Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today by Jack Welch, Suzy Welch Page A
Authors: Jack Welch, Suzy Welch
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people you should be able to move quickly to develop and push a new technology through testing, or buy another company with a great add-on service, or change management to bring in fresh faces who can break the technical paradigm. The biggest thing standing in the way is your attitude—an insular big-company condition you can’t afford to have.
MAKING SENSE OF MATRIXES
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Having worked in both large and small organizations, I am at a loss to see the overall benefits of matrix organizational structures. Is this a problem inherent with the matrix structure or just poor matrix management?
— COLORADO SPRINGS, COLORADO
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I t’s so easy to hate matrixes, isn’t it? If there is one thing practically everyone in business can agree on, it’s that they sound great in theory but are hell to put into practice.
Count us in. We sure prefer pure P & L businesses. They’re built on clear reporting relationships, making each individual accountable for his or her results. They make strategic focus and resource allocation easier. They’re better training grounds for developing general managers. And they’re definitely better when it comes to creating new businesses out of the old; in P & L structures, start-up champions just have an easier time getting heard.
Meanwhile, matrixes, for all their good intentions, can be exercises in frustration. Their biggest problem: sucking the clarity right out of organizations. Any time you have someone reporting to two bosses, chances are accountability will get muddled. Matrixes are filled with dotted-line relationships. The result can be all sorts of mischief, from power plays to miscommunications. At the same time, matrixes often put well-meaning people at total cross-purposes. One classic matrix scenario involves a manufacturing manager trying to make his overall inventory budget at the expense of a product manager with a hot new widget who is crying for availability. No wonder matrixes tend to enervate the people who work in them—ambiguity and loggerheads have a way of doing that.
But if matrixes were all bad, they’d be as extinct as dinosaurs by now, and they’re not.
Matrixes have two main advantages. The first is that they create a well of superior expertise that many product lines can draw on. Take, for example, a jet engine company with several different engine types. In a P & L situation, each engine type would have its own metallurgist. But none of these individuals would likely be of the caliber of specialists working in a matrix organization. Why? Because functional organizations—with their pay, visibility, and prestige—are just better able to attract high-level talent.
The second advantage of a matrix is financial. With their larger orders, the heads of manufacturing and marketing in a matrix are far better equipped to drive a hard bargain with suppliers and distributors than the heads of individual P & L businesses. They just have more negotiating power.
So, while working in a matrix can sometimes be maddening, the structure’s benefits cannot be denied. From your question, it’s difficult to tell exactly why the experience has been so negative for you. Perhaps, as you imply, it has something to do with management. That wouldn’t surprise us; matrixes are harder to run than pure P & L businesses. They require a higher comfort level with ambiguity. Further, they require a higher level of trust. That is, the people in the product lines have to believe to their toes that the people in the functions are working for the business’s overall goal, not just to make their own numbers.
Bottom line: matrixes may never be as great in practice as they are in theory, and they will never be as easy to work in as a pure P & L, but don’t give up on them altogether.
When leaders build trust and push hard to ensure as much clarity as possible, matrixes do work.
THE USES AND ABUSES OF GUT INSTINCT
----
What would you do if you found out that your
MAKING SENSE OF MATRIXES
----
Having worked in both large and small organizations, I am at a loss to see the overall benefits of matrix organizational structures. Is this a problem inherent with the matrix structure or just poor matrix management?
— COLORADO SPRINGS, COLORADO
----
I t’s so easy to hate matrixes, isn’t it? If there is one thing practically everyone in business can agree on, it’s that they sound great in theory but are hell to put into practice.
Count us in. We sure prefer pure P & L businesses. They’re built on clear reporting relationships, making each individual accountable for his or her results. They make strategic focus and resource allocation easier. They’re better training grounds for developing general managers. And they’re definitely better when it comes to creating new businesses out of the old; in P & L structures, start-up champions just have an easier time getting heard.
Meanwhile, matrixes, for all their good intentions, can be exercises in frustration. Their biggest problem: sucking the clarity right out of organizations. Any time you have someone reporting to two bosses, chances are accountability will get muddled. Matrixes are filled with dotted-line relationships. The result can be all sorts of mischief, from power plays to miscommunications. At the same time, matrixes often put well-meaning people at total cross-purposes. One classic matrix scenario involves a manufacturing manager trying to make his overall inventory budget at the expense of a product manager with a hot new widget who is crying for availability. No wonder matrixes tend to enervate the people who work in them—ambiguity and loggerheads have a way of doing that.
But if matrixes were all bad, they’d be as extinct as dinosaurs by now, and they’re not.
Matrixes have two main advantages. The first is that they create a well of superior expertise that many product lines can draw on. Take, for example, a jet engine company with several different engine types. In a P & L situation, each engine type would have its own metallurgist. But none of these individuals would likely be of the caliber of specialists working in a matrix organization. Why? Because functional organizations—with their pay, visibility, and prestige—are just better able to attract high-level talent.
The second advantage of a matrix is financial. With their larger orders, the heads of manufacturing and marketing in a matrix are far better equipped to drive a hard bargain with suppliers and distributors than the heads of individual P & L businesses. They just have more negotiating power.
So, while working in a matrix can sometimes be maddening, the structure’s benefits cannot be denied. From your question, it’s difficult to tell exactly why the experience has been so negative for you. Perhaps, as you imply, it has something to do with management. That wouldn’t surprise us; matrixes are harder to run than pure P & L businesses. They require a higher comfort level with ambiguity. Further, they require a higher level of trust. That is, the people in the product lines have to believe to their toes that the people in the functions are working for the business’s overall goal, not just to make their own numbers.
Bottom line: matrixes may never be as great in practice as they are in theory, and they will never be as easy to work in as a pure P & L, but don’t give up on them altogether.
When leaders build trust and push hard to ensure as much clarity as possible, matrixes do work.
THE USES AND ABUSES OF GUT INSTINCT
----
What would you do if you found out that your
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