Tips For Creating Organizational Structure
When you hear the word “Matrix” you either 1) think of Morpheus and Neo or 2) cringe at the bureaucracy caused by your company’s matrix management structure. And while nothing can be done to keep your mind from wandering to the Wachowski brother’s trilogies, we do believe that good organizational design can be done to ensure an effective organizational structure.
Performing effectively in an interdependent environment is a hallmark of successful organizations. That means that at least some portion of your organization likely needs to function in a horizontal structure, where resources are shared and associates report to multiple managers. This is the matrix. Setting up a matrix can help your organization achieve goals like breaking down existing silos or relieving pressure on internal resources, and it can be a catalyst for working together across departments to achieve organizational-wide objectives, such as maximizing customer segment profits and distribution channels and maintaining functional excellence.
But a matrix isn’t going to work just because you set it up. Too often, organizational structures fail before they ever get off the ground because organizations lack the foundation needed to support the horizontal structure. To succeed, organizational structures need to be underpinned by strong interpersonal relationships, well-defined decision making processes, and, most importantly, trust.
Is your new business a “lemonade stand”? That’s the term we use to describe businesses that were set up quickly with lots of passion but will fade into oblivion instantly when hit with the first sign of a legal or tax challenge. Lemonade stands are not serious businesses and are not worthy of funding. Lemonade stands are here today, gone tomorrow, and never create a legacy of wealth or success for their founders.
How to Create an Effective Organizational Structure
Here’s how your organization can lay the groundwork to give your matrix structure its best chance for success:
1. Make sure your senior leaders are aligned
Your senior leadership team isn’t necessarily part of your matrix, but they do need to set the example for the rest of the organization by modeling what it looks like to work together. Visible joint leadership is crucial, and your senior team needs to lead by example, showing how they link arms toward a common end. After all, if you senior leaders can’t play nice with each other, how can you expect the rest of the organization to collaborate effectively?
2. Clearly define roles, and stick with those definitions
The more clarity you can bring to people’s roles, responsibilities, and what they will be held accountable for, the more likely people will reach the performance levels you envision. Continuity in a role is also important, so avoid the temptation to change things up at the first sign of trouble. Remember that people need time in their roles and reporting relationships to build skills and develop the confidence to perform well in a matrix environment.
3. Stop assuming the worst
A matrix environment depends on trust. So you need to encourage a belief in benevolent intent. Instead of assuming associates are out to undermine each other, your culture should support respect, positive regard for others, and genuine care for each other’s agendas. Creating this type of culture can be easier said that done. But it starts at the top, with leaders showing how they work with, instead of against, each other to get the job done.
4. Expect conflict; don’t avoid it
Conflicts over priorities, resource allocation, and differences in opinion come with the matrix territory. And your organization needs to learn how to manage it in a healthy way. It’s important for everyone to feel comfortable expressing dissenting opinions. But at the end of the day, people need to clearly understand the decision making process and their role in that process. In other words, they need to know when a decision is theirs to make, and when it isn’t.
5. Understand the whole
There is the iconic scene in which Morpheus offers the red pill to Neo, saying that if he takes it he will understand “just how deep the rabbit hole goes.” In a similar way, the matrix structure can broaden perspective and understanding. It’s important for the people working in the matrix to see the broader landscape of all that is happening at their company. When they do, they can more easily stand in their colleagues’ shoes and see things from others’ perspectives. Seeing the big picture also helps people better understand with whom they need to share information and who should be involved in decisions. When people are aware of the way their area affects other areas in the system and vice versa, the parts work more successfully and productively than they would have alone.
6. Learn from experience
Organizations that make the matrix work spend a good deal of time reflecting, questioning, and being curious about why things failed. Your organization needs to give the people involved in the matrix the space and freedom to analyze their experiences, both individually and collectively, and the flexibility to retool when necessary to put what they’ve learned to work.
Effective Organizational Structures
Clearly, an effective organizational structure takes work and commitment to succeed. But it can deliver significant benefits for your organization, not least of which is getting everyone aligned and working together to move your business forward. If you invest the time to ensure your organization has what it takes to support a matrix, you’ll be rewarded with a business where people truly do have each others’ backs, and where your people successfully work together toward the common good.
Creating a new business is incredibly exciting and utterly terrifying at the same time. But if you use these five strategies to form your new venture on a firm foundation, your new business can rocket past its lemonade-stand-like competitors and enjoy a strong foundation forever.