Numerous hospitals and health systems have adopted matrix organizational models in an effort to increase efficiency and reduce costs. But sometimes the opposite occurs.
In theory, the matrix model should accomplish these ends because authority is shared and aligned around key objectives. Matrix models can help hospital departments break out of traditional silos, creating a system in which multiple groups collaborate around important work in which they all have a stake. A well-implemented matrix structure can help distribute scarce resources across an organization and focus diverse talents around initiatives that demand collaboration, such as hospital-physician integration.
When the matrix model is not well implemented, however, organizations have experienced added costs, increased employee turnover, and an all-time high level of frustration as senior executives try to navigate countless dotted lines on the organization chart in search of true decision-making authority. Leaders who are held responsible for the bottom line and success of their organizations sometimes find they have no direct control over those doing the work. These leaders spend considerable time attempting to gain consensus among multiple groups-sometimes believing they've been successful, only to discover one more person who needs to weigh in. It may take so long to make decisions that an entirely different problem, even a crisis, arises in the interim-one that could have been avoided with a timely decision and that now requires a quick fix.
Poorly implemented matrix reporting relationships can misalign goals and mismatch authority and responsibility. Multiple reporting relationships can result in ambiguity and conflict for employees. In the end, dotted lines can simply become blurred lines, allowing performance to suffer. Leaders who thrive on autonomy and accountability will likely not stay long.
Succeeding with a Matrix Model
For a matrix model to function well, organizational leaders need to invest significant time and effort defining roles and responsibilities and ensuring that they are fully aligned with the organization's mission and vision. Employees need to know the boss (not bosses) for each situation, project, and setting. Individuals may be accountable to more than one boss, but not at the same time.
Leaders need to learn new skills to function in a matrix organization. They need to share decision making, enhance communication, and create a culture of collaboration. They need to entrust key decisions to project managers within the matrix management structure. They also need to be aware of any conflicts that exist between managers, which can hinder collaboration between units.
These new skills and behaviors are not easily learned. For many leaders, traits such as competitiveness are keys to success. Organizations should invest in training and coaching so that even experienced and successful leaders learn a new way to manage and relate to others within their organizations.
Employees also need to work outside their traditional silos, even if they would be more comfortable remaining within old boundaries, where they know their colleagues and bosses and understand the rules. Entry-level employees, in particular, tend to be uncomfortable with change. They may lack the interpersonal skills needed to collaborate with a new group of employees in uncertain settings. Training and investment in the labor force, as well as the executive suite, are necessary for matrix organizations to succeed.
Organizational performance suffers when responsibility for profit and loss becomes too diffuse. This misalignment can happen in matrix organizations, resulting in lack of accountability for results. Aligning leaders with responsibility for both revenues and expenses means expanding the budget/financial reporting methodology beyond traditional department boundaries.
For example, under a traditional leadership model, a typical budget would have a series of cost centers assigned to each leader, with financial reporting to match those areas of responsibility. In a matrix model, a leader might own certain cost centers and share ownership of others (see exhibit 1).
financial responsibility always should be distributed equally so that accountability for financial performance is equal among the leaders involved. Shared accountability forces increased communication and joint decision making, which should result in better outcomes for the organization.
Reaping the Benefits
When organizations succeed with matrix structures, significant positive outcomes usually result from employees sharing ideas and resources outside of silos. Employees transfer their loyalty from their bosses and units to the organization as a whole. Undiscerning resistance to change is overcome. New relationships are built, employees acquire new skills, and organizational performance improves.
Matrix-model organizations that are unable to achieve the needed culture change struggle with chronically poor performance and dysfunction. In those instances, senior executives should examine their organization charts and start erasing dotted lines. At the same time, they also should assess where accountability and authority are mismatched for achieving successful bottom-line performance.
Regardless of what format an organization chart takes, when visionary and courageous leaders are unencumbered by excessive structure, and are supported by great teams of employees, organizations excel.
MarieAnn North, FACMPE, is CEO, Posada Consulting, Charlotte, N.C. (MNorthTHG@aol.com).
Cheryl Coors is president, Coors Executive Resources, Charlotte, N.C. (email@example.com).
Publication Date: Friday, January 01, 2010