If you’re struggling with managing multiple teams and projects, a matrix organization structure can make all the difference. In layman’s terms, the matrix organizational structure is just a way of relaying information between all team members across multiple departments.
For instance, members of different teams report to project and functional managers (marketing, finance, production managers, and so on), who then report to the chief executive officer.
This improves cross-team communication and eliminates the need for team members to align or realign whenever a new project kicks off.
So if you want to know the following:
- What a matrix organization structure is
- The different types of matrix structures
- Why it’s a better way of running projects
- How to build your own matrix
- Some critical examples from prominent companies
Then you’ll love this in-depth guide.
Ready to enter the matrix? Let’s get started.
What is a Matrix Organizational Structure?
In the classic, top-down organizational structure, the CEO stands at the very top while the COO (chief operating officer), CFO (chief financial officer), and department managers come next.
In a horizontal structure, copywriters report to the creative director, who reports to the CMO, who then reports to the CEO. You get the point. Reporting is linear, and everyone from marketing, sales, design, and development, to finance and HR teams follow the same reporting structure.
The traditional top-down structure is less complex than the matrix organizational structure. For one, the matrix organization structure may involve team members reporting to both their department and functional manager and project managers that also report to their department managers.
That’s why the top-down organizational structure is tree-like while the matrix organizational structure has a rectangular shape.
It’s worth mentioning that the matrix organizational structure unites and balances out several types of organizational structures. It brings in project managers a new chain of command besides functional managers, which is why some like to name it the two-boss matrix.
Working on large-scale projects where a diverse set of talent is included, project managers:
- Manage talent across departments and create solid and diverse project teams,
- Maximize the resources that are already at their disposal,
- Help everyone realize how essential teamwork is, and encourage team members to collaborate, communicate, and deliver on time and within budget.
Ultimately, this contributes to creating better copy, products, and customer experience. 🤝
Types of matrix organizational structures
Matrix organizational structures can be either weak, balanced, or strong, depending on how the power between project and functional managers is deployed.
However, don’t be led by the names since a weak matrix is not necessarily worse than the strong one, which differs from project to project, from one company to another, and these roles are rather fluid.
Project managers have very little authority and decision-making power in a weak matrix. This kind of matrix is named weak because functional managers are in charge of the project budget and timeline, and project managers’ authority is super limited.
In balanced matrix structures, team members report to department and project managers with equal power and authority. The balanced matrix could be the best one since it eliminates the potential clashes between leaders, keeps communication open, and makes it easy to get to successful project delivery.
As you can already conclude, in a strong matrix, project managers have more authority than functional managers to allocate resources properly and plan budgets with a free hand.
How Does a Matrix Organizational Structure Operate and What Are the Benefits?
Some people find the matrix structure either confusing or overwhelming simply because it typically involves several chains of commands and multiple reporting structures. The truth is, it’s way less complicated than it seems at first!
If you create a thoughtful project plan, assign and manage assets most efficiently, and develop a communication plan, you’ll be good. 👌
Team and cross-team collaboration and shared resource planning result in higher productivity rates within most matrix organizations. The matrix structure makes up for the weaknesses of the single-boss structure, and this duality of authorities can contribute to better products or services.
Now, let’s take a look at some of the benefits of implementing a matrix organizational structure!
Fosters cross-departmental communication
Unlike the top-down-organizations, the matrix structure encourages communication between team members and their respective functions and project managers.
We know dealing with two (or sometimes even more) managers and reporting to them may sound a bit off. However, engaging with key decision-makers can actually facilitate the exchange of information and expertise and improve organization-wide relationships.
Scheduling appointments regularly is a great option to strengthen the coordination process, big time.
Improves employee engagement
Being a part of multiple teams and reporting to multiple managers increases employee engagement. The reason for this is simple. It makes them feel like an active part of any project. Employees love when they can make a difference and contribute to getting the project from start to finish.
