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Issue_7 Matrix

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Editorial

Issue_7 Matrix

Heitger Consulting

Matrix

Matrix Reloaded – Or is it a fear to let go?! The Matrix – you either love it or hate it. On the one hand side, it can be agonizing, paralyzing, tear you apart and wear out your strengths. On the other hand side, it is the recipe for international companies to respond to the complexity of global markets. In the 21st century we are experiencing a reload of the matrix, which differs from its time of bloom in the 1970s and 80s: in those times it was about becoming flexible, whilst today it is important – to do the exact opposite – to centralise, enhance efficiency and increase standards – by limiting the amount of freedom. This is not easy, especially on a personal level. Sometimes managers feel demoted and robbed of their former responsibilities. Nevertheless, "global customers" expect to receive the same level of quality and level of processes from one and the same company all over the world. The critics ask: For what price? Certainly the matrix structure is a demanding organizational form that requires a number of preconditions, but is it a long-term solution, or only a temporary one? What are the exact pre-conditions to ensure its success? How can team members in various locations and times zones be led on a virtual level? These are the questions addressed in this issue. Your Barbara Heitger and the Heitger Consulting Team

3 Strategy Permanent or just for the short-run – the matrix 8 Change The years of freedom are over – Matrix Reloaded 13 Leadership So close and yet so far – leadership on a virtual level 17 Pioneers Discussing the future with experts

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Strategy

Issue_7 Matrix

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Permanent or just for the short-run – the Matrix

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he matrix is one of the most complex organizational structures there are" – Mathias Gollwitzer, honorary professor and for many years manager in the aerospace and automobile industry, knows what it means to work within a Matrix. We spoke to him and other organisational experts from UniCredit Group and Deutsche Telekom right up to PepsiCo about their everyday experiences in order to discover what it takes as a "participant in a matrix" and what the limitations and opportunities of this organizational structure are. The concept "double-lines" remains controversial: since it is a highly complex structure, it is in fact ideally suited for international companies that operate in global markets. However, its greatest strength is at the same time its greatest weakness: staff members within the matrix are often the ones to bear the consequences of such a complex structure. They feel torn apart, over-worked isolated or demoted. Sometimes they have all these feelings at once. Therefore, the question is: what is the matrix capable of in the long run? In what ways does it need to be further developed? What have been the strategic targets that have encouraged a revival of the matrix as an organisational structure at the beginning of the 21st century? • Internationalisation: international customers expect businesses to offer the same performance and quality of their offers. • Compliance & Governance: the increasing number of regulations (SOA, Anti Bribery, etc.) need to be addressed by companies.

• More efficient resource-allocation: consistent standards in core processes and products should not only strengthen their own performance profile, but also enhance the efficiency and usefulness of their own know-how and promote further innovative developments throughout the corporation. • Control: the need for centralized leadership and control intensifies as markets become increasingly volatile and complex. This strategic driver is one of the greatest traps for matrix organizations which are currently celebrating their renaissance. Enhanced centralized control can quickly lead to a more internal orientation and away from local markets. This is when the downside of the matrix becomes evident. The matrix organization – an overview The distinguishing feature of the matrix is that two or more organizational criteria can be valid at the same time (eg. by product and region) and thereby multiply the number of managers: while staff members formerly only had one boss, they have at least two or sometimes even more in a matrix. An employee is linked to his/her first superior by a so-called "solid line" and to the other by a "dotted line". Ultimate target agreements, personnel development topics, resource management and efficiency, as well as standards and "rules of the game" are coordinated along the "solid line". This boss is the strict superior – to him, a staff member communicates "how" his roles are arranged. In contrast, a staff member communicates practical matters with another superior along the "dotted line", to agree on "what" needs to

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Strategy

Issue_7 Matrix

Permanent or just for the short-run – the Matrix

be done. Businesses in the aerospace industry were the first to implement the complex matrix structure. In the meantime, it has established itself in almost every industry: industrial production, banking, insurance, IT, communication, as well as hospitals and professional service firms. All over the world, businesses have chosen the matrix structure

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because it should enhance flexibility and establish faster decision-making processes, whilst at the same time ensuring standards and efficiency. The "division of power" between both sides of the matrix can appear very different – which is evident in the example involving projects and organizational functions.

