In a traditional organisation, there are two widely accepted norms: firstly, that with authority comes responsibility, and secondly, that every subordinate reports to one boss. However, as the matrix structure takes both these norms and throws them out of the window and the principles that come with successfully operating in a matrix structure are more and more relevant as we genuinely build collaborative business cultures.
In a matrix, authority and responsibility are shared between divisional, group, project or functional managers. This can create some ambiguity over resources, technical issues or key decisions, which, if not properly managed, can mushroom into unhealthy power struggles. But, when navigated correctly, matrix structures offer many benefits, including less “reinvention of the wheel”, greater access to shared resources, and reduced costs.
As the regional (Australia and Asia) CFO and Senior Director of Alexion, Yogita Nath is well-aware of both the challenges and benefits of working – and succeeding – in a multi-national matrix structure. Alexion is a US-listed global biopharmaceutical company focused on developing and delivering life-transforming therapies for patients with devastating and rare diseases. This business has also been ranked as one of the top companies on the Forbes "World’s Most Innovative Companies" list every year since 2012.
During her career with other multinational groups, including the Fosters group and Johnson & Johnson, Yogita has developed a strong understanding of the dynamics of a multi-dimensional reporting structure and leveraging the strengths of a large group. By way of example, at Fosters, she was based primarily in the UK and reported commercially to the MD. From a functional perspective, however, she reported to the Head Office in Melbourne. At Alexion, she reports to the Regional VP in Australia but has a hard-line to the Deputy CFO in Connecticut.
Many of my readers have seen similar models in their own environment.
In a recent webinar with The Outperformer, we explored the strategies for effectively performing as a finance professional in a matrix model. Yogita also covered other key areas, including:
- Understanding the priorities
- Executing strategy across cultures and countries, particularly in a fast growth business
- Techniques and tips for setting yourself up for success in this environment
- Stretching outside of the CFO function.
There are undoubtedly many challenges associated with working with matrix reporting lines and structures, but Yogita believes one of the most common is managing expectations.
“A stakeholder – usually a corporate office – will set you a target, and you then have to try and manage that with your local stakeholders, who tend to be naturally more optimistic than the more conservative finance people,” she says. “It’s a good, healthy, natural tension, and it promotes good debate and discussion. You find the commercial guys put forward a very robust, strategic and optimistic view, and then finance people such as myself come in with more of a conservative view. It’s important to align those expectations, remembering that we are also the custodians from a compliance perspective.”
Yogita says the other big challenge is dealing with different time zones! “We have Head Office in the US, so calls are often done very early in the morning, or very late at night,” she says. “This can make your work/life balance a little challenging to get right!”
Getting Relationships Right
Throughout our interview with Yogita, the subject of relationship building and development was a frequent theme. She believes relationships play a vital role, particularly when it comes to driving strategy to implement goals.
“It’s true that there are formal lines of communication in terms of hierarchy and reporting lines, but there is also a very important network of stakeholders that you can use from an influence perspective,” she says. “I’m constantly having lots of informal chats, both locally and with the US, taking on a facilitating and negotiating role to solve issues. It’s all about very clearly outlining what the strategic impact would be of a short win versus a longer hit. It’s a very fine balance, but if you’re empowering others around you to have that conversation with you, and educating people about the risks and opportunities, then that can go a long way. I also travel a lot to our Asian offices, and I now know everyone in the office there. It’s about investing the downtime to build relationships.”
All About Alignment
Because of the specific, multi-channel reporting structure peculiar to matrix operations, it can be difficult to take diverse groups of people, in different countries and with different functions, and bring them all together on a key decision. Alignment is not always easy, but Yogita believes clarity is key.
“It’s very important to make it clear up front who is responsible for what,” she says. “However, I learned a long time ago that you can’t just tell people what to do! It’s important to make them feel comfortable with flagging potential problems early on, and not to worry that there might be negative consequences. You also need to also encourage learning agility and adaptability. You can’t be doing the doing without understanding the business.”
You’ll find Yogita’s entire interview online on our webinars page, which you can access here.