Escaping the Matrix:

A Systems Approach to the

Intentional Design of Organizations

Kevin Nortrup, Principal April 21-23, 2015

Sugar Creek Solutions www.sugarcreeksolutions.com
 Session Objectives
• Understand the motivation, concept &
implications of a systems approach to
companies & to organizations
• Recognize how a systems approach can
identify and recommend better
alternatives to a matrix organization
• Consider applications and implications
of a systems approach in own work
 Personal Objectives
• to review, without insulting
• to explore, without boring
• to elaborate, without confusing
• to challenge, without offending
• to suggest alternative paradigms &
methodologies, without maligning others
“your mileage may vary” ☺
The Matrix Revisited
 Matrix Organization
Skills
Projects

(possible additional dimensions: geographic region, time)

Matrix organizations have historically:
• increased inter-silo cooperation & communication
• helped to bridge local & global functionalities
• cultivated & concentrated subject-matter experts
• distributed resources & talent across organization
• facilitated “cherry-picking” diverse project teams
• tasked specific individuals with responsibility for
completing a project on-time and on budget
… but they come with increasing cost
• many “assets” just work-arounds for liabilities
– silos, inflexibility, unresponsiveness, poor training
• conflicting authorities, agendas, priorities
• accountability without authority (fire alarms)
• management begets management (1,2,3 lawyers)
• informal structures superseding formal structures
• few empowered champions; many “stake-holders”
• maximal dispersion/scattering of key attributes
– power, authority, expertise, familiarity, vision, passion
The impact of the Information Age on
matrix organizations
(meteors & dinosaurs)
• more complex products & processes
– staggeringly massive, on-going information-exchange
• (to & from individuals “too busy” to process it properly)
– far more risk of something “falling through cracks”
– far greater need for coordination
• interdisciplinary design & integration
• continuity of responsibilities & “ownership”
• lower-cost tools; greater-access skills
– secretaries, draftsmen, travel agents
• (myth of) multi-tasking & interrupts
– 15-to-25-minute recovery to "get back into zone“
– estimate 25% of interruptions: “organizational issues”
The Problem versus ““the
the problem
problem””

Above the waterline

“The perceived problem”
Below the waterline
Most of the actual problem

(hidden & growing complexity)

 “How do we solve a problem
like the matrix?”

Is the solution:
• convolution?
– (aggressive realignment)
• evolution?
– (progressive refinement)
• revolution!
– (re-start at the very beginning)
 Managing complexity …
Project Manager, Organization Development
• Develop change management plans • Integrate approved plans into the organizational life
– partner with other OPD team members • Execute approved plans, reporting status/effectiveness
– drive a thoughtful and simple delivery framework • Design effective meetings with senior executives,
– ensure alignment at all levels and all times managers, and stakeholders as appropriate
• Support continuous improvement of project management • Identify and remove barriers that slow or prevent the
approach, standards, tools and methodology for successful change initiative & administrative efficiency
sustaining change efforts • Work collaboratively with project team members to
• Identify training needs and project costs/benefits identify mitigation strategies, take early action to
• Stay aware of external programs and developments resolve issues and address cross-team impacts,
• Review and evaluate the effectiveness of programs working with appropriate resources, including but not
• Personally conduct selected programs limited to Human Resources, Information Technology,
and a variety of departments and units
• Serve as a technical resource for programs that are
developed and presented locally • Ensure that ‘Core HR,’ ‘Compensation,’ ‘Performance’
and ‘Recruiting’ modules are fully implemented, work
• Assess & analyze change Impact and readiness flow processes are documented& content is uploaded
• Create a Findings and Recommendations report • Restructure employee file documentation process and
• Lead the development of appropriate plans to support set up employee data filing process – go paperless
the change initiative, including: • Adjust employee orientation program after successful
- Communication plan systems implementation.
- Leadership engagement plan • Set up training workshop for how to utilize the portal
- Resistance Management plan and how to update employee master data according to
- Reinforcement plan the new employee files documentation process
- Transition plan • Provide support on PMI tasks and set up overall
- Training plan training schedule for rollout of policies and other
programs within the organization.
 … or compounding it?
Project Manager, Organization Development
Key responsibilities (paraphrased):
• swallow the spider to catch the fly
• swallow the bird to catch the spider
• swallow the cat to catch the bird
• swallow the dog to catch the cat
• swallow the goat to catch the dog
• swallow the cow to catch the goat
• swallow the horse to catch the cow
• have succession plan in place for
inevitable result of swallowing horse
 Perhaps, instead …
… with “change” as the new constant, due to:
• continuous improvement
• marketplace responsiveness
• economic uncertainty
• agile everything

