The pitfalls of matrix management and its particular advantages can be explored in detail through the Harvard Review. For those not yet subscribed, I suggest adding it to your publication list. To summarize an excerpt: In practice, however, the matrix proved all but unmanageable— especially in an international context. Dual reporting led to conflict and confusion; the proliferation of channels created informational logjams as a proliferation of committees and reports bogged down the organization; and overlapping responsibilities produced turf battles and a loss of accountability.
Companies typically don’t consciously choose this problematic management form. Historical legacies and swift business decisions driven by investment indicators, often without readiness for in-depth analysis, lead to situations where “matrix management” controls numerous processes for extended periods.
In my professional experience, I’ve faced two types: establishing local representation and acquiring companies. The former, being less complex in terms of management, is more predictable. Although I can’t disclose specific companies. The company was mainly formed by the HQ. Consequently, issues surrounding the establishment of common goals and a clear hierarchy were almost nonexistent. Management managed to avoid the disadvantages of a matrix management structure almost always, except for highly complex projects complicated further by cultural differences among the offices of a huge company. I’m curious to read future books that discuss how leadership handles such matters.
The latter involves the acquisition of companies, it leading to relatively long-term friction. Friction should reshape the acquired company. Much depends on how well-established the parent company is and how deeply it is willing to delve into the specifics of the acquired company. Changes in competencies, often significant shifts in goals, confusion in subordination, and uncertainty about the future can paralyze such a company. Hence, in my subjective view, it’s crucial to ‘plug in’ the company to an artificial life support system to stay ahead. I’ve seen changes in the leadership of the acquired company aimed at reducing resistance to changes and enhancing manageability. It’s a radical and common but effective solution. However, it’s essential to remember that such changes require a deep bench. Leaders sometimes leave a company suddenly or change their positions, and having timely replacements for them and their subordinates is crucial. Some leave immediately, needing just a ring, while others might take up to six months before joining competitors.
Transformation takes time, and delaying solutions to pressing issues only exacerbates the situation. Improving transformation is possible through simple steps: a transparent new structure, clear lines of responsibility, efforts towards material and immaterial motivation, achievable goals in the early stages—all of which need support from shareholders, devoid of rose-tinted glasses.
When reviewing materials on this topic, I was surprised by how long this trap has ensnared companies. The problem existed and was localized in the 1970s, in 2000, and in 2020. Like a flytrap, despite its primitive nature, it remains capable of ensnaring quick and more evolved insects.