Source: Gottlieb, Marvin R., The Matrix Organization Reloaded, Greenwood Publishers 2007

What do the experts say? — Matrix managers talk about the Matrix-Life Wulf Schönberg, Vice President Organization Development Corporate / HR Business Partner, Deutsche Telekom AG My personal opinion, derived from a series of professional experiences: I discovered that there has often been a leadership vacuum in a number of different organizations. Therefore, many organizations with a one-dimensional leadership structure – frequently focusing upon a single function – were restructured to a more centralized leadership and matrix organization. Often the advantages of a matrix are quickly visible: both viewpoints are incorporated and there is an ongoing and fruitful lively discussion in the company. What is the functional point of view? What point of view does society have? Of course, the downside is that people Page 4


Strategy Permanent or just for the short-run – the Matrix

Issue_7 Matrix

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always have to point fingers these days. Clear regulations and agreements through vetorights and other means, are therefore extremely important. In practice, it is frequently very complicated to reach an agreement, because it implies a loss of power on someone’s behalf. I consider the responsibility of staff members to be a big challenge for the matrix. When the matrix is too rigorously implemented, this can lead to staff member being overworked. Ultimately, decisions are then delegated to staff members due to the lack of decisions made on the managerial level. Furthermore, it is very important to clearly define HR instruments in the matrix. This is because total standstill and stagnation occur when there are no clear regulations regarding target agreements and selection decisions. Sanction mechanisms should be established in order to use them in practice. Leadership in a matrix system requires management to have different capabilities: in particular, they need to be able to resolve conflicts, have a knack at incorporating interests into various different dimensions and to influence individuals with sound arguments without bringing the matter of hierarchy into play. The downside: a high usage of resources – decisions are reached at a slower pace and with less certainty. Personally, I do not consider the matrix organizational form to be a solution to all problems. When a company has the time to work through all the issues, then it can certainly be a good choice – but in the time of the crisis, do we really have the time for continuous negotiations? I think that the matrix is a good temporary solution until we have decided upon a certain leadership model – one with which we have a higher gain in efficiency. The cost of those many negotiations are too high with a matrix that is permanently in place, since it also slows down the response mechanism of a company.

Irene Quaranta, Senior HR Manager, PepsiCo Germany Matrix structures have existed at PepsiCo long before my time and I have already worked at this company for seven years. However, in the last years its relevance has risen even more: in the past, we primarily tackled local challenges as a German market unit within a cross-functional expert team. Today it is also about operating as a company on a global scale. Internal and external expectations are becoming increasingly more complex. We must provide one another with knowledge that can be an advantage in various countries. The question of having a global company, are a daily concern to us. Our German unit has succeeded in adopting the matrix lifestyle, because we have a cooperative decision-making approach, and we know and trust one another. We share a history and all participants are committed to their market and their company. In international business activities we have an invaluable network, because we all have similar challenges to battle with. On the whole, PepsiCo is very adept to change, we face transformations daily – are experienced in wrenching out structures. In my view, the most important conditions for a well-functioning matrix organization are: joint goals, a resilient network, a cooperative leadership style and involving participants into decisions. I consider finding a balance between interests, as is the case when managing interests of function-based departments and country offices, to be a fundamental challenge. Due to the matrix, individual leadership successes also take a back-seat. The day-to-day work for our management team is becoming more complex and time-intensive. This Page 5


Strategy Permanent or just for the short-run – the Matrix

Issue_7 Matrix

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requires a great deal of personal strength and composure. "Influence and Impact" and "Organisational Savvy" are fundamental leadership capabilities: recognizing structures and acting as a moderator and designer of decision-making processes, establishing sincere trust in every direction and promoting optimism and a solution-orientation within the team. In spite of intensive interactive processes, I consider securing a sense of empowerment and providing our managers room to maneuver to be the greatest challenges of the Matrix. One of the greatest risks of the matrix: the responsibility and response mechanisms are becoming increasingly more complex, decision-making processes are slowing down and as a result management does not consider there to be enough room for maneuver which reduces the appeal of their roles and positions.