… might it not be better,

just to cough up the fly?
Designing for Purpose.
Organizing by Design.

• Purpose: to cough up all of “the flies”

• “Design”, not “de facto”
– intentionality, not happenstance
• Genuine design requires:
– objectives / vision
– methodology / process / tools
– evaluation, verification & validation
– ability to manage complexity toward
desired ends
Declaration of Interdependence
• Matrix organizations add complexity
through increased dependencies and
cross-purpose/conflicting priorities.
• A systems approach provides both the
“why” and the “how” to design simpler,
more robust organizations with:
– greater localization & efficiency
– fewer dependencies & cross-purposes
“Make everything as simple as
possible – but no simpler.”

― Albert Einstein,
paraphrasing William of Ockham
Escaping the Matrix: A Systems Approach to the
Intentional Design of Organizations

What is a
“systems approach”?
(and why is it important?)
System: (n)

“an assemblage of
interconnected,
interdependent
and interrelating
elements, forming
a complex
& unitary whole”
Systems Approach
fundamental awareness:
elements of a system
are interconnected
and interdependent
with other elements

(often in complex,
hidden and/or
unexpected ways)
 When we embrace a systems
approach:

… we can better identify, understand &

manage the complexity of:

our goals & objectives

the requirements that drive them

the constraints that shape them

the mechanisms that achieve them
When we ignore a systems
approach:
Critical dependencies are often
hidden amidst complexity and
therefore overlooked, leading to:

mysterious failures

deceptive symptoms

difficult root-cause analysis

uncertain remediation

likely recurrence
“We need to look at it from a systems
approach, a human/technology system that
has to work together.
This involves aircraft design and certification,
training and human factors.
If you look at [any single factor] alone, then
you're missing half or two-thirds of the total
system failure...”

― Captain C. B. “Sully” Sullenberger

(pilot of US1549 “Miracle on the Hudson”, about AF447)
 Escaping the Matrix: A Systems Approach to the
Intentional Design of Organizations

What are the elements of a

systems approach?
(and how can they be applied
to the design of organizations?)
 Systems approach:
 Systems thinking

Systems design

Systems troubleshooting
General Systems Theory (GST)
• Karl Ludwig von Bertalanffy
– biologist (1901-1972)
• focus: holistic interrelationships
• interdisciplinary practice & application
– astronomy, ecology, biology
– sociology, government, business
– economy, technology, computers
 “The Fifth Discipline”
Senge, Peter (1990). The Fifth Discipline: The Art & Practice of the Learning Organization

Systems Thinking = integration of:

– personal mastery
– mental models
– shared vision
– team learning
Recipe for Systems Thinking
• understand big picture (internally, externally)
– examine from multiple perspectives
– employ appropriate abstraction & hierarchy
– challenge & verify all assumptions & models
• understand behavior & interrelationships
– observe & analyze data (patterns, trends)
– identify all dependencies
• linear (cause-effect)
• circular (feedback)
Circular dependencies:
feedback loops
- negative
(compensating)
(goal-seeking)
find drink
water water
+ positive
(reinforcing)

assess

oscillation
thirst
(delay)
 Redeeming “Hierarchy”
• not an obsolete artifact of “command-and-control”
– inherently about layers of abstraction, not power/worth
• essential to grasp/manage complexity of the world
– allows brain’s limited “working memory” (7±2? 4? 3?)
to grasp the infinite “cosmos of quanta”
• basis of biological classification (taxonomy)
• basis of computer structured analysis & design,
object-oriented programming, etc.
• basis of computer file systems
 Abstraction & Hierarchy
• essential to understanding, analyzing and
designing complex and/or vast systems
• at any one time, consider only one
hierarchical “slice” of a complex system
– lower subsystems abstracted as simple elements
– higher system abstracted as “external” inputs &
outputs (requirements & deliverables)
 Abstraction & Hierarchy

human body consists of systems

systems consist of multiple organs

organs consist of multiple tissues

tissues consist of multiple cells

cells consist of multiple molecules
Modeling a company as a system

Company

Culture Organization
& Tools & Training &
& Processes
Structure Tech. Development
Policies

Each element is actually a subsystem;

must be individually optimized & collectively aligned
Objectives & Strategy
• Inputs to (not elements of) the system
• Objectives:
– vision / mission / purpose /charter
– products, services, markets, customers
– social responsibility (footprint) towards
• employees
• customers (internal & external)
• community
• nation
• planet
• Strategy: how to align elements with
objectives & with one another
 Culture & Policies
• de facto values defined/communicated by:
– directions chosen & decisions made
– corporate policies (official & unofficial)
– behaviors prohibited, tolerated or rewarded

• prioritization / balance / synthesis of:

– initiative ↔ directed effort
– flexibility ↔ methodology
– consensus ↔ control
– accountability ↔ forgiveness
 Organizational Structure
• Fundamental division of labor:
– who does what,
– alongside whom,
– directed by whom,
– dependent upon whom, how
• Function follows form:
– organizational structure matters
– especially interdependent with process
 Processes & Workflow
• Description of what, how, when, where
– flow between operational steps
• abstract: data, permission
• concrete: materials, work-product , people
– operations that occur at each step
– timeframe of responsibilities
• Interdependent with all other elements
 Tools & Technology
• Equip organization to do process
– physical tools
• office equipment & hand tools
• vehicles & heavy machinery
• areas, rooms, buildings, parking lots
– virtual/electronic tools
• software, intranet & documents (IT)
• time-reports, travel-arrangements, etc.
• Interdependent with all other elements
 Training & Development
• Training: on company & responsibilities
– corporate vision / mission / objectives
– culture, organization, processes, tools
– products/services and market/customers

• Development: individual/personal
– professional continuing education
– personal growth & wellness
A company is (also) part of a system

Market

Government
Trans- &
Suppliers Customers Company Finance
portation Regulatory

Each element is actually a subsystem; must be

individually optimized & collectively aligned
“I think everyone in this country should learn
to program a computer.
Everyone should learn a computer language
because it teaches you how to think.
I think of computer science as a liberal art.”

― Steve Jobs
 Systems approach:

Systems thinking
 Systems design

Systems troubleshooting
 Design is …
• Clearly documented objectives
• Thoroughly gathered/analyzed requirements
• Intentional, directed craftsmanship
– not ad-hoc emergence
• Applicable to:
– comprehensive solutions (products/services)
– processes that create/deliver those solutions
– corporate structures that encompass them all
 Systems Design
• Technical disciplines: systems engineering
– manage abstract complexity → desired results
• telecom: world cellular ≈ 5M towers, 7B phones
• hardware: modern CPU ≈ 10M transistors
• software: modern OS ≈ 100M lines of code
– objective basis for judging design & methods
• “Non-technical” undertakings
– comparable complexity
– similar meta-methods & skills applicable
 Systems Design

1. Vision: Define the problem

2. Vehicle: Design the solution
3. Valor: Implement the solution
4. Validation: Test thoroughly &
monitor continuously
5. Variation: Debug / refine /
adjust / improve as needed
 Define the problem

inputs → functionality → outputs

• Envision desired results
• Articulate objectives
• Collect & analyze requirements
& constraints
(including present status)
 Design the solution
(mindful of requirements & constraints)

recursive hierarchical decomposition

top-down (abstract → concrete)

to ensure objectives

bottom-up (concrete → abstract)

to ensure reality

massage up/down until alignment
optimized partitioning (how divided)

minimal dependencies

maximum localization
Designing Companies as Systems
• Suggested 1st pass: top-down
– objectives → culture
– culture → organization
– organization → processes
– processes → tools
– tools → training
• Iterate in both directions ( ