Systems – Naomi Stanford

I’ve been puzzling over a matrix organisation again. (See my earlier blog Matrix structures: the pessimism advantage) Talking about a matrix seems to elicit the Marmite response – love it or hate it. Apparently whether you love or hate Marmite is down to your genes. I wonder if the same can be said for a matrix organisation?

Marmite has an Australian equivalent, Vegemite, and they’re similar but different. That’s true for matrix organisations too. There are similar but different ones. I found a useful definition of terms on this:

Matrix Any organizational structure in which the project manager shares responsibility with the functional managers for assigning priorities and for directing the work of individuals assigned to the project.

Balanced matrix A matrix structure in which the project manager and functional managers share roughly equal authority over the project. The project manager decides what needs to be done; functional managers are concerned with how it will be accomplished.

Strong matrix A matrix structure in which the project manager has primary control over project activities and functional managers support project work.

Weak matrix A matrix structure in which functional managers have primary control over project activities and the project manager coordinates project work.

A formal matrix organisation of the type defined above is usually shown on an organisation chart as two dimensions – vertical and horizontal – with, for example, function or product on the vertical axis and project or geography on the horizontal. The intended purpose of this dual reporting is to increase lateral co-ordination at the levels below the leadership team.

Nicolay Worren in a 2012 blog asserts that ‘When you examine a particular firm more carefully, however, you usually don’t find that people report to more than one boss (formally), although they of course may work for multiple managers in a variety of different roles. Yet this [reporting to more than one boss] was the defining feature of the matrix organization when it was first conceived.’

(If you feel so inclined, you can take a quiz testing your knowledge of matrix structures – which could feel rather similar to taking a blind Marmite/Vegemite test).

What that list of types of matrix doesn’t show is one which I, like Nicolay Worren, think is the most common – the ‘hidden matrix’ as he calls it: ‘By that I mean governance processes and authority relationships that cross the formal units, but which are not shown on the official organization chart (and that are usually not deliberate)’.

In the Marmite/Vegemite test, the idea is that there’s a ‘winner’. You like Marmite more than Vegemite or vice versa. You’d think that this form of competition should not feature in a formal matrix organisation in which one-person reports to two ‘equal’ managers. But in practice people favour a hidden matrix (where they are working for, not reporting to, multiple managers) over a formal one because they favour whatever will allow them to get their work done in order to meet performance objectives. Often the hidden matrix develops as a sensible workaround to a faulty formal structure whether it’s matrix or another structural form.

Many organisations now comprise several dimensions, for example: functions, projects, geographies, and sectors (industry or product or service). Add in governance systems and then add in an element that requires collaboration with a completely different organisation if the product/service is to be successful delivered and you have six dimensions to structure. How can these be structured? Could they, for example, be structured as a formal matrix, like a mathematical one of rows and columns?

In this multi-dimensional organisation it is inevitable that the hidden matrix will be hard at work, aiming to combat some of the shortcomings of any formal organisation structure. However, a hidden matrix also has shortcomings.

Worren outlines three difficulties with the hidden matrix:

It creates a difficult role for the middle manager.
It makes it difficult for top executives to assign real accountability to a sub-unit.
It introduces a conflict of interest, or a goal conflict.

These are almost identical difficulties to those identified in a formal matrix (one person reporting to two managers). A research paper identifies multiple negative issues:

‘… the risks of loyalty conflicts and unclear accountabilities; and localised claims to authority (authority bias) and decisions and actions taken in isolation lead to the risk of poor decision-making. Overlaps in responsibility and authority can result in power struggles and conflict, leading to the risk of slow response time. Preoccupation with sectional interests and infighting can result in a tendency toward anarchy, leading to the risk of control problems. Dual reporting, role ambiguity and conflict, and competing objectives and priorities can lead to personnel issues, such as the risk of staff stress and turnover.’

My current puzzle is to do with multi-dimensional organisations. I’m puzzling over how to develop a formal structure and whether the ‘hidden matrix’ can emerge/be visible within a formal structure, in a way that people understand, that marries the hidden matrix with the formal structure and that makes work more efficient, effective and enjoyable in practice.

This would not be such an issue if people were less interested in the visual organisation chart and more interested in enabling work to get done effectively and efficiently. We could show organisational relationships, work flows, and interactions via network mapping or similar systems maps and then potentially adjust workflows and interactions in response to what we see. However, the current reality is that the majority of people cling to the idea that they need an organisation chart and that changing the chart will solve organisational issues.

That tendency aside, assuming that a formal organisation cannot be structured easily from the multi-dimensions and that the hidden matrix organization, inherent in any formal organization structure brings problems and risks, what can be done to make the hidden matrix visible, and the formal organization more accommodating of the matrix within it?

In the case I am working on, I’m going to recommend we do six things:

Brokering conversations about the attributes of the hidden matrix and the relationship of it to the current organisation structure
Developing the positive attributes of the hidden matrix
Minimizing the negative attributes of the hidden matrix
Assessing ways of making the hidden matrix visible
Encouraging people to stop looking at, then changing, organisation charts i.e. reporting lines as the sole means of solving issues
Identifying and then reporting on measures of organizational structure performance

Hidden matrix structures are here whether you love them or hate them. We’re not looking for a winner but for an ability to work with, what two researchers called the paradoxes of a matrix:

increased frequency of lateral communication vs ambiguity over roles, responsibility, and conflict between functional managers and project managers;
improved motivation and commitment vs heightened conflict among employees; and
high ability to process information vs decision strangulation and slow response times.