Prof. Dr. Mathias Gollwitzer, honorary professor and for many years, manager in the aerospace as well as the automobile industry For a number of years, the matrix organisational structure has increasingly been adopted by large-scale German corporations. The implementation of such a structure is intended to eliminate management deficits, speed up decision-making processes and make all administrative functions more efficient. So far this has worked rather well. However, a great deal is expected of employees working in a matrix structure. I consider the strengths of the matrix be formalising and standardising processes, enhancing the possibility for better internal benchmarking and optimising resource allocation through centralised response mechanisms. Regarding the risks of the matrix, I perceive there to be a danger for the administration, a prolonged decision-making and a high degree of complexity due to the multi-dimensional leadership design. In contrast to a divisional leadership structure, a typical manager in a matrix structure requires a more differentiated personality profile to direct the double line of command. One has to balance out differing viewpoints of two immediate superiors and independent expert units addressing the same issue, whenever it is necessary. One should pay attention to political aspects early on, develop a certain degree of sensitivity and regularly communicate topics. As a matrix member it becomes more and more important to play the role of a presenter who communicates all the facets of a topic and conveys a personal view in a concise manner before exiting. This could quickly lead to communication difficulties that then delay processes. Diplomatic tact is what is required. The "matrix personality" apparently functions in a less independent manner with the corresponding self-image, as a coordinator, that can be integrated and is willing to reach an agreement. Some matrix members could be inclined to avoid making decisions, and instead decide to delegate these, build up a wall for protection and then wait until any problematic issues blow by. A matrix with at least two chains-of-command and with several lines of communication to separate expert groups is a more transparent structure than a divisional structure and there is a greater risk of "talk" than in a "one-dimensional" leadership structure. This continuous transparency therefore involves a risk of becoming reluctant to address "sensitive" topics. A sense of lost “home-comfort” could be a side-effect of the matrix organizational system. In a simpler functional or divisional organizational structure one can develop a closer relationship with ones superior and occasionally "brainstorm" some topics with him. This becomes less possible in a matrix – one feels increasingly less "at home", especially when Page 6


Strategy Permanent or just for the short-run – the Matrix

Issue_7 Matrix

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there is a large physical distance between oneself and ones superiors. Several staff members in management lose some significant decision-making responsibilities in the shift to a matrix. This can be frustrating. Previously one had chosen or trained-up individuals who engaged in their classic leadership role with entrepreneurial spirit and competence and excelled. In the shift to a matrix, such individuals are deprived of their differentiating characteristics and are trimmed of their decision-making competences. How does one cope with such a situation? Now, either one can accept it, and "adapt", escape to personal resignation or leave the company. Therefore, leadership development is a topic that requires special attention. As referred to earlier, a matrix needs individuals that possess coordination strengths, who can manoeuvre well in cooperation cycles, are prepared to face conflicts and are highly independent. With regards to the future: I am convinced that in some parts of the industry the matrix structure will be perceived as the better and more efficient structure for quite some time. Change management should pay careful attention to the diverse expectations of the personality profiles in management. The highest levels of management, positioned at edges of the matrix, need to be especially well-prepared for their special responsibility over their corresponding employees in the matrix.

Mag. Susanne Wendler, Head of Corporates Austria, UniCredit Bank Austria AG, Wien The matrix was implemented at UniCredit Group about six years ago. The merger leading to the international corporation UniCredit Group, had made it crucial to streamline various complex organizations and products. I consider the matrix structure to be ideal for such restructuring phases: diverse topics can be identified, collected and resolved. The matrix is successful when divisions share the same sense of goal-orientation, when the individuals possess the highest level of communication capabilities and do not have a false "sense of grandeur". If there should be one who goes off on his own, the matrix will instantly fail. Mistakes, irritations and conflicts quickly emerge when these ideal circumstances are not present. Furthermore, there are too many equally important crisis situations which are "strenuous" in their nature, that require quick responses and actions. In every case the question arises, when has the matrix reached its end and when does there need to be new beginning? When has the time come, for the matrix structures to be replaced by what would be considered to be a better organizational structure?

