Today’s matrix organisation is broken and the consequence is that what we now define as Leadership is actually factional Politics, much like the Australian public saw with the recent Labour governments of Rudd and Gillard from 2007 to 2010.
Let’s start with the matrix …
The simple matrix organisation was conceived in the 1970’s as a way to get business units and geographies to coordinate and work better in what was seen to be the increasing globalisation of business. The structure was designed around restrictions that either no longer exist or are less relevant now. For example you needed to balance the global BU perspective with the local country view(like tax, trade) and
, since global travel was difficult, a balance was created that forced the local country head to cooperate with the BU head. Today, with the modern habit of being always connected, always messaging, always visible and always online, the country commercial aspects of transactions can be incorporated into online systems, debate and discussion happens over unified conferencing systems and long, complex supply chains are increasingly automated.
Even more relevant is the emergence of Asia as a driver of commerce and product definition for the western world. Vijay Govindarajan labels this Reverse Innovation and we now see the potential for the roles of BU as “product designer” vs country unit as “manufacturers agent” to be reversed. It is possible for country units to design global products for the global BU to act as the selling agent for (especially with online sales).
This has the potential to reverse Leadership roles, in the sense that the Country Unit head is now asking for standardisation and control over the supply chain whereas the BU is asking for more freedom to sell and deliver as they see appropriate.
When Leadership roles get reversed additional stress gets created in relationships. Using the 2010 Australian Labour leadership coup as a model for what happens (my apologies to those unfamiliar with our local politics) the result can be that the individuals concerned spend more time bolstering their positions and undermining each other than designing and enacting policy.
There is a famous John Oliver interview about Australia’s decision to introduce gun control where he tricks the political lobbyist into saying that the most important job for a politician is to get themselves re-elected (see YouTube around 2 mins in).
I propose that, as the world of global business starts to change more rapidly than organisations can cope, as the distribution of work shifts automation to machines at the same time empowering knowledge workers to take more control over the “soft” decisioning skills needed to run business, the role of the leader as a connector, enabler and orchestrator across all aspects of business increases.
If the leader does not embrace this new role then they run the risk of falling into having to play factional politics and may end up in a situation like Julia Gillard and Kevin Rudd.