Most big companies have adopted matrix structure since it allows to integrate very easily local, regional and global levels. Besides helping organizations to create alignment, matrix structures provide a global vision which enables organizations to centralize manufacturing or administrative functions. Moreover, matrixial organizations can perform process outsourcing at all levels while they create scale economies which empower them in the negotiations with their business partners. Although matrixial organizations bring many benefits from a global perspective including the reporting flow, they also create organizational complexity as well as ambiguity in relation to business rules, criteria and objectives. Therefore, is essential for global organizations with matrix structures to create local functional integration to drive business performance. However, since this integration is beyond the matrix structure, organizations must find innovative ways to build functional relationships between people, processes and technology at local level to produce the business results that will be afterwards reported to the regional and global levels.

Value and work streams: Voice of customers and suppliers

First and foremost, the organization needs to define its E2E value streams through which the operational processes relate within Supply Chain to create and deliver value to customers. Moreover, administrative processes work streams must be defined to create functional relationships between not only the areas but also their leaders, teams and ERPs. Once the value and work streams were defined, the relationships between areas within the matrix were established as well. Furthermore, each area will have suppliers from which receives inputs and customers to which delivers outputs. In addition to the inputs and outputs specifications, the current performance of both suppliers and customers should be not only assessed to identify gaps but also discussed to reach agreements to address those gaps. A simple interview can be enough to capture the voice of customers and suppliers as well as to establish a performance baseline. Although problem solving tools and capabilities are important not only identify the issues but also develop solutions, value and work streams integration through OLAs (Operating Level Agreement) with suppliers and SLAs (Service Level Agreement) with customers, will heavily rely on openness, active listening and negotiation skills.

Standard and streamline processes: Voice of the people

Once the functional integration between process is established through OLAs and SLAs, each area within the matrix has gained knowledge about the influence of external factors and its own delivery performance. However, the knowledge about the process operational effectiveness won’t come from outside but from within. Firstly, the operational effectiveness baseline should be established with data in terms of availability, performance and right first time. Secondly, the pain points must be identified considering people, process and technology throughout each of the process steps. Moreover, process mapping would allow to capture not only the process current state but also its diversity throughout the different perspectives and points of views. In this case, also tools and methodologies are important to capture the voice of the process, although people’s engagement during the process mapping will be essential not only to accurate assess the process current state but also to bring meaningful discussions to gain knowledge and understanding. Furthermore, pain point’s root cause analysis must encompass technology, people and processes, to be able afterwards to develop countermeasures with SMEs to build also accountability with key stakeholders from the involved areas within the organization. Although the end is to have an standard and streamline process, the path to reach that goal with stakeholders within and outside the process is essential for sustainability.

Building functional relationships within matrix organizations

Although matrix structures provide undoubtfully benefits from a global perspective, they present as well local challenges to drive performance. Moreover, to overcome these challenges the organizations need to come out with a Lean approach outside the formal structure framework provided by the matrix where the people and its relationships will play an essential role. Furthermore, E2E value and work streams will deeply rely upon relationships between areas in the matrixial structure as well as to have standard and streamline processes will depend on relationships within area. Whereas the hierarchical dependencies and performance reviews reinforced the matrixial structure, the functional relationships must be built upon leadership, influence and empowerment. What is more, in many cases the matrixial structure creates competency through KPIs between the same areas that must collaborate from a functional perspective. Furthermore, there the leadership style and behaviours promoted by matrix structure are not those needed for functional integration. Finally, to build E2E functional relationships, organizations must balance the downside effects of the matrixial structure through Lean leadership development, although to what extent this can be achieve will depend on both organizational culture and climate. As Robert Johnson pointed out: “Leadership is the ability to influence people and motivate them to do what needs to be done to accomplish a goal, vision, or mission.”

Thanks for Reading.

Marcelo Sauro is an internationally experienced performance and improvement senior manager. He holds an Executive MBA and Master of Science degrees and has helped people and organizations to transform themselves. Not only he led E2E transformations in Global Business Services, R&D, Supply Chain and Finance organizations at all levels within the LATAM and EMEA Regions, but he is also experienced in several industries including Life Science, Healthcare, Insurance, Fintech, Technology, Telecoms, FMCG, Chemicals, Automotive, Energy and Mining. Since 2015, he has been researching and developing content in agile and resilience through Value Ways, while working under contract for customers such as MetLife, Novartis, Vertiv (Emerson NP) and Experian among others. Previously, he worked for more than 7 years as Master Black Belt for a LATAM-based consulting group, which had ASQ, Qualtec and Oriel as business partners. Prior to that, he worked for more than 10 years at BASF and GSK in positions of growing responsibility in the area of Operational Excellence. Marcelo is currently working at Ferring's “International PharmaScience Center” (IPC) for the Global R&D organization in Copenhagen. To find out more please visit www.value-ways.com.

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