How would you approach making the hidden matrix visible in order to make a formal organisation structure more efficient, effective and enjoyable? Let me know

Image: Antony Gormley, Matrix II

John Bird presents a stirring case for tackling poverty. ‘To me the really big thing in the world today that needs to be done is that we have to stop seeing things as ‘things in themselves’. We have to stop being separators of life into categories. That if you want to solve poverty, which I am rantingly struggling to do, you can’t separate poverty out into separate things. You have to hit poverty square in the eye. You have to give a cocktail of solutions to it, like you might zap a cancer. Yet the world is always dividing poverty up into different parts: literacy, housing, work, wellbeing, health … the world of thinking, of society, of government, always breaks things up into things’.

This ‘thingifyíng’ of issues – trying to tackle them separately rather than interdependently, collaboratively and/or as complex problems is a big issue – because people in organisations I work with ‘get’ interdependence in theory and understand that linear and cause/effect thinking won’t address re-ordering the tangle of variables that constitute the ‘design’ of the organisation. Yet they are unable to work with this in practice and continuously retreat to the organisation chart as the way to solve many organisational issues. (See a Q5 Partners short video Forget Personality: a thinkpiece of restructuring teams, that warns against an ‘org chart first’ approach, and goes down well when I’ve shown it).

I’ve had several different conversations during the past week on interdependence and the tendency to ‘thingify’. Various possibilities were put forward for the inability of organisational leaders to engage with complex, interdependent and problematic organisational design situations and address them systemically or holistically, rather than individually and in compartments. Among the reasons we discussed for the tendency to reach for the organisation chart, three came up in all the conversations:

1. The ‘tyranny of metrics’ (see my blog on this) that is performance targets that attempt to measure elements of a system’s performance, rather than the outcome of the performance. This frequently leads to gaming behaviour as organisational members try to reach the target rather than the intended outcome. An example of this is described in Max Moulin’s article Flawed targets and the ambulance service – is there a happy ending? which leads to questioning, ‘traditional assumptions about measurement, impact, and relationships’. There’s also a recent report that looks at flawed performance targets in the public sector A Whole New World — Funding and Commissioning in Complexity.

2. Believing that organisation design work is complicated rather than complex. David Snowden, explains the difference: ‘In a complicated context, at least one right answer exists. In a complex context, however, right answers can’t be ferreted out. It’s like the difference between, say, a Ferrari and the Brazilian rainforest. Ferraris are complicated machines, but an expert mechanic can take one apart and reassemble it without changing a thing. The car is static, and the whole is the sum of its parts. The rainforest, on the other hand, is in constant flux—a species becomes extinct, weather patterns change, an agricultural project reroutes a water source—and the whole is far more than the sum of its parts. This is the realm of “unknown unknowns,” and it is the domain to which much of contemporary business has shifted.’ Organisations are complex. Trying to redesign them as if they are complicated doesn’t work.

3. The almost impossibility of changing the infrastructure, systems and processes that have been set up over decades to reflect a mechanistic/deterministic view of an organisational universe. As Professor Karen Carr states: ‘The challenge is to implement a systems world view from within organisations that have evolved from deterministic world views. … making it difficult to take a systems approach. Issues such as health, training, leadership and information management are addressed within different partitions …. Finding a way to get these different areas to interact in an organic manner is in itself a problem, given the [organisational] political, social and economic contexts.

Other reasons we discussed for the lack of systems thinking included: power dynamics (‘my bit is ok, why should I worry about yours?’), financial/resource constraints leading to prioritising some parts over others without thinking through the consequences, and short-term thinking – ‘let’s fix this fast and now’, and not knowing how to apply systems thinking.

Going back to the issue of tackling poverty, John Bird tells us, ‘We cannot simply carry on in this brainless, unconverging bit here and bit there’, and it’s the same for organisational issues. How do we then create the conditions for systems and complexity thinking to become a natural part of the way we look at problems?

Answering this question as if it were a complicated problem yields a bits and bobs answer for example, send leaders and managers on systems thinking programmes (look at the Open University’s courses Systems Thinking in Practice, or discuss and then pin up the poster Habits of a Systems Thinker, show David Snowden’s video ‘How to organise a children’s party’ that shows ‘the promise of complexity theory for organizations and government alike’.

Answering the question as if it were a complex problem yields other responses. Donella Meadows offers some thinking on how to do this in ‘Dancing with Systems’ (warning: this is not written in standard management speak) and in another Leverage Points: Places to Intervene in a System

Perhaps the most useful response to the question ‘how do we encourage organisational leaders to engage with complex and problematic organisational design situations and address them systemically or holistically, rather than individually and in compartments?’ is to do so in both a complicated and a complex way. Maybe then we would see system thinkers emerging and a big issue would be resolved. What’s your view? Let me know.

Image: Systems thinking 101