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Change

Issue_7 Matrix

Heitger Consulting

The years of freedom are over – Matrix Reloaded

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he matrix sparks diverging views. For some it is the only sensible organizational structure in a time of globalisation and complexity – it is the only structure that can internalize external market complexities and simultaneously maintain professional standards and ensure efficiency, at least on a theoretical level. For others it encourages conflicts and can lead to organizational paralysis through multiplied pressures and continuous strain. Then again others merely consider it to be a part-time solution. Since its time of bloom in the 1970s and 1980s there has been a distinct change: in the past it used to be about shaking off inhibiting hierarchies and increasing flexibility, while the motivations for a matrix structure today are the exact opposite. Now it is about reversing decentralised freedoms to a system with more structure and control. In the last few years, too much was directed in a loose and decentralised manner, so that there is now a need for more efficiency, fewer redundancies, more control and centralised directions – so say the supporters of the matrix in the 21st century. Matrix – the beginning and the time of bloom Its time of bloom was in the 80s. During that period companies implemented a "matrix" with a grid-like structure because they realised that hierarchical structures had reached their limit. Instead of having a linear power and decision-making layout, the matrix enforced an "organized power-play" or less provocative "systematized negotiations", and in place of a single boss there were two or more: lines of command had a multi-dimen-

sional layout, in order to tackle the different business dimensions at the same time. "A matrix organizational form is a grid-like organizational structure that allows a company to address multiple business dimensions using multiple command structures." The matrix originated in the American space industry in the 60s. Later, the idea of a project-based system was taken-up and "matrix management" was implemented in companies. Especially in the context of the 70s, when technical and administrative processes became increasingly computerized and competition was growing on an international scale, one recognized that functionbased teams could respond more effectively to the rapidly changing demand of the market place. One side of the matrix addresses the "what" and takes care of the practical leadership ("dotted line") e.g. the team task. The other side of the matrix addresses the "how" (capabilities, guidelines, …) and involved the official line of command ("solid line"). The invention of the "dotted vs. solid line" emerged from the need to develop project orientated work instead of departmentbased thinking and negotiations instead of mere commands. The result of this change in the way of thinking was immense: selfresponsibility, initiative, flexibility, knowledge-sharing and innovation in day-to-day business. In this way, the matrix established two organization principles of equal importance – on a personal level it results in "one staff member – two bosses", whilst on a factual level it implies more organized constructive conflicts. Page 8


Change The years of freedom are over – Matrix Reloaded

Issue_7 Matrix

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Matrix – its dark-side The theoretical ideal scenario of the matrix is usually a lot prettier than it is in reality: a lack of clarity over responsibilities, continuous frictions, strenuous conflicts and partially, overwhelming administrative apparatuses. Due to these evident weaknesses within the structure, the "matrix" came into disrepute in the 90s. They formed part system – but companies had had enough.

And so, they searched for alternatives. It was self-evident that its strengths involved extensive "freedoms", but the weaknesses arising from "multi-dimensionality" far outweighed them. Therefore, matrix structures became the prelude of lateral organizational structures, such as strategic fields of business organization, regional or network organizations which were highly decentralized and autonomous.

Matrix Strengths

Matrix Weaknesses

• Has a focus on global markets and yet remains small and functional • Staff members pay attention to a larger number of organizational goals • Provides innovative solutions for complex and technical problems • Staff members develop an organization-wide focus and thereby heighten their responsibility and decision-making capabilities • Enables a quick and easy transfer of resources • Heightens the information flow along lateral lines of communication • Ensures standards, efficiency and high quality throughout the company including the local divisions

• Defies the principle that responsibility translates to power over decision making • Defies the principle that each employee only has one superior • Quickly leads to discrepancies and conflicts • Increases costs due to the need for additional members in management and administration • Heightens the likeliness of resistance to change, as employees associate the matrix to a loss of their former status, authority and control • Leads to competition over authority and escalation (too much leadership), to stand-still (superiors can no longer make decisions) or to an “every man for himself” regime

