The Functional to Matrix Transition

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The Functional to Matrix Transition
Karen R.J. White, PMP

RECENTLY PARTICIPATED IN A CONSULTING ASSIGNMENT WHICH INVOLVED MOVING A LARGE ITS ORGANIZATION from an old-style functional-department organization structure towards one more friendly to proj-

Common Pitfalls

ects. The project faced the sorts of challenges that are common when trying to realign organizational structure with the new realities of managing by projects. In addition, there were added cultural barriers because the company was in the financial services sector-a very traditional industry, known for conservatism in management approaches. Project management consultants were called in because, for the first time, the organization was undertaking a multi-year enterprise-wide development program that cut across multiple functional departments, instead of following their old pattern of doing projects within departments. Within the program, several major related projects were being carried out. Clearly, business as usual would not suffice. BASELINE: A FUNCTIONAL/WEAK MATRIX STRUCTURE A Functional/ (Weak) Matrix organizational structure, such as our client company had in place, works well when the focus is on quality and technical expertise. Under this structure, functional managers are responsible for products created within their areas of expertise. The downside: In the company on which this case study was based, it just wasn't working. And their experience was not uncommon. The functional-based organization structure tends to undermine the authority and decision-making capability of project managers, making project success more difficult. The functional or weak matrix form of organization does have some advantages. In this case, first of all, it was the currently existing state in the client organization. Change is always traumatic in organizations and, to the extent that we could preserve existing processes and systems, the upheaval-and resistance to it-would be minimized. Functional "stovepipe" organizations take a beating in discussions of optimal organizational structure, but the fact is that they are familiar to people, and thus comfortable for them. In addition, within this structure, IT and IS departments are fully empowered to complete isolated projects within their own "stovepipes." The client organization already possessed well-established communications processes and authorities within the functional areas. From a purely logistical point of view, the staff work locations were already centralized around functional department assignments, making information sharing among team members more straightforward. There are also serious drawbacks to this organizational structure, however. For instance, communications and decision-making processes existed outside the program structure, contributing to schedule and budget issues. For the same reason, true accountability rested outside the programs, somewhere in the traditional hierarchy of the corporation. For example, executive functional management, who were in fact somewhat removed from the actual conditions of the programs, made all the important decisions. Budget and contracting authority was reserved for the CIO level. Under this very traditional structure, only formal authority-something the project managers did not have-was recognized as a source of power. The client organization had made some strides in moving past a purely functional hierarchy, towards a matrix organization. A Project Management Office (PMO) had been implemented the year before my involvement began-a year after the program was launched. Unfortunately, this meant that proper attention had not been paid to project management issues during the initial planning stages of the program.

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The Functional to Matrix Transition Page 2 of 4
Instead of creating a PMO to manage the program, the existing program was inserted into a PMO. However, since the PMO...
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