How do you succeed when your team does not report to you ?

The review meeting was getting hot and interesting; the function head was being questioned on the lack of leadership and ability to influence business units to follow defined standards; after all he had defined the standards and formulated implementation guidelines. Then why was he not able to get the business to follow them ? Weren’t the standards touted as industry benchmark, leading edge best practices, and emerging technologies that would put the group in leadership position locally and among the best globally ?

Matrix organizations have interesting group dynamics; there is functional reporting normally a dotted line to the department head and a straight line reporting typically to business unit in a diversified business group or geographical unit like a country head in a multinational company. In almost all cases the straight line drives the agenda for the person with the dotted line is left to drive synergies, cost optimization, standards, governance models, and the unified agenda across business units/countries.

For the newly inducted CIO it was not the first time working in a matrix structure, his earlier avatar had clearly defined boundaries for each role. At every node of the matrix the accountabilities were commensurate to the authority vested and influence expected. He had thrived in the position that helped bring value to both sides; his managers – straight line and dotted – acknowledged the contribution and maturity. Teams within his span of control as well as the matrix into which he reported enjoyed good relationships.

He took the role for its larger span of control, a different industry and domain, the challenge and the opportunities the new role presented and off course monetary value. Overall it appeared to be a great jump from his prior assignment which had reached a plateau. Reality hit him hard on his head when he met his peers and collective boss – the CEO in the first management meeting. The structure was unique to him and the dynamics hitherto unknown, made his skin crawl on his ability to create professional success.

Each group function head played two roles: the first to set strategy, direction and define standards that the group was expected to follow. This part was easy for most of the CXOs and function heads who were knowledgeable and well recognized as high performers in the industry. The group of experts thus depended on the partner ecosystem to help them craft the solutions and processes that were expected to be followed by business units; implementation was also left to the respective business unit functional heads.

Business functional teams were not obligated to follow directives or policies defined by the group; they could almost get away with anarchy. Matrix reporting had created a structure that the straight line manager could override the dotted or define alternate path for his business unit. It would appear to be a ceremonial position with a lot of responsibility but no authority to control outcomes, a fact that did not surface during the interview. Results were expected from the titular heads to ensure that the group has synergies and commonality.

The specific case really did not matter, it required a different structure and approach to solve the problem at hand. The Group CIO reasoned it out with the Group CEO and other peers in the room to highlight limitations the structure imposed; he also pointed out cases where mandates were followed, the group heads had ensured that respective members were subservient or underqualified thus open to listening and following diktats. The problem it created was larger than the current issue being discussed with suboptimal talent.

Making some sense to those present, the CIO pushed forth the agenda to unify the team; while the structure could be amended over a period of time, he gained acceptance to the idea and way of working. Step by step he worked on the antagonists to the idea, nudging, pushing, helping them win, he brought them to neutral ground within 6 months. A surge of activity followed with the group now harmonized and working with agility and synergizing effort, they reduced individual budget allocations and time to market.

Is the model replicable ? The answer is yes though requiring significant effort beyond normal for the leader to bring everyone to common and shared objectives. Instances can be found widespread of failure to capitalize on such an opportunity, accepting destiny and remaining an Advisor whose knowledge and expertise stays underleveraged by enterprises. Power struggles are always detrimental to progress, it would serve leaders and corporations well to recognize these before they become a malaise for the company.

The Matrix

Not too long ago there was a CIO who was involved in a cultural clash upwards and sideways in a matrix organization. He supported multiple diverse business units across multiple geographies; the business units had CIOs reporting into the respective CEOs, they had limited accountability to the CIO. The CIO reported to the Group CFO locally and the regional CIO functionally; the corporate IT function under the leadership of the CIO supported all the business units across the geographies.

The CIO had taken over a team of submissive staff who never challenged the business CIO demands for fear of conflict. While the overall matrix was a bit complex with differing size and profitability of business entities, the equilibrium was largely maintained with some give and take between the business units and corporate functions. Chargeback was based on revenue as well as headcount; there was occasional rumbling and murmuring which was subdued before it could raise an ugly head.

So when the CIO met the business units CXOs he was surprised at their aggression and attitudes; it was justified that the business team will generate the demand and the corporate will take care of the supply. Corporate IT was expected to take orders based on what the business had decided as the direction and strategy to deliver the systems and technology. It would have worked well except that the timelines were rarely reasonable even when Corporate IT tried very hard.

Corporate IT was also responsible for BAU systems, the data centre, applications and networking. The divide reached morbid peaks during budget discussions; your cost is too high, business cannot afford to pay increases every year; find efficiency was the mandate. Scraping the bottom did not reveal much and that was unacceptable to the business. If business is not growing, how can the expense grow ? Fair point as any was, with business seeing a downturn, it is imperative to cut cost.

The difference was that the business IT budgets grew while the cut was imposed on CIT budgets. This led to frustration and thus the CIO sought arbitration from his boss the Group CFO. That is when things started going out of hand; Business CIOs along with their CEOs represented that we are a Profit Centre while you are a Cost Centre; we pay for your existence and thus have the right to determine how you work while you cannot challenge how we allocate resources. Ouch !

Determined not to lose his temper the CIO silently looked at the CFO who gravely looked at his phone avoiding eye contact. With no help available, the CIO took the challenge head-on and suggested open book costing to get constructive feedback on what can be optimized. This was rejected upfront that it was not for business to run operational systems. Smiling the CIO offered a handover of all BAU systems to respective business units to run and transfer resources too.

Taken aback the group looked at each other; the CFO rose from his slumber to pacify and resolve; he suggested that the groups step down from their positions and create a working model that does not create conflict. The open book model was agreed to with benchmarks with the external world. This was deemed an acceptable compromise. His words on being a team and the need to work in harmony appeared hollow to everyone, which he too realized.

This is not a normal scenario in every matrix organization but some parts play out in every company. It is difficult to align direction when measurement criteria are disjointed. The open acknowledgement of team work towards success ensures that producers and consumers do not see each other that way; rather they work to create an ecosystem that motivates progress. Having been part of a few matrix structures, I believe that finally the culture of the company (read CEO/Head) will determine success.

If you have been a part of a matrix and have stories to share, I would love to hear them.