Matrix – Reloaded The matrix structure requires a number of preconditions and is yet highly effective. For international companies today, their objective is to limit redundancies and to respond to rapidly expanding globalization, but this time with more standards, efficiency and control instead of extensive freedoms. "Matrix – Reloaded" is the result of years of decentralization and independent development processes. Unlike the early "liberating period" of the matrix in the 80s, there is currently a need for recentralization and re-standardization. The "global consumer" wants a company to present itself as one and the same company with a consistent level of performance and a consistent ser-

vice portfolio all over the world. In addition, a company has to address topics such as cost-cutting and increases in efficiency, such as compliance regulations, which have to be adhered everywhere in the world, and securing professional standards and high quality on a global scale. These are the factors that motivate companies to re-adopt matrix structures in the 21st century. The matrix is a structure that combines cooperative processes with hierarchy. Therefore, it is very challenging to successfully implement a matrix structure. Speaking from our own experience, these are the most important ingredients for such a successful implementation:

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Change

Issue_7 Matrix

The years of freedom are over – Matrix Reloaded

• Collective future objectives and targets, are at the core of the leadership team – and thereby succeed in establishing a connection to the day-to-day business. These targets ensure productive negotiations, which naturally emerge from the contradictions engrained within the matrix. • Appreciation, trust and a high quality of cooperation as elements of the leadership culture – negotiations only succeed when partners as a result of and in spite of the hierarchy conflicts, which are inherent in the structure of the matrix, can also resolve the situation well on a personal level. In order to be able to do so, individuals, managers and the culture of the company need to invest into it. • Matrix capabilities of managers – the leadership team understands and creates the special political and personal dimensions involved, which are at the same time negotiated between partners and numerous hierarchies. • Fundamental contract for implementing the matrix – the diverse roles of the matrix are to be dealt with and agreed to along the core processes – in the simplest manner possible with room for negotiation and decision-making in the day-to-day business. Fine-tuning works best as a "work in progress" with organized monitoring mechanisms.

Product 1

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• Developing matrix target systems, that incorporate specific inputs by staff members that also reflect the end-target – target agreement additions and KPI’s that make each side of the matrix only responsible for its own contribution, are insufficient and are not a good basis for negotiations and integration efforts that need to be developed in a matrix. • Platforms for further development. In order for the matrix to remain agile and to ensure that the "lessons learned" are used for its own professionalization and innovation, it is useful for the participants to invest into "Sharing and Developing" e.g. large annual events. Methods – managing the matrix 1. Negotiating target points! The greatest challenge of the matrix structure is to coordinate the various matrix dimensions, such as functions, products, customers, regions, etc. Assigned targets in these different dimensions sometimes compete or collide with one another, e.g. product versus region, and processes that should help to coordinate these are often inadequate. "Negotiating" may be effective – but it can be strenuous and nerve-wracking in the long term. Moreover, there is a lack of synchronization and timing coordination which affect the work routine and the targets. What can be done about it?

Product 2

Product 3

Function 1 Function 2 Function 3 Total

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Total


Change The years of freedom are over – Matrix Reloaded

a. Instruments such as the “cascading spreadsheet tool” help to provide processes with an overview, in order to ensure better coordination: b. Communicating the corporate vision continuously with staff members, can work wonders. Even though every assigned target may be different and may even contradict one another, they are nevertheless assigned for the same purpose. For this reason Barry Oshrys "Four P’s" are optimal: • • • •

PURPOSE: Why are we doing this? PICTURE: What will the future look like? PLAN: What is the path? PARTICIPATION: How am I involved?

2. Clarifying roles and responsibilities for core processes! The usual matrix madness: Who is and who is not responsible for what? : Uncertainties regarding one’s responsibilities – can be compromised by imprecise process and job descriptions, but also by the nature of the thing itself and because roles have definitions with multiple meanings. This leads to tensions and sometimes to frustration among those whom it concerns. It can sometimes occur that staff members do not know who the boss is and who needs to be contacted with certain information. What could help? a. Clear guidelines and roles, such as responsibility parameters for standard processes! b. Create contact points, in order to share information: meetings, newsletters … c. Use instruments such as "RAPID": RAPID stands for "Recommend, Agree, Perform, Input and Decide" and describes the five most important roles participating within the different parts of the process:

