Successful companies grow and become more complex, they have complex products and complex, matrix and virtual organization structures.
These more connected organizations are necessary to success but those connections can also cause delay, cost and dissatisfaction.
In this video Kevan Hall asks “are companies too connected to be effective?”
If you agree you might also enjoy our podcast Too much cooperation going on? or our book Speed Leadfaster, simpler ways to manage people projects and teams in complex companies
Many of our clients are currently focusing on creating more integrated IT functions. This tends to create a more complex IT organization and requires different skills if we are not to create delay, cost and dissatisfaction.
There are three main drivers for this
Cost savings – companies are pursuing cost savings in all areas but this is also about making sure we get the best return from our current and historic IT investments in productivity and workflow improvements. In tough times all functions are expected to deliver more for less.
Sharing of scarce IT resources, A less integrated structure can lead to valuable IT resources and skills being “locked up” within a single business unit or geography silo. In an integrated structure, they are more accessible to the whole organisation.
Control and security. Centralisation is a common response to tough economic times as organizations try to exercise more control and to create a greater feeling of security, real or imagined, at the centre.
Driven by these and other factors, IT functions are becoming more complex.
Local IT resources are coming increasingly under the control of central functions but at the same time often retain local reporting lines in a matrix structure. Global projects and priorities may compete or even conflict with local requirements and IT people are working with colleagues in different locations, timezones and cultures, often with limited face to face contact.
In 16 years of working with organizations in this area, we have identified a number of factors that make this a particular challenge for IT.
IT are often exposed to these challenges of integration faster and earlier than other functions. For example, IT people may be tasked with introducing a common CRM system or a particular business process before other functions are ready to operate in such an integrated way. Internal cost savings from common systems can even take precedence over the local need expressed by other functions. In many cases IT have to fight the integration battle when more local functions, particularly sales, are resistant.
The IT organisation does tend to focus quite strongly on the technology and the technical skills and sometimes forget the “soft skills” that makes complex organizations and projects work.
A lot of the value of IT comes from consistency and introducing local variability adds cost. IT investments look good when they create consistency around the world. However, the world often resists uniformity, sometimes for good reasons, sometimes because of local politics or resistance to the centre. Other functions, particularly sales, can be much less integrated and require more local variability.
The increasing complexity and integration of IT happens at three levels
Within the IT function itself.
More complex customers.
More complex projects involving more third parties.
Nice article on Cisco’s view of The Dynamic Networked Organization. In it a Cisco insider talks about their experiences of collaboration and creating a networked organization – see my comments at the end of the piece.
An interesting insight came up in discussion with one of our clients recently about the role of central functions and business units in a matrix organisation.
A very experienced manager mentioned that he felt that part of the challenge was that central functions played two roles. Sometimes they were standard setters and sometimes they were service providers.
As a standard setter for example, if you are in finance, you may be setting certain financial, governance and expense guidelines – these may be imposed on business units (usually) for good reasons.
At the same time finance may also be a service provider to the Business Units – perhaps providing a service centre for transactions like bill paying.
In these 2 roles the balance of power is very different. As a standard setter you might need to be inflexible and use some power to impose common solutions. As a service provider you need to be flexible and responsive to your customers.
Because of these dual roles business may be resistant to service provision by central functions because they fear that the central functions will be inflexible, won’t be open to discussion, and they will have little control over them.
These may be just the behaviours that the central functions have demonstrated in their role as standard setter.
The two roles are very different, the behaviours that we use in one may not be appropriate for the behaviours in the other, and this can lead to confusion and resistance.
It can lead to central standards being ignored by business units who think that the central functions are simply a service provider to them, or it can lead to a resistance to central services because business units fear that an inflexible and powerful centre will not listen to their responses.
As so often in matrix management challenges the essence of the issue here is control.
When a function exercises control it tends to undermine trust, and this can go both ways, when central functions in “standard setter” mode exercise too much central control they undermine trust within the business units. Similarly, when the business units don’t trust the central functions the central functions may feel excluded and be tempted to try and impose higher levels of control. Business units may also miss out on opportunities to have central services performed more efficiently.
Everyone likes to be in control, nobody likes to be controlled.
We are working with several clients at the moment on matrix management implementations, and we are interviewing their line managers about the key challenges of matrix management.
One of the key challenges that comes up is moving from traditional authority and control in getting things done to getting things done through influence and networks.
Many managers feel deeply uncomfortable with this, and in particular being held accountable for things they don’t fully control. In some organizations it has become a mantra “no accountability without control” and is actually used to prevent the growth of horizontal connections across the organisation.
But accountability and control are different things and, in a matrix, accountabilities are often shared.
It is rare for people to have sole control over the areas they are accountable for. Even the most powerful business unit head relies on functional specialists and central services they don’t fully control to reach their goals.
One of my clients remarked that when you get to a very senior level in their organization networking, alliances and influence become even more important “we are all big dogs at this level so relying on hierarchy and power just don’t work”.
Good managers have always relied on a range of tools and skills. They know that falling back on control and power are often counterproductive to achieving the goals they are accountable for.
In a matrix, we will experience accountability without full control regularly so we need to develop the skills to make this work.
What do you think, do you need control to be accountable?
Regular business travel is rarely the glamorous experience that non-travellers imagine. Many of us have returned from a sweaty, delayed, frustrating trip to work long hours and go for dinner with strangers to hear our colleagues say “Oh you went to Berlin – how lovely”.
But in recent years and months a combination of intrusive security, ash clouds, airline strikes and other factors have made travel even more unpleasant.
Manage more, travel less
So perhaps now is the time to work on the skills you need to find practical alternatives to travel – it can save cost, carbon and frustration – and often you can get even more done.
