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80% of Executives Say They're Ditching Hierarchical Org Structures

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Tue Jul 12 2016

80% of Executives Say They're Ditching Hierarchical Org Structures
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The way many organizations work is changing. At most companies, gone are the days when you’d report to a boss, who reported to their boss, who reported to another boss, and so on.

According to a recent Gallup survey, 80 percent of organizations are leaving traditional hierarchical structures for matrixed ones. Instead of being organized by business functions, companies are organized by networks of teams that support common objectives, such as missions, projects, or customers. In fact, Gallup reports that at least 84 percent of U.S. employees are “matrixed” to some extent, meaning they serve on multiple teams. These teams enjoy strong flexibility and autonomy; they report to one another, and workers can move around to support the needs of different projects. The teams also set their own goals and make decisions to support the company’s mission as a whole.

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However, the grass isn’t always greener on the matrixed side of the organization structure chart. As flexible and nimble as teams can be, Gallup reports that matrixed employees typically deal with blurrier roles and expectations than their non-matrixed peers. The matrix structure can also make it difficult to hold individuals accountable. This means that the impact of a bad employee might be felt in small ways across a number of matrixed teams, rather than in a large but concentrated way, as in a hierarchical structure.

Despite these concerns, Gallup endorses the matrix movement, suggesting that well-managed and properly assembled teams can improve productivity, profitability, and customer perceptions of service. Some recommendations from Gallup that can help matrixed organizations, and also non-matrixed organizations that struggle with defining roles and expectations, include:

  • Keep your expectations clear. Managers should frequently speak with their reports about their roles, and how those roles advance the organization’s goals. These conversations can eliminate ambiguity and remind employees of their purpose.  

  • Keep teams small. Teams of 10 or fewer are typically more engaged than larger ones. Large teams can suffer from erroneous meetings, slow decision making, and unclear communications. 

  • Keep teams focused. Teams with one goal typically function more effectively than teams with multiple or unrelated objectives.

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