Why this article?

Several months ago, when one of my clients decided to implement the matrix organization, I asked myself: What are the benefits of this structure? Why are we deploying once again this organization?

Why is the matrix organization being applied in French companies today? 

Some time later, I realized when talking with my colleagues, friends and people around me that the matrix organization is being implemented in several big companies in France in a kind of domino effect.

This article tries then to answer the following question: Why is the matrix organization being applied in French companies today? 

A little bit of history: The Matrix Organization

The concept of matrix organizational structures was created in the 1950’s to assist in the management of projects such as large U.S. aviation programs. Until that time, it had been possible to use a single hierarchical organization, but only with a single and very large project.

This new way of working was supposed to help companies achieve higher performance and productivity as a response to the rise of large-scale projects in the post-war period. Companies needed to respond to the business demand for analyzing a large amount of data, using specific and diverse skills and adapting to emerging technological advances. As more and more projects were developed, a matrix of projects was created to ensure both the sharing of highly skilled people through projects and a single head manager responsible for each project.

Some of the advantages of the matrix organization are:

• The organization becomes more flexible and a clear communication can take place between the participants in the project. Consequently, problems are solved in a more efficient way.
• Very specific expertise can be shared across several projects whenever needed.
• Employees feel more engaged as they see the impact of their work in the company (profits of each project are calculated way in advance).
• Employees feel more valued and appreciated because their skills and expertise are used well and they are recognized in each project.

Why didn’t the Matrix Organization work in the past?

Some companies went back to a more centralized structure

The complexity of the matrix organization may lead to problems, such as:

• Employees have to report to two managers: the project manager (the person responsible for the project) and the functional manager (the person responsible for a department). If both managers have equal authority and power, conflicts could arise, particularly if there is a difficult relationship between them. The employee will find himself in the middle of a conflit not knowing what to do.
• Employees could feel confused if what they are effectively working on for the project differs from what they were supposed to do according to their job description. They can feel upset because of this contradiction.
• The workload tends to be greater in a matrix organization than in other types of organization because people need to work for the project but also assure their functional responsibilities for the department they belong to.
• Costs could be higher: the company could pay extra manpower that is not fully occupied, the number of meetings to ensure consistency between projects could increase, the company could hire more projects managers than needed, etc.

For these reasons and mainly to reduce costs, some companies went back to a more centralized structure: unification of their activities around their key products and services, a single sales department for a worldwide company, a central IT system, etc.

Why is the Matrix Organization being implemented this year?

The great philosopher Hegel develops in his “philosophy of History” the idea that history unfolds through a succession of cycles. Each new cycle retains the best aspects of the previous one. Applying this concept to the Matrix Organization, companies try to develop a new approach to this famous old organization retaining the best points and improving on them.

The matrix organization facilitates the integration of the applications into the projects.

In the era of information technology, there are lots of small applications that play important roles in all projects. The applications need to develop functionalities for several projects at the same time. The matrix organization, because it groups similar business projects together in a single portfolio, facilitates the integration of the applications into the projects, and therefore, to the whole company.

Finally, most companies want to implement the scaled agile methodology. To do so, they need a transverse structure to train, mentor and support good practices, and the matrix organization provides such a transverse structure. The role of portfolio manager in the matrix organization also serves this purpose of diffusing a common methodology across different projects.

How can Consultants help companies to make the Matrix Organization work? 

Consultants can help the Matrix Organization to increase the flow of communication in the company to solve conflicts between managers and to ensure that decisions are consistent at all levels. They can also assist the organization to reduce costs by monitoring Key Indicators to optimise human resources.

Consultants have a positive personality and they can have a real impact on your organization by inspiring employees to give the best of themselves.

Consultants help companies with methodology and organizations as part of their day to day work. They work with several companies in different sectors. Their experience allows them to see what works or does not work, and will enable companies to reach their objectives at all levels.

At the same time, it is important to choose a highly qualified Consultant in project management. Such a person will be able to take a step back from his daily tasks and help the top management to focus on their business priorities.

Lastly, we should not forget that most Consultants have a positive personality and they can have a real impact on your organization by inspiring employees to give the best of themselves.

Raquel Navalón de la Rosa