The Matrix Decision

Blog Post A Culture that Fuels Our Strategy

Help! I’m in a matrix organization. Who makes this decision?

Decision making in a matrix organization when not proactive can bring a once nimble, high-performing organization to its proverbial knees. You don’t have to wonder what people in a matrix feel about the structure. Love it or hate it, they are not reluctant to express their point of view. The intent of a matrix structure is to coordinate activities, eliminate silos to better serve external customers and/or stakeholders, and create efficiencies to take advantage of economy of scale. Yet, when one person has two (or more) distinct reporting lines, it is easy to predict that challenges will come in aligning the constituencies around priorities and the best course of action to be taken.

While accountabilities and responsibilities are often well-defined, decision-making can be overlooked. Moreover, decision rights do not always intuitively follow accountabilities. That is an opportunity for inefficiency as well as employee dissatisfaction. Insigniam’s 2014 Middle Management Survey showed that 50% of middle managers cite decision-making being taken out of their hands as their primary job frustration.

So, what’s the solution? A well-defined protocol for decision making and clearly identified decision rights.

Create greater workability by having the right people engaged at the right time for the right decision. Engage a systematic approach to define decision rights beginning at the top and cascading that effort down. Starting at the top is essential for two reasons: 1) the executive team needs to choose what decisions warrant their time and attention and where they want to empower the organization to make decisions, and, 2) there is structure and discipline needed to be able to live into changes in decision rights and decision-making forums. Without executive endorsement and leadership, it is doomed to failure before it even begins.

Types of decisions to consider when defining decision rights:

  • Financial
  • Safety
  • Compliance
  • Strategy
  • New markets
  • New products
  • New business models
  • Talent
  • Facilities/Capital Investment

Once decision rights have been put in place, any changes to the organizational design or strategy at a macro scale trigger the need to revisit them. Decision rights are designed within a certain context and that may be seen as 1) the intent of the organization or how they will win in business; and 2) the structure or how the organization works together to fulfill on the intent. Alter either of the variables and decision rights must be reexamined.

When done well, decision rights yield a stratification wherein tactical or operational decisions are pushed down into the organization and strategic or longer term decisions are reserved for the top levels. While this may be obvious, it is not always practiced, especially in organizations that have had a history of explosive growth. In organizations where executives have ‘come up’ through organic growth, they had to wear many hats and be involved at both a tactical and strategic level–whatever is required to keep the enterprise moving. While that design makes sense in organizations of a certain size, age, and level of complexity, it creates gridlock in enterprises when senior management’s involvement is required before decisions can be made. Well-designed decision rights and practices around decision-making in an organization allow work to flow by providing a reliable structure and empowers employees at all levels to make their maximum contribution.