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Creating the Culture for Matrix Management

It's impossible to build a Matrix organisation without the correct attitude, mindset and will to change behaviours. Matrix organisation is not an easy concept to materialise in reality. The concept of matrix management is complex to say the least, and requires significant soft due diligence.

Planning for a Matrix organisation requires considerable effort and there are few training courses that can provide the right baseline from which to start building a matrix business, and measure progress. This is probably the most important sentence you will read about designing a matrix culture!


It's okay to follow some general principles, but building a Matrix organisation requires planning and experimentation. You cannot retire to laboratory and plan it in isolation. Matrix organisation is built through negotiated agreement with your stakeholders - inside and outside of your business.

As the Matrix organisation requires the input of many, the design of the Matrix organisation also relies on involving all stakeholders. It requires completely turning organisational theory on its head and re-examining what's important in the business, building testable models, structures and processes and testing them until you eliminate all problems.

What drove you to build a Matrix organisation?

The driver behind Matrix is usually concerned with creating greater sensitivity to deal with all customer requirements. It is about appealing to your customer's emotions and building life time value. Where speed oo response is important in customer service, the Matrix organisation is probably the answer.

A Matrix organisation is designed to speed up delivery for the customer by working across functional areas. Many understand Matrix to involve a complex set of inter-relationships with 'dotted line' responsibilities traversing across the organisation. In too many cases, this evolves wrongly into a tight and rigid bureaucracy with too many rules, conditions and responsibilities defined.

Creating a 'blue book' of rules, decisions, regulations and accountabilities actually reduces the ability of the organisation to respond to the customer. What may have started out as a focus on building a responsive culture, attempting to reduce the cycle time to respond to customers, can actually create a very controlling organisation where rules are employed to govern not just how people operate within functions, but also across functions.

Mechanistic vs. Organic Cultures

So often in the quest to create a Matrix organisation, those creating the structural changes can actually create an even tighter and more rigid mechanistic bureaucracy rather than the organic form they really require.

Designing the Matrix Culture

A culture can only be created by letting the senior team work closely with their colleagues on ensuring that the execution of their strategic business plan is aligned with the core values of the business. In my role in shaping Matrix Organisations I focus on five key elements.

1. Core Values drive Behaviour

By defining core values, staff are aware of how they will transact business both with the customer and in the internal supply chain. We know that all businesses have core values but often these exist by default rather than by design. Have you the core Values that staff can align with? Are they the right values? Are they really the core values or just those that you espouse in PR literature and Investor communications?

Can you be sure that the core values you espouse are really the values that govern behaviour in your business? I know many businesses that say they are quality and customer focused but on investigation these core values are really all about reducing costs and customer complaints, rather than preventing problems arising and building life time value for the customer.

You really have to understand the principles behind culture change, otherwise you can waste a shed load of money and screw your business into the ground. There is more than a subtle interpretation here and making these live in the form of leadership behaviour is critical from taking a conceptual idea like 'Matrix organisation' and turning it into a reality that works.

I recently had experience of working with a Genetics business, where we created 49 virtual businesses all with operating profit and loss accounts, training and PR budgets etc (all operating using Matrix organisation as their business model) which were focused on specific geographic markets throughout the five continents. What made this organisation highly successful was the special role they placed on core Values and Leadership.

The business was sold to BG group for an excess of 50m. Using this business model it went onto greater things acquiring key competitors and making lots of investors lots of money. Business was good and so was employee satisfaction. They had the power to influence their markets, their customers and had 100% control of the finances. They thought that was 'cool' and everyone loved the culture.

2. Without Leadership there is no change

It may appear trite but it's true. If you don't have someone with charisma and influence leading the team to build a Matrix organisation you have a major problem. To me, Leadership is about Vision and about building core Values that people will live by, which will govern their behaviours, be assessed against and most importantly be proud to align with.

Real Leaders are independent, maverick-like and often difficult to manage. They probably have strong views on most things and are good at influencing, persuading others to their point of view. Don't expect a democracy, but expect that this form of Leadership is about challenging the existing form of organisation, deconstructing it and building a new form in its place.

When people hold onto the old way of doing things there may be casualties and strong words spoken. It's not all going to be sweetness and light. Forming a new organisation based on working across boundaries requires dismantling the old silo's, getting rid of restrictive behaviours and practises, and creating one culture replacing the many divergent and unhelpful sub cultures that have evolved due to the silo mentality.

3. Reward & Performance Management

Effective performance needs appropriate reward. We have to forget the old practise of reward based on moving through seniority in a function, to valuing the contribution that people make across boundaries and away from their functional speciality.

The traditional form of Performance management requires; quarterly reviews, performance improvement plans and the annual appraisal and sometimes 360 degree assessment.

The cornerstone of Matrix organisation requires a more sophisticated form of 360 assessments with multiple points of input not just from managers senior to self, but also the valued input of colleagues, peers, direct reports and other stakeholders including suppliers and the end user, customer or consumer.

We also rely more on qualitative rather than purely quantitative data to appraise performance, as well as new criteria for rewarding success and advancement through the organisation. Core Competencies are obviously an area which requires significant design as well as reviewing selection policies.

4. Expect and Welcome Resistance to Change

There is no easy way to ensure that change happens. Much of matrix organisation is counter to the way that most people have been taught to operate within business. It requires people to deal with ambiguity and not always having a right answer to set questions. Often a negotiated agreement is the only answer to some problems that we encounter daily in the matrix organisation and requires a person with a different mindset and flexibility to resolving problems and disputes.

You cannot expect everyone to grasp the concept and run with it straight away. The culture of many businesses has been allowed to stifle initiatives to working across boundaries and perpetuate the silo mentality - so it will take some time to disentangle.

I often find that even in the most positive, and apparently open cultures that sub cultures exist to the detriment of the whole business. Power politics reside in various functions with decision-making and resource allocation not following the desired or logical route expected.

Here a key issue is work through the core objections of those detractors in the organisation and sell the benefits and the advantages of the matrix organisation.

5. The Change Team

To create and shape a Matrix organisation requires a team of internal and external change agents who work tirelessly with line managers in developing solutions to practical problems. At the same time they need a global mindset to ensure that the Matrix organisation delivers to its strategic and operational plans. Although management services staff and business analysts can be helpful in examining work flow etc, the change is behavioural in nature and requires people who are expert in the arena of Organisation Development.

The Change Team has to align strongly with the key sponsors of the change and have access to the most senior person on site being either the COO or CEO.

That's my recipe for making the Matrix organisation work.

If you have any questions please email me at or use our contact form below.

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