Issue_7 Matrix

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• Agree! You have veto-power: You can decide upon recommendations with a simple "yes" or a "no". Making use of a veto can trigger a debate between yourself and those making the recommendations. However, this could lead to a catastrophic end-result • Perform! As soon as a decision is made, a person or a group is given the responsibility to put these into action. These can often be the same people that came up with the proposal in the first place. • Input! Involve others to provide inputs. Their advice, their knowledge or their opinions are often valuable in making the final decision. • Decide! The person in charge is the official decisionmaker. He or she is ultimately legally responsible and has the authority to dismantle obstacles in decision-making processes. 3. Unclear balance of power The crux of the matrix: it waters down the classical image of a superior. What was once considered to be a fact, "boss = responsibility", is no longer a certainty in a matrix structure. Sometimes, a person with leadership responsibility does not possess decision-making power – an outcome of the dual coordination structure. Of course this often has the effect that there is confusion over who has the ultimate decision-making power and decisions get delayed. Also, there is often a lack of clarity over the various areas of responsibility. In addition, people in leadership continue to be unaccustomed with sharing power over decision-making. What should be done?

• Recommend! Make a suggestion, get inputs and prepare the relevant data and facts for them – in order to be able to make a proper decision.

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Change The years of freedom are over – Matrix Reloaded

Exerting influence without decision-making power: • Defending ideas Offer useful proposals and recommendations. Prepare a solid ground for argumentation. • Influencing Others Develop a convincing and attractive idea. Chose a suitable influential strategy and put it into practice! • Exert influence on an organisational level Identify and define question marks, such as expectations and targets of wide-spanning stakeholder interest groups. Awaken enthusiasm in others, with which to remind of fundamental values and targets. 4. Implementing the „Matrix-Guardian“! It might sound strange, but it pays off: The "guardian of the matrix" watches over the operational performance of the matrix in

Issue_7 Matrix

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companies. The accompanying image: to picture oneself as an "entrepreneur in an enterprise" and as a "leader and a follower" at the same time. Surprisingly, only few companies possess a measuring system, which can evaluate the performance of staff members in the matrix structure. What could help? • Motivation structures and attractions need to be established in a matrix system. • A monitoring process helps to uncover possible problems in the matrix with matters involving "Performance". • Ensuring that the matrix guardian possesses supervisory assistance and decisionmaking power in order to step into action. • Maintaining the objectivity of the matrix guardian and avoiding that it will suffer from "political" pressure

Sources: Challenges and Strategies of Matrix Organizations. Human Resource Planning 28.1./Thomas Sy, College of Business Administration, California State University, Long Beach, Laura Sue D’ Annunzio, A.T. Kearny Inc.

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Leadership

Issue_7 Matrix

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So close and yet so far – a virtual guide

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he world has become smaller. Time and space are no longer a barrier – thanks to globalisation, Blackberrys and the internet. For companies doing business on an international scale, management on a virtual level has become a challenge, and at the same time, an opportunity. Especially matrix structures strengthen the leadership of teams whose members are usually not under the same roof and not even located in the same country. However, even though it is childs-play to set up technological linkages, it remains difficult to maintain close and lively interaction among participants. The fact is that (with or without technological possibilities): when team members do not meet in the office on a weekly basis, do not have a short exchange of words in the corridor, do not meet for lunch or cannot even see, hear and smell the one another on an "everyday basis", it becomes hard to know where one stands in a relationship. "Out of sight, out of mind" – this also applies when working in an international matrix. Nevertheless, it is especially important for matrix members to: know their team, trust one another and be able to speak to one another – "face to face" not just once a year. Isolation can result quickly and leads to the death of every form of communication, thereby putting sand into the matrixworks. Therefore, how can one direct an international matrix on a virtual level? "I’d be surprised if anyone has it figured out yet", said the executive of a major oil company about the art of management on

