Today, almost every organization is working in a matrix style in one way or another. The bigger the entities grow, the more need is seen for such complex structures – especially in global, multi-divisional organizations. Leaders have to deal with these types of structures – if they like it or not. A common complaint says that leading within the matrix causes pain and is incomparably more challenging than in straight hierarchic type organizations. Frequently leaders feel being victims of the matrix. The positive viewpoint: Levering the capability of leading within a matrix clearly becomes more and more a competitive advantage and can be a rewarding process for leaders.
Discussing how to manage matrix organizations, very often leaders are claiming that leadership culture is the key to success. This requires a closer look at the cultural issues and challenges in matrix organizations: Based on 15 years of research and practical work in the field we found out that the most crucial basic cultural assumption is: “Hierarchical power is not the fundamental and helpful paradigm in a matrix – it is RELATIONSHIPS and INFLUENCE”. This assumption may look simple, but it makes a huge difference with consequences for leadership capabilities like decision making, executing the job, innovating, providing strategic orientation etc. Leaders should honestly question their style and capabilities, discuss the shift from hierarchical power to relationship & influence paradigm and be open for learning new capabilities and thus changing the culture. The trick is to leave the “victim-state” behind and to take collective action for a positive cultural shift.
But how to go for it? It has proven very helpful to outline some fundamental cultural patterns that support the key assumption and show the path. Based on our research we identified six fundamental cultural patterns relevant to successfully lead matrix organizations:
1. BUILD “RELATIONSHIP-CAPITAL” – INVEST IN RELATIONSHIPS & TRUST
Relationship and trust are the basic “FUEL” to success of leading matrix organizations. Only strong and trusted relations across units and functions will make the work effective. Leaders are expected to massively and professionally invest in the necessary relationships. This investment can lead to what we like to call “RELATIONSHIP-CAPITAL” – the higher this capital is, the better the achievements earned in the matrix.
The MINDSET: Understand – outside your silo, team, area – who you need to work with. Build proactively relationships and trust with these people. DON’T WAIT FOR THEM.
2. INTERACTION OVER INFORMATION – PRACTICE BORDERLESS COMMUNICATION
Culture is based on communication – verbal and non-verbal. The key capability within the matrix organization is interactive cross border communication in order to manage the overarching issues and intersections well. Information flows are not as asymmetric as in a clear hierarchical organization – leaders need to accept and foster effective information sharing. In addition, communication never only comprises the delivery of information, interaction between the communicating parties is key. The challenge here is to identify the right communication partners, then initiate and build strong communicative bonds over the borders of the units.
The MINDSET: Deep believe in the power of open communication and dialogue as the underlying capability of matrix organizations.
3. LIVE THE NEW PARADIGM – PUT INFLUENCE OVER HIERARCHICAL POWER
In matrix roles, the accountability and responsibility often excel the formal power of leaders. Lacking formal power, influence is all you have got. We understand that building up influence is probably the most important matrix skill to develop. Especially those who own formal power today and derive their impact and performance from that fact, have to learn and experience new ways of getting things done. This is the premier league of matrix-leadership.
The MINDSET: Building “INFLUENCE EQUITY” is the equivalent to formal power. The more you own of this currency, the better you will manage the matrix.
4. UNDERSTAND THE KEY MATRIX MECHANIC – NEGOTIATION BASED DECISIONS
While influence is the currency of matrix organizations, negotiation is the lever for good decision making. Again, in such organizational environment where formal power is often not applicable, decisions must be based on balancing and trading the interests of different parties. With professional negotiation capabilities.
The MINDSET: Negotiation is the ONLY way to come to good decisions in matrix organization. The better we negotiate, the faster and the more effective we get.
5. FORGET BOLDNESS IN THE MATRIX – FOSTER REALISTIC GOAL ALIGNMENT
Competing goals and misalignments are unavoidable in matrix organizations – sometimes even intentional. To master the matrix, one must be artful in understanding such misalignments and brining it together in a productive way. Helpful here is a “Bigger Than You Are” attitude, focussing on the broader picture, on overarching goals and ambitions. The “AND” is more than the “OR”. It’s not “THEM” and “US” but “WE”.
The MINDSET: Not optimism and boldness but REALISM is the most important attitude when it comes to goal alignment in matrix organizations. Going in too optimistic will ultimately create too many conflicts in the situation of competing goals and interests.
6. CULTURAL CHANGE ALWAYS IS ABOUT BUILDING NEW CAPABILITIES – SO START LEARNING
Change in organizations requires new capabilities and mind-set from leaders and employees. Building new capabilities means LEARNING – thus one critical cultural pattern is openness towards learning new things.
The MINDSET: The basic mind-set for learning is humbleness, curiosity and willingness to change. The deep believe is that only by learning we are capable of changing things.
Leadership teams can work with these patterns to investigate their maturity and capability today.
Based on a fair assessment (team and individual) and gap analysis, a fruitful discussion can start. The intention would be to initiate a common learning journey, to work seriously and hard on building leadership capabilities. We use tools like “Leadership Capability Canvas” to jointly design such a journey together. And we always suggest powerful transformation techniques like “Peer to Peer Coaching”.
We want to close with an outlook: Today we – as organization designers and transformation consultants – are discussing future types of organizations. Dynamic markets, globalization and – most importantly – digitalization are changing the way we think. Visionaries like Frederic Laloux with his Teal Paradigm (in “Reinventing Organizations”) or Brian Robertson with his Holacracy concept for example are guiding the trend and direction. Future organizations will be much more self-directed, self-organized, decentral and agile. The cultural patterns discussed here are perfectly fitting in the tendency. Training to change towards this culture will be well invested with regard to future leadership capabilities.