The following are approximately the first 1000 words from Chapter 14 of Jonar Nader’s book,
How to Lose Friends and Infuriate People.

Cut across the dotted line:

Matrix management is your ticket to hell

There was a plaque on a wall in one of my managers’ office. It made reference to a then famous book. I was asked my opinion of the author’s comments, so I spoke my mind. I knew at the time that such vocal bravery would be unwise from a career point of view, but I gave my honest opinion just the same. As a result, I was ripped to shreds for my beliefs.

Many years later I was proven correct. Even the author eventually apologised to his readers in a subsequent book and spoke of the error of his ways.

I wonder if my old manager now realises that I had valid reasons to criticise the book. I’ll never know. It doesn’t matter anyway. What does matter now is that I am about to stick my neck out again and say something that my politically aware mind says I ought not to express.

If you are a chief executive officer (CEO) who endorses the practice of ‘matrix management’, I suspect that you will not like to hear my views. Furthermore, you might even become furious — as I know many have been when I have expressed my thoughts about this subject. Regardless, time will tell.

What I wish to do is ring the alarm bells and say that matrix management is the stupidest corporate structure that I can imagine. It is the most destructive, unworkable, and soul-destroying management configuration.

Naturally, different management structures suit different organisations. However, my warning is applicable to CEOs who promote creativity, endorse harmonious interchange, demand excellence, and push the boundaries for innovation, growth, and infrastructural soundness. That’s my qualifier. If that’s the kind of CEO you are, I advise you to stay away from matrix management structures because, even with the best of intentions, they become handcuffs.

On paper, matrix management sounds plausible — just like communism sounds good in theory. Some organisations might argue that matrix management does work for them. Yes, there might be exceptions. However, do not be deluded by such rare cases.

What is matrix management?

To describe this set of handcuffs, I’ll give you a real example of how matrix management interconnects people.

Imagine a chocolate manufacturer that designs and manufactures a broad range of products. Its headquarters is in the UK, with offices around the world.

The Asia–Pacific headquarters for the White Chocolate Division is in Japan. The Cooking Chocolate Division has its Asia–Pacific regional headquarters in Singapore. The Catering Chocolate Division has its regional headquarters in Australia.

The head of the Australian ‘country’ operation reports to a vice-president (VP) in the UK, but has dotted-line reporting to Singapore.

Reporting to the Australian head are several VPs. One is responsible for the consumer division, one for sales into schools, one for retailing accounts, another is in charge of large accounts, yet another is in charge of government contracts. In addition, there are different VPs in charge of Family Packs, Gift Boxes, Sugar-Free Products, and Party Packs, respectively. Quality control is run by a different VP, as are Human Resources, Operations, and Finance. The advertising functions are headed by two different managers.

The Party Packs VP is responsible for her bottom-line results, but she has no authority for design, manufacturing, distribution, channel management, or other vital functions. Everything to do with advertising must be approved via the Communications Manager who, although reporting to the Australian head, has to take advertising direction from the USA. If the promotions campaign includes direct marketing and print advertising, the Direct-Marketing Manager, plus two different external agencies, need to be engaged — but they cannot make decisions unless they check with their respective headquarters overseas.

If the sales promotion involves direct mail that targets a retail store, the Retail VP must be involved. If the retail store falls within the category of a large account, the Large Account VP must be involved.

If the large retail outlet is inside a university campus, the Education VP must have a say. If it is housed inside a government complex, the Government VP must approve the offer. In addition, it so happens that the building is in Auckland, so the Auckland Branch Manager needs to be engaged. Would you believe, at the end of this vicious chainsaw is a salesperson trying to sell chocolate, but no-one from this matrix bothered to seek the advice of the salesperson.

I have painted a simplified picture of the matrix management scenario. I have seen much, much worse. Matrix management gets to the point where no-one has the authority to make basic business decisions. But that’s not the full extent of the scenario.

The VP responsible for retail has a marketing manager who is assisting in the execution. The Marketing Manager reports to the Retail VP — but not really because all functional direction comes from the Chief of Retail in Singapore who reports to a counterpart in Japan. The Marketing Manager is located at a remote site and thus has a ‘Location’ Manager as well.

In any case, this month the Retail Marketing Manager is rewarded on gross profit (GP). So his mortgage payment rides on his ability to attain a set GP figure. His colleague, the Product Manager, reports to the Head of Product Managers in Japan who has a different boss and whose direction comes from the USA. The Product Manager’s success hinges on his ability to ensure that stock in the warehouse is halved to make way for new models.

Already with conflicting objectives, the colleagues have been pitted against each other — one keen on keeping the GP high while the other is focused on clearing the stock, even if at below cost price. To top this off, neither knows of the other’s hidden objectives for the month. Under such circumstances, teamwork is an impossibility.

Imagine if the final offer included sugar-free products and required a response to a government tender. There are then two more departments that would have to step in. And there’s more.

The client in question is a division of an institution that is run out of Germany. The German group has just signed a world-wide agreement with the confectionery company in the UK, and all sales now must comply with world-wide pricing that must be approved in Japan. To tell you more, you might not believe me, but there is more.