Networks versus Matrix
Shortly after I put my last entry online I read another McKinsey article (Harnessing the power of informal employee networks) from November 2007 which even more explicitly positions the formal network as a new model against the matrix organization.
There were some interesting elements that were put forward contributing to the dysfunction of a matrix organization going back to history. Matrix organizations worked well until the late 1980s because they were used sparingly and did not greatly confuse the hierarchical lines responsible for the success of the companies. As the work environment became more complex with the demands of globalization more matrix roles were created as many different perspectives needed to be integrated.
This led to more interactions and decisions to be handled overwhelming the matrix manager. Also the amount of knowledge and information exceeded personal capacities of any individual. In order to work horizontally across an organization employees found themselves confronted with searching through poorly connected organizational silos for the knowledge and collaborators they needed.
McKinsey did a study which discovered how much information and knowledge flows through formal networks against how little through official hierarchical and matrix structures.
So very simply a formal network can be established by splitting up the matrix inherent dual line reporting to one solid line remaining and the more functional oriented line substituted by a formal network that through better knowledge flow and quick relationship building is for instance far better suited for best practice sharing.
A clear owner of such a network is needed and the scope of activities need to be defined to avoid network overlaps. Most interestingly the article talks about a “servant leader” in this role as this individual is not a boss but a facilitator of interactions between members, responsible for the infrastructure (which requires a budget!), training, incentives for participation and contribution. So enough possibilities to influence the performance of the network to be held accountable for it. Very clearly these networks need to exist outside the hierarchical decision-making processes within the company.
All the value can be accelerated by having many different networks exist in parallel. Then there would be an effect of cross fertilization through employees being part of multiple communities.
I believe success is dependent on the buy in of the senior management of a company as structures need to be provided meaning serious investment is needed and on the other hand on the “servant leader” who needs to be charismatic and experienced in motivating employees to collaborative behavior.
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