Organisational structure: Matrix Organisation harms your company
Organisation structure is extremely important for the success of any company. In this blog post I will explore how an organisation structure built in the style of a matrix organisation can harm your company. Before I continue, I want to clarify that there are some companies that are able to apply this organisation structure with success—Spotify, for example.
Spotify’s document about tribes and guilds became extremely popular (you can download it here) in the Agile community. If you take a look into their organisation structure, you will see they are using matrix organisation, but in my opinion this is not the best approach. I still believe they were not able to get rid of it because of political and human reasons, but that is another story, one not directly relevant to this post.
Before I continue, I would like to explain what an organisation structure based in a matrix organisation is, just to make sure that you fully understand what I want to say. In simple terms, a matrix organisation is an organisation where vertical projects are staffed with several individuals from different parts of the company belonging to several different departments. This approach is extremely common nowadays when companies start to implement Agile.
Agile asks for cross-functional teams, and therefore companies start to build teams around different people with different skills within the organisation. At first glance, this seems like an appealing concept, but as I will explain later on, the promised effect does not work out as intended. Below you can find a picture that represents an organisation structure based on the matrix method:
Over the years, I have worked with many companies where this organisation structure is present; based on my experience, I will outline the following problems common to it:
Extremely Political Environment
It is not uncommon for organisations with this kind of setup to suffer from political issues. The team in this situation is a bunch of individuals from different parts of the organisation that are brought together to deliver something. My experience tells me the problem is not with team members but with line managers. If everything is going well, line managers tend to say the success is a result of their team members
If something really bad happens, line managers tend to say the problems is due to the other departments. They enter into “save my ass” mode, trying to cover their ass instead of helping the organisation to find the problem.
Blame Culture
I believe this is partly the result of the previous problem. When something goes wrong, people within different departments try to save their asses and basically blame everyone other than themselves. Unfortunately, I see this happen too often.
Horizontal Line interference
Over the span of my career, I’ve seen this happen in almost every company where I worked: Moving towards Agile is something difficult for most of the middle managers. There are clear roles for Product Owners, Scrum Masters, and Team Members, but nothing for Agile Managers. In a previous blog post, I tried to explain the role of an Agile Manager—but still, I believe this is something quite challenging to navigate for many managers.
Managers try to do their best to help people, but in my humble opinion, most of the time their actions in these situations cause more harm than good. They try to give “one on one” help to people regarding career development, they try to establish team events, and they try to do many other things, but in reality, all these activities actually remove people’s focus from their product team.
Another typical example is the practice of having all these line managers in all kinds of meetings, for example: dailies, planning, reviews, etc., etc. Because they want to see what their guys are doing, they go to these meetings, but unfortunately most of them cannot keep their mouthes shut, and therefore they end up sabotaging the discussion and making all these meetings quite inefficient.
Decisions take a lot of time to be made
Of course, in theory, the team should own all their decisions, but with so many chefs in the kitchen, I can guarantee that any decision that ought to take just few minutes will take weeks of negotiation with this kind of organisation structure—Not productive at all.
Individual Goals mess
People that follow my work know how I love personal goals, especially the ones attached to individual performance. In this organisation structure, I believe we have the right setup to launch the company into chaos and drain people´s individual motivation.
Let me explain: Having several horizontal line managers implies (in most organisations) that each different person will have a different goal or goals defined by his/her manager.
Now, if you imagine that in a team of 7, everyone has 2 goals, for example this means that we have a total of 14 individual goals that have nothing to do with the team goal, which actually is the most important one.
Of course, you can say the team as a whole will have their own goal, and all the individual goals will end up aligned with the team goal, but do you really believe that with so many different managers, different people, and different goals, people will be aligned with the team goals? Good luck on that ;). If you want to know more about how personal individual goals destroy companies, take a look at my previous blog posts on the subject:
Rewards may destroy improvement efforts in our companies
Goals and Objectives attached to monetary rewards destroy your MVP!!!
Rewards are a great way to Punish people
Employee reward discourage risk-taking
SMART objectives are DUMB objectives!!!
Interference with new hirings
Several years ago I had the opportunity to be part of a sad story. At that time I was Scrum Master and the team was recruiting a developer; of course, we all looked for senior developers. We had several interviews with several candidates but only one guy seemed to be a perfect fit for our team. We all agreed he was our man. We communicated with everyone and said he should be hired.
A couple of days later, the head of software development informed us that HE had chosen another guy. So basically, a guy who was not part of our team, that would not work on a daily basis with the new developer, who did not have a clue about what we needed, decided the future of the whole team. Later on, we found out that he was simply trying to achieve his personal yearly goal (saving money for the department).
Our companies are full of such cases, demonstrating how the horizontal line manages without understanding their place in Agile Organisations, and how this can actually harm the company a great deal.
In my next blog post, I will explain how you should build a team in order to avoid all of these problems.
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Cheers,
Luis
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