Matrix Madness

“Psst...Don’t tell anyone, I hear we are having a re-org...”

Business is tough. In this global economy, corporations must be nimble and ready to adapt to the ever changing technology and business landscape. The parts of a corporation that need change can be fundamental and difficult to change. Unfortunately, misguided management will often reach for, and start turning the easiest knob available instead of the knob that could actually improve the situation. More often than not, it is the reporting structure that is tackled for change. A reorganization (or re-org), is the ginsu knife of the management utensil drawer. It slices, dices and does julienne fries.
Revenue not where it should be? Let’s re-org. Revenues up, but profit margin down? A re-org should do the trick. Business going good and growing? Better re-org to handle the growth. Business down? Need to re-org to turn things around.

Ironically, all the anticipation and reaction to new organizations has more effect on productivity, albeit a negative effect, than the actual reporting structure change.
Word gets out. Rumors run, speculation spirals, and worries worsen.
The sad part is that this organizational distraction preempts change that could actually improve business. It amounts to little more than proverbial deck chair arranging on the titanical corporate vessel.

The real reason that reorganizing is so popular is the opportunity to gain control of resources. Resources equal power. Unfortunately, everyone wants to gain power, so the there is little agreement to the proposed organization changes. This is why pending reorganizations seem to take forever to be formally announced. Often the wait for the disclosure and announcement of the changes takes longer than the actual organization is in effect. This leads to the re-re-org and the re-re-re-org.

Each subsequent change typically cycles through one of three types of organizations. The most classic configuration is the functional organization. How can you argue with this? It must work. The name says it all, it is functional. (Does that make other configurations nonfunctional?) Another classic configuration is the product organization. In this scheme, you must multiply the head count by the number of projects being worked. The resultant head count required is excessive due to this mutiplicative effect (thus the product organization). Finally, there is the matrix organization. This is a virtual organization where things are not as they seem. Keanu Reeves is in charge and most of the people report to intelligent machines.