UK: Heller on management - Matrix management muddles. (2 of 2)

UK: Heller on management - Matrix management muddles. (2 of 2) - The article in the Harvard Business Review (July-August 1990) describes the matrix as an unmanageable recipe for dual reporting, proliferating channels of communication and overlapping resp

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Last Updated: 31 Aug 2010

The article in the Harvard Business Review (July-August 1990) describes the matrix as an unmanageable recipe for dual reporting, proliferating channels of communication and overlapping responsibilities. What you get as a result is "turf battles and a loss of accountability" - and a situation where "business CEOs have not felt able to influence ICI policy significantly". That is the diagnosis in an interview with ICI chairman Sir Denys Henderson; the illness is to be cured by giving the CEOs "an input through the PPC".

And what is that? Another committee, this time dealing with "Performance and Policy". It is going to apply more rigorous monitoring to performance, meeting just before the group quarterly financial results are due: each CEO will face the chairman, the finance director, the three executive directors who look after ICI "businesses", and the general manager of finance. The CEOs "will be able to propose subjects for the agenda", which marks a change, though not necessarily a decisive one. Man proposes, but who disposes?

The plot (and the matrix) thickens when you examine the businesses. ICI's enormous portfolio has been crammed into fewer and fewer packages, each under a CEO: the latest move shoved together advanced materials, films and polyurethanes, acrylics, fibres and nylon. Dr Bill Madden has the task of using these materials to build a global business "large enough to stand alone, with a common technical thread and clear internal synergy to provide a strategic focus" - and the best of luck: for many of the sub-businesses serve utterly different customers with utterly different products.

So what is the answer? The matrix, naturally. The "businesses" become mini-ICIs, with product, geographical and functional dimensions and maybe a dozen and a half distinct real businesses: this immediately produces the best part of 600 interfaces between a dozen or so top executives. Inevitably they spend most of their time dealing with each other. That aptly describes the situation in many boardrooms. Their inhabitants are highly attentive: but like those at Hewlett-Packard (and perhaps ICI), they are not attending to the right things.

Corporate superstructures have no divine right to exist. They are only justified if they add value, which truly cannot be done by oversight or overview. Clear line structures with undivided responsibilities and a non-operational board are the only answer. Muddle matters with the matrix and, down below, you will find the typical outcome: the frustration of potential leaders is fearful and the denigration of top managements is loud and swelling. And if any of the latter think that this picture is untrue, they have to answer a simple question: how would they know?

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