i g h t program manager to the commercial setting The aerospace program manager has traditionally been a powerful individual m the organization, frequently displaying outstanding leadership skills, viewing program management as a career path--always the acknowledged supreme being withm the aerospace matrix Too many businesses that installed matrix installed p e e w e e prolect managers with low leadership skills and little general management experience They had only a grain of position p o w e r and ended up as go-betweens, with far more respons,bihty on paper than in practice To accompany this semHl~enial prolect role, the prolect manager and the product-hne "team" w e r e never really "empowered", in effect, the hierarchical organization that was supposed to be leavened by the matrix insidiously stayed in place This is how it was at GE's major appliance business Hierarchy did not fade away, although the product-hne managers had visible positions in the hierarchy After the new organization was in place and the matrix should have been workrag, significant decisions were made the way they had always been made :it the top, by the group executive and the group staff Evewone knew it The organization responded accordingly, to the true paths of power and not the ersatz mamx The product-hne managers were astute e n o u g h to avoid drinking the bathv, ater dished ()tit by c o m p a n y recitations of approp,-late nlatnx procedure They knew how the system worked and that it hadn't changed Matrix was dead on arrival---done Ul to a great extent by its own archltects :it the top This v, as not an u n c o m m o n experience at the time EMPOWERMENT REINFORCED
tional business systems driven by chent/server applications provide decision reformation to teams that reinforces the rationale of empowerment This distribution of decentrahzed information is in the early stage of supporting team autonomy in the professional arena, but it is well estabhshed on the shop floor Moreover, implementation of lean production methods has allocated production capablhty to product-hne teams Although resources continue to belong to the manufactunng function, the internal competition for these matrtxed resources is greatly reduced. This resource allocation model has been extended to other functional areas, such as engineering and marketing, thus building tightly woven matnxed teams with considerable clout and flexibility that enloy many of the benefits of dedicated strategic business units while remaining in a matnxed structure In many cases, downsizmg has redticed resources such that companies cannot meet fiveyear growth plans, and ffmds are not avadable to hire additional resources to take tip the slack Still, new products and services need to be developed with diligence to meet competition, and this demands a critical mass of specialists A ffmctlonal home base is the best place to house speciahsts to maxnnlze their learnmg and development, because research and pracncal experience demonstrate that product developers kept contlnuously in a team mode will dissipate the team member's abdity to keep in touch with the state of the art Under the circumstances, this product development "Catch-22" is best resolved with a product-oriented matrix A
s I have indicated, when mat,-lx management was introduced at GE's malor apphance business, it was a show-stopper Matrix mlplementatlon was a hard show to take on the road during the 1970s, with the result that it did not have long engagements in a number of malor corporations Today matre¢ is rarely mentioned in managenlent hterature Companies usmg matrix structures tend to keep mum about it Regardless of what name is attached to it, n-latrix has become the stealth organization of the 1990s, it is there even though not recognized, deln ermg restllts far more effectively in an envn'onment Dr more attuned to its structural pecullarines than in its heyday C1
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he "empov~ erment" isstie hngers on 111 the current ,ippllcatlon of matrix management in m a n y bus,nesses today Hierarchy is ahve and well and hying in corporate America It ,s not likely to wither away soon Out of necessity, power and decision authority are being shared with cmss-f\mctional matrtxed teams because competitive advantage depends on that sharing For instance, reenglneered cross-func-
Richard E. Anderson is a principal with Kendall Consulting Associates, Cambridge, Massachusetts.
Bttslrl¢,~ Horizons
November-December 1994