a virtual level. The ability of a company to set up a team of qualified individuals and get it up and running quickly and effectively, regardless of where they are located and whether they are members of the company or externally hired, is highly demanding and at the same time determines the success of any international company. Teamwork on a virtual level is always very demanding. Virtual cooperation in a matrix is even more so, because matrix structures are highly dependent upon stable and developed professional relations, in which case any tensions can be addressed in a productive manner. A matrix is frustrating – Why? An evident problem of the matrix involves its greatest capital: it frustrates its own staff members. As famously stated by "the Godfather" when he was clarifying the state of affairs to his followers "it’s not personal, it’s strictly business". In the same vein, a choice has to be made in a matrix between efficiency and personal identification. Individuals in leading positions that have had extensive freedoms and decision-making power before a company was restructured, often experience a significant loss in a matrix. They often have fewer responsibilities at headquarters, as well as on a "global scale" – on a local level they lose their former room to manoeuvre. They also feel as if they have been demoted within the new structure, which focuses upon centralizing. To be given less responsibilities so suddenly, and on a global scale, can lead to frustration as well as feeling slowed-down by internal standards and discussions when wishing to opti-

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Leadership So close and yet so far – a virtual guide

mize to the needs of local markets. A double loss. Mathias Gollwitzer, honorary professor and manager in the aerospace as well as the automobile industry, describes how difficult it can be for those who are affected to cope with the adjustments. Many put up a fight, while others leave the company. It is therefore hardly surprising that that the new selection criteria is fundamentally different to the old one: in the past, the personality of a manager needed to involve independence and a readiness to carry responsibilities, while today there is a need for one who possesses political tact and communication skills. The matrix tears you apart – what should be done? In addition, oldies and newcomers feel torn between two or more bosses and find it hard to give way to management on a virtual level and a continuous state of transparency. The matrix is incredibly demanding. The question is: how can one approach it in such a way that it can be invigorating?

Issue_7 Matrix

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• Stable fundamental rules of the game: the most important thing is to agree on how the different parts of the matrix work and therefore to have an informal contract setting the various roles and rules of the game. • Future prospects: It is necessary to set clear targets and even more so set a joint vision of the future – "desired future": a third element, that unites and is something that all can relate to when constructive conflicts in the matrix need to be resolved. • Stable working relations: trust, courage, and open-mindedness are the most important requirements for a well-functioning communication. It is essential to invest into reliable relationships, since a matrix is an organizational structure based upon conflict and negotiation in which power struggles are to be expected. The ability to "negotiate" instead of being unwilling to "budge" becomes crucial at this point. • Political skill and integrity: since a specific matrix partner stands behind each organizational unit, there is a need for political skill and integrity.

Super 8 – Lessons for virtual managers in the international matrix Eight “Key-Lessons” for successful virtual management – according to a study of the Harvard Management Update: 1. Focus on People & Teambuilding Even though we live in the age of technology: management on a virtual level is about managing people, not just budgets. Today it is more important than ever, for management to invest time into their employees, including their needs and their complaints, especially and most importantly when they are located entirely somewhere else. Corporations tend to neglect this and someone who cannot manage a team in a conventional sense, certainly cannot do so on a virtual level. 2. Create Passion & Commitment A virtual team needs a clear mission. The most common reason that virtual teams fail is because they lack a clearly defined shared timeframe. Every team member needs to know what, how and why he/she is expected to contribute. The process functions best when everyone becomes involved: a kick-off meeting with all participants at the very beginning is an absolute "must". This is the point which determines the success – it combines involvement, sense-making, "desired future", images and relationship development.

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Leadership So close and yet so far – a virtual guide

Issue_7 Matrix

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3. Express Everything Clearly Misunderstandings, assumptions, and suspicions – these can even spoil the best team work. When team members do not meet one another personally and instead, only work with each other on a virtual level, there are often no opportunities to identify differences early on. Naturally, everyone makes assumptions and in the end all that remains is disappointment. Conflicts and arguments can emerge which may lead to the failure of the project. Therefore: express everything clearly and define the meaning of certain terms such as "quality". More-​ over: ask questions and clearly communicate any personal assumptions! Anyone who has worked via Telcos before can confirm the importance of doing so. 4. Communicate, Communicate The fundamental rule: never allow a team member to isolate himself! Instead, communicate on a daily basis: Call, email, fax or post something on the project website, etc. The team manager should continuously encourage everyone to communicate with one another, even when there is no urgency. Trust among team members is highly valuable – because individuals that trust one another are more productive. Also, joint technological platforms and virtual meeting rooms can help to maintain the flow of communication. During these liaisons, a main focus should be to establish organizational rules of the game, which will regularly assist in maintaining coordination (e.g. “daily scrum” derived from agile project management could be ideally suited) as well as the inter-linking capabilities of existing systems and processes. These are the following professional software-solutions that can be adopted depending on the purpose: Microsoft Lync and GoToMeeting (for Telcos und video conferences), 37 Signals Basecamp (for project management) and Jive (as an internal communication platform). Additionally, simple skype-telcos and with in-room-solutions such as Cisco Tele-presence continue to be used. 5. Find Allies A continuous problem in virtual teams is that there is a shortage of time and that team members are located in various time zones. Often, several team members in a matrix are part of a number of other teams, so that projects have to compete with one another for their time. Therefore it is best for a manager to liaise with the managers of these other projects. Winning the support of a "sponsor" at the top levels of management can greatly help one’s own project and often make the seemingly "impossible" possible (e.g. when it concerns borrowing a research team a long distance away). 6. Reward, not just with Money The success of a project is often closely linked to the reward. However, what if it does not come to that? What if some team members have done a great job in spite of a disappointing end result? Therefore, it is useful to adopt a separate bonus and motivation system which is linked to the successes and efforts of each individual team member in the project. Furthermore, rewards do not always have to involve "money". Each individual member could have become involved in a virtual team for a number of different reasons: for internal employees it could be rewarding to have contributed to the success of an organizational product – but what about externally hired individuals, such as R&D experts from universities? At the very beginning of the project it is advisable to thematically specify the important lesson that members should take away with them each day.

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Leadership So close and yet so far – a virtual guide

Issue_7 Matrix

Heitger Consulting

7. Observe and Manage Conflict Conflicts are unavoidable in virtual teams as well as in regular team constructions. The difference is that by cooperating on a virtual level it is easier for a member to be overlooked and dismissed. This is why it is especially important to continuously keep an eye on members and to be ready to provide an immediate response. For instance, if a conflict should emerge in an exchange of emails, it is important make a call: "A person’s voice is more effective than an email." A person’s voice is better at expressing the exact meaning of a message than when the words are merely written – such as when a team member writes "yes" in a written email, but is in fact dissatisfied. 8. Learn and Use it Next Time! One never stops learning! Every matrix experience as a joint work-effort on a virtual level demonstrates how to do it better or differently next time. Especially for virtual team members, it is important for them to see and discover their contribution to the final outcome. This is why an analysis of the lessons learned is a first step to prepare for the next time.

Sources: Davis M., Stanley/Lawrence R., Paul: Problems of a Matrix-Organization, Havard Business Review, 1978.

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Pioneers

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Heitger Consulting

Video: conversing with experts on future predictions Which trends should be followed to renew strategies, transformations and leadership in the future? What does progress really mean and how can diverse perspectives on this matter become more productive? What happens when "corporates" of a classical sense meet with "creatives"? On our idea platform "Future with imaginativeness 2011", Barbara Heitger has discussed these questions with three experts on future developments: Eric Pรถttschacher (shape-shifters), Jonathan Imme (until we see new land, since 2012 ignore gravity) und Stefan Bergheim (Centre for societal progress). You can find the recording of this discussion on our YouTube channel: www.youtube.com/user/heitgerconsulting

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Contact

Issue_7 Matrix

Heitger Consulting GmbH SchwarzspanierstraรŸe 15/1/5 A 1090 Wien T +43 1 4093646 F +43 1 4093646-90 E office@heitgerconsulting.com www.heitgerconsulting.com Issue is a publication of Heitger Consulting GmbH and can be directly accessed at issue.heitgerconsulting.com. In case you have not yet received the Issue, you can subscribe to it at issue.heitgerconsulting.com. Copyright by Heitger Consulting, 2012 Publisher: Barbara Heitger Editors: Delna Antia, Mira Kolenc, Matthias Pรถll Authors: Delna Antia, Barbara Heitger Design: Bueronardin Illustration: Katharina Ralser IT: Alois Gstรถttner Video recording: Christan Venosa

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Heitger Consulting


Issue_7 Matrix English Version