Org Design, Org Strategy, Org structure

Org Design Models Series: What's a Matrix Structure?

Expert author: Clayton Moulynox

What is a matrix organisation structure?

We'll tell you what it isn't - a Matrix structure has nothing to do with working in some alternate-reality (sorry to disappoint the Keanu Reeves fans). What we're dealing with here are cross-functional teams. This isn't new - these types of teams have existed across many industries for many years. But, more recently, tech companies like Spotify, Steam and Zappos have introduced new terms like squads, pods, circles and tribes in to the organizational design vernacular, invigorating interest in cross-functional matrix-structured teams.

Matrix structures are common in organizations delivering many different projects which require different types of expertise across a business. This structure helps to ensure efficiency and focus on project delivery while attempting to reduce bureaucracy and red tape. Essentially, it cuts across departments and groups people together in a "virtual team" with clear objectives and a rhythm of operation.

Template: This template org includes examples of matrixed teams, also known as "virtual teams".

How to know you have a matrix structure

The tell-tale sign you have a matrix org structure is when people are reporting to two bosses at the same time. Now, maybe that sounds like a nightmare for some (not you, of course... you love all your bosses) but let's unpack that a little.

You might have heard the terms "solid line" and "dotted line" when it comes to manager and direct report relationships. Solid line generally refers to a traditional relationship between a manager and their direct reports within the organizational team they manage. It's the more formal relationship you'd expect with a manager. Dotted line generally refers to the relationship between a manager and a team member within a virtual cross-functional type team. That manager has the accountability of delivering on objectives that are the responsibility of everyone in the virtual team, and so gives direction and feedback to those team members in the context of the project it owns.

In a matrix structure it's typical to have a solid-line report and a dotted-line report. This has some benefits.

And some drawbacks.

Advantages of a matrix organisation structure

Here's a hypothetical example: Let's say an employee - let's call her Ruth - is part of the corporate marketing department and also sits within a product go-to-market virtual team, which includes representatives from product, sales, support, engineering and pro-services.

While Ruth is acting in the best interests of the virtual team, she's also aware of the processes, procedures, objectives and limitations of the corporate marketing department. When the leader of the virtual team (Ruth's dotted line manager) directs Ruth to do something that's not aligned to how corporate marketing would typically do things, she can provide this feedback and advise how it would typically be done.

Alternatively, she can go back to the corporate marketing team and suggest a new, potentially better, way of doing things that will support both her virtual team and wider org. The benefit here is alignment across company policies and procedures rather than teams "going it alone" and replicating things that other parts of the business already have sorted (ever worked in a company where every team uses a different project management tool or a different outsourced advertising agency? That's what often happens in non-matrix structures).

Disadvantages of a matrix organisation structure

The common downside of a matrix structure is closely related with company culture. If the leadership culture of a company is very competitive, secretive and overly-political, then authority-related issues inevitably occur. It ends up with role-conflict where a solid line manager and dotted line manager continually give their report conflicting directives. The employee becomes stuck in the middle of a hierarchical power struggle which is completely unproductive.

How to create a matrix structure org chart 

Typically, org charts are one dimensional - and structures like a matrix structure are hard to illustrate.

In this 5 minute demo, we show how cross-functional teams - along with accountabilities, roles and responsibilities - can be represented in Functionly.




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