Functional silos and strategic business units exist for good reasons.
They build depth of expertise, clear accountability and manageable
spans of control. The trouble is that customers’ problems do not
respect those boundaries.
A manufacturer's key account needs sales, engineering, supply chain
and service working as one. A family business preparing for sale
needs tax, transaction, audit and wealth advice joined up, not
delivered as four separate projects.
Each unit, meanwhile, optimises for its own targets: sales volume,
cost per unit, utilisation, billings or its own P&L. Collaboration
becomes a cost to the unit that gives, while the benefit lands
somewhere else. Rational people respond rationally: they protect
their patch and hold on to their customers.
The matrix was meant to solve this. It gives people one line into
their function and another into a market, sector or key client.
In practice it often adds its own complexity: two bosses, competing
priorities, slow decisions and a great deal of time in meetings.
Christopher Bartlett and Sumantra Ghoshal made the point back in
1990 that a matrix works only when it exists in managers' minds,
not just on the organisation chart.
That is the heart of it. Structure can permit collaboration;
it cannot compel it. Trust is what makes a matrix workable.