Other than that, by recruiting internally, you will save some money you’d otherwise spend on overhead costs if you’d hire new staff every time you’d work on a new product or service.
This also gives your employees a chance to break the monotony of their work routine, helps them expand their skill set, achieve goals at a faster pace, and deliver projects faster too.
Allows leaders to set clear project goals
Reporting progress to department heads and project managers and reporting to senior management contributes to achieving greater clarity on objectives, solidifying project goals, and delivering faster.
The matrix allows team members to establish dynamic connections with each other and stimulates the development of creative ideas, all of which lead to enhanced and seamless team collaboration.
4 Matrix Organizational Structures Use-Cases and Examples
In this section, we’ll go through four use cases and examples of matrix organizations to see how other successful companies have implemented this approach. These examples were all created using the ClickUp Whiteboard feature, where you can start with a blank canvas or use one of ClickUp’s templates to help you get started quicker!
1. Philips example
This example visually explains something we’ve already mentioned in one of the previous sections. The matrix organization has a rather triangular shape, while the top-down organization has a tree-like shape.
Thus, in the first example, you can see that sales, finance, and IT teams report to commercial, finance, and technology managers, that then report to both the national organization and product division (PD). This explains those two chains of commands that were also mentioned several times throughout the article.
The second example displays reporting to a single authority. Sales, finance, and IT teams report to commercial, finance, and technology managers, who report to the national organization that reports to the product division.
2. Starbucks example
Here’s an example of how Starbucks applies the matrix organizational structure. We used the Whiteboard to visually represent the reporting structure the most popular coffeehouse applies to their business. ☕
Let’s imagine that these four geographic divisions (North America, Asia, Latin America, and EMEA) are project managers.
So, we have senior VPs who report to executive VPs who report to group presidents, who then report to one of the aforementioned divisions. Finally, each division reports to the global entity, which then reports to the CEO.
3. Engineering and marketing department
Again, the Whiteboard view came in handy, and we wanted to show how marketing departments can apply the matrix organization. In a nutshell – you can easily differentiate project managers from the content director, creative director, director of demand generation, and director of product marketing.
Team members work together on tasks and report to project managers and the directors mentioned above. Project managers report to the director of the project manager, while the director of the project manager and other directors then report to the head of marketing (CMO), who reports to the CEO.
We can apply this kind of organizational structure to other departments of any engineering company (finance, operations, etc.), and using call center software is also proving to be a valuable tip for enhancing communication channels.
4. Advertising agency example
Last but not least, here’s how an advertising agency can apply the matrix structure to their business.
You can see that various team members (brand specialist, blog manager, video producer, etc.) report to department managers (marketing, production, creative, and content managers) and a project manager two.
Project manager two reports to project manager one, who reports to the head of PM. Functional managers then report to the head of marketing, production, and editorial director, while both of the head of PM and the head of marketing, production, and editorial director report to the agency president.
These are just a few matrix examples that you can use as inspiration; there are various ways to structure a balanced matrix organization. If you’d like to create your own matrix organization, you can easily do so in ClickUp’s Whiteboard feature, like I did to create the examples above.
You can start with a blank canvas and use the drag-and-drop feature to easily build your ideal organizational structures. And if you need help getting started or simply want to get a solid framework to start with, then turn to the Organizational Chart Whiteboard Template to give you a helping hand!
Your Turn to Create Your Own Matrix Organizational Structure
We’ve cleared the air about the fab matrix organizational structure for you and tried to explain how you can make it work well when working on complex projects.
You can optionally choose to embed your company’s chart on your website to enlighten customers about the modus operandi of your business.
The idea of reporting to multiple leaders improves collaboration, makes employees more engaged, sparks creativity, eliminates overhead costs, and results in delivering better solutions.
However, to be able to implement the matrix structure, you also need to work with a tool as powerful as the structure itself–ClickUp!
Start using it today to get access to hundreds of features that’ll help your entire organization manage and deliver projects efficiently and tools to help you create an effective matrix organization. 🚀