Could your team benefit from matrix organization?

Every project is made up of lots of interlinked processes all happening at once. And overall success usually depends on how well you make all these things work together. Little projects have a small number of stages that you can probably complete without much prior planning. Bigger projects, on the other hand, require a little more thought. This is where matrix organization comes in, i.e., any situation where two or more structures are at play simultaneously.

In a matrix organization, reporting relationships are set up as a grid or matrix instead of the typical pyramid or tree hierarchy. And, rather than reporting to one person, employees generally report to two people: the functional manager and the project manager.

Who developed the matrix organization structure?

As you may have guessed, the history of the matrix organization structure isn’t a long one. The U.S. aerospace industry first developed it in the middle of the 20th century.

It first came about to reconcile the ever-growing need to process large amounts of data and increasingly complex tasks. As the industry grew and changed, more interdisciplinary projects arose, and there was more need to involve multiple specialists. Thus, the matrix was born from the need to have two managers on a project. And it’s only continuing to grow in popularity in the past half-century.

How a matrix organizational structure can help you

A matrix organizational structure will help you define the product and the function of the individuals producing it.

It’s especially useful in larger companies that already have a defined hierarchical structure in place, which could be an obstacle. Why? Because people have different capabilities and specialties.

For example, in a highly structured, top-down organization, the CEO usually makes the big decisions. But if your goal is to produce a new app, rather than put someone from senior management in charge simply because of their title, it’d be way smarter to hand the reins over to your top web developer, who will then work in tandem with the project manager.

Together, these two roles have a much better chance of success. The individuals in charge are more specialized and have a closer viewpoint, which means their understanding is clearer.

The matrix organization structure provides a new system — one that changes, depending on the project.

Pros and cons of a matrix organizational structure

As with every managerial technique, this approach may not be suitable for everyone or every situation. So before you take the leap, read through these advantages and disadvantages, which should help you decide whether it’s right for you.

The advantages:

• Greater flexibility: This is a more free, flexible way of working — one where structures shift according to the project. Communication is open because information needs to travel efficiently between the different teams.
• A more democratic workplace: Working this way breaks down traditional hierarchical barriers, making for a more dynamic environment where everyone feels equally important.
• More engaged employees: It’s nice to feel like your work makes a difference. Placing skilled workers in charge of projects allows them to widen their experience, gain a greater understanding of different areas of the business, and grow professionally. Once these individuals have learned these new skills, the organization will have a pool of capable workers it can rely on without spending additional budget on downtime or training.
• Greater efficiency: Teams can share resources, experts, and equipment across projects.

The downsides:

• Power struggles: As you’ve probably worked out, questions around authority can cause issues and ruffle features. If the managers are in disagreement or are competing for resources, it can be difficult to resolve because both have equal standing in this project. When this happens, conflict isn’t far behind.
• Communication issues: When two or more managers work in tandem, the team can be left wondering who’s in charge. This is especially true if they receive conflicting instructions or their roles aren’t clearly defined. When this happens, a communication breakdown could be just around the corner.
• Higher costs: Another downside is expenditure. Having multiple managers in a company — some of whom won’t be working all the time — can be a big budget-waster.

How to win at matrix organization

You can overcome all of the disadvantages listed above with proper planning. To have the biggest chance of success, your matrix organizational structure needs to hit the following three checkpoints:

1. Make it detailed, so everyone involved has a clear route ahead. But it’s not enough to just tell everyone in a meeting: The information needs to be readily accessible so employees can refer to it whenever they need to. Store it on your company server or on the cloud via your project management software.
2. Clearly communicate it across the organization so everyone understands the goal and how to reach it. This includes a clear reporting structure, an awareness of possible conflicts that might arise — and an open line of communication at all times.
3. It must be flexible because projects change. Alternative options and contingency plans help keep things running smoothly — even if something does go wrong.

Final thoughts

A matrix organization won’t be right for everyone or every project. If your company is small, then you’ll typically already have a flat structure where everyone helps everyone else. Similarly, if you’re working in a large organization but your project is small and short, then implementing a new structure probably won’t be worth the effort. For everything else, matrix organization is a smart choice. But only if you understand the risks and you’ve done prior work to mitigate any potential problems.

Make sure everyone has clearly defined roles and that resources are carefully allocated. Keep lines of communication open and make it easy for people to talk to each other — and invest in tools that can automate repetitive tasks and help everyone stay in touch. Cloud-based project management software is a must for busy projects because it allows you to share things like schedules, budget information, workflows, and project dependencies in one easily accessible place. This helps keep information flowing and fosters a collaborative atmosphere, which is exactly what you need to make matrix organization work for you.

This post was originally published on November 22, 2019, and updated most recently on May 26, 2021.