MANAGING CONFLICT IN A MATRIX

Transcription

1 MANAGING CONFLICT IN A MATRIX By Amy Kates and Greg Kesler To be published in MWorld (American Management Association magazine) in 2011 For years, leaders have tried to create organizations where complexity and tension are minimized. The matrix, when used, is considered a necessary evil. But this may not be the right approach in our new era of global competition. Does your company have more than one product line? Do you sell into complex markets? Do you manage people in multiple geographies? If so, you are likely to have a complex strategy with a fairly complicated organization. The new competency for business leaders and the human resource professionals who support them in designing, developing, and staffing their organizations is to understand and harness the inherent tensions in these complex organizations. We find that the fear of conflict and tension comes from two sources. First, managers are afraid to engage in issues that can t be resolved because there is no strategic clarity. Second, it is natural to try to steer clear of disagreements that might damage personal and working relationships. As a result, many managers avoid tough issues, deal with them behind closed doors, escalate too often, or, worst of all, compromise and sub-optimize decisions and outcomes. The unfortunate reality is that complex strategies are built on competing objectives, and tension can t be avoided. For example: Geographically based managers keep healthy pressure on their peers in global product units to pay attention to local customer needs and to be more responsive with quicker solutions Page 1

2 Global product leaders focus on preserving the value of a brand worldwide by driving common positioning, messaging, and strict brand standards and pricing Staff functions (e.g., HR, IT, engineering) make certain that global technical skill sets meet enterprise standards and that the business units are investing in talent development New business development teams (for innovation) and emerging-market leaders (e.g. China) compete for budget with developed market leaders to make certain that future growth platforms get adequate attention and funding The goal should be to promote creativity by surfacing these competing points of view and then making trade-off decisions based on a clear framework. Through our research and work with clients executing multi-dimensional strategies around the world, we have identified a range of practices that are fundamental for introducing and managing conflict effectively. Four are worth highlighting: 1. Senior management courage to articulate the strategic trade-offs 2. No solid and dotted line discussions 3. Hire people who are comfortable with conflict 4. Investment in the HR systems that support the matrix 1. Senior management courage to articulate the strategic trade-offs Strategy is about making choices. It is a statement of what objectives will be pursued and how, but it is also a statement of what opportunities no matter how attractive will be passed by. Most companies emphasize where they will invest capital, talent, management attention. They are usually less explicit with regard to which parts of the organization are necessary but not competitive differentiators. Typically, around the leadership table all parts of the business are Page 2

3 given equal attention and all voices equal weight. Most leadership teams keep a fiction of equality of peers. The strategy should indicate and leaders should be comfortable articulating the circumstances under which some parts of the organization will win conflicts. For example, an account executive for a food manufacturer is negotiating a contract with a regional supermarket chain. The account strategy is to gain shelf space and build volume to compete against strong store and local brands. The account executive wants to offer an attractive pricing package. The corporate finance and product management leaders, however, have set national pricing guard rails based on protecting the brand equity. Pricing for this customer would be outside of these parameters. Both sides can argue a persuasive case. But the right decision, whatever it may be, cannot be reached unless senior leadership has set the rules for which dimension of the organization will prevail in this scenario. The key is to articulate the implications of the strategy on day-to-day business decisions before these dilemmas fall in the laps of lower level managers. When managers have to fight it out and then end up escalating the conflict anyway, trust and working relationships are eroded. An effective matrix starts with senior leaders with the courage to acknowledge the power balance in the organization. 2. No solid and dotted line discussions In a matrix the issue of who has a dotted line and who has a solid line frequently arises. A solid line is a direct reporting relationship implying the usual objective setting, supervisory, and performance management relationship that a manager has with a direct report. A dotted line is taken to mean something weaker. With a dotted line, the manager may have input into the Page 3

4 activities of the staff member and influence over consequences but not in the same way as a traditional supervisor. The practical implication is that if requests come from both managers, the person reporting to them both will respond to the solid line manager first. This can create conflict between the two managers or between one of the managers and the staff member. The tensions that arise with trying to manage up two or more bosses is one of the most frequently cited frustrations of people working in a matrix. At the same time, with most organizations today running lean, few managers like to share their resources with peers. In order to avoid such situations and the game playing that dotted and solid line discussions spur, it is best if all managers sharing resources in complex organizations act as if they have dotted lines downward. In other words, assume that the staff member in the matrixed position has been given other priorities from other managers that need to be identified and perhaps reset before more work is given out. This approach creates a mindset that all the talent in the organization is a shared resource and needs to be managed that way. The matrix doesn t work when managers think primarily in terms of owning their teams. On the other hand, anyone with more than one manager should assume that all their reporting lines upward are solid. Each manager s request should be given equal importance. When work objectives are at odds or time is limited, the staff member needs to proactively highlight the conflict and be sure that priorities are reset in the interests of the organization, not based on assumed relative importance of each manager s agenda. Working in a matrix requires a strong set of interpersonal skills. These include relationship building, managing up and agenda alignment, style flexibility, and influence, which are all foundational to personal and organizational success. Page 4

5 3. Hire people who are comfortable with conflict We see too many executives that change their organization design to align to a new strategy but staff it by reshuffling legacy managers. The executive then wonders why performance lags behind the promise of the strategy and the organization design. The problem is not that the incumbent staff doesn t understand the change or isn t willing to work within the new organizational expectations. Many times they really can t. Mid-career managers who have worked within and been successful leading a functional organization or a largely autonomous business unit have been rewarded and promoted for a particular set of competencies and way of working. It may be unreasonable to ask them to switch to a whole new managerial mindset and skill set. Training, coaching, and new reward systems can help. But many organizations find that moving to a new organizational configuration that is built on some assumption of creative conflict requires at least some new players. Managers need to be selected for either demonstrated experience in a collaborative environment or a propensity for the behaviors that support collaboration. For key positions, selecting people that already demonstrate the ability to work in a complex environment will be easier than trying to train and develop these skills. Even better may be to have some of these managers come from organizations where they have experienced working laterally to the degree that the matrix demands. If all your managers are in a stretch assignment, the matrix will be much harder to get off the ground. 4. Investment in the HR systems that support the matrix Many matrix organizations fail to achieve their objectives because they lack the human resource systems to measure and reward the right behaviors. A key management process that Page 5

6 must be realigned as part of a matrix design is that of objective setting and performance management. Managers that share resources need to come together and jointly determine what their staff will be held accountable for and how performance will be assessed. This forces a conversation regarding expectations for the individual, makes explicit each manager s assumptions about what work is important, and serves as a way to communicate the goals of each manager to one another. The process should include expectations for what elements of performance each manager is rating. A functional IT manager may be most concerned with how effectively an IT director supporting a business unit is applying enterprise standards and tools. The business leader evaluating the IT director cares more about how responsive she is to the specific needs of the business. The performance management process also needs to be able to accommodate multiple sources of feedback. In today s complex, project based organizations, a person may work on and lead a variety of project teams in addition a core day job. Project manager input should be included. In addition, some of the most important relationships in the matrix are among peers. Frustration over the need for more involvement, longer decision time frames, additional coordination, and the inter-dependence that the matrix forces can lead to blame and fingerpointing when things go wrong. Talk of teamwork and collaboration has to be backed by measures and rewards for it. One way is to build some peer feedback into the performance management system and make it count. The process can be kept simple. What you want to get at is how easy am I to do business with. Focus on how peers perceive one s competency, responsiveness, follow-up, and communication skills. The reward system often has to be completely realigned as well. It may be obvious that the staff member sitting on multiple teams will need to be appraised and rewarded for balancing and Page 6

7 meeting two or more sets of objectives. Less obvious, yet equally important, is the importance of ensuring that the managers at a level above are incented to support the goals of the matrix and not just their business unit, geographic, project, or functional objectives. A straightforward way to do this is to link performance rating as well as some part of variable compensation (if used) to the success of the organization as a whole. If part of compensation is tied to the success of their counterparts in the other business dimension, you will quickly see the sincere how can I help? behaviors that you desire. * ** Making the matrix work means embracing the conflict that will inevitably come with trying to execute a multi-dimensional, complex strategy. See it as energy to be harnessed and channeled into competitive advantage and make the investments necessary to create organizational effectiveness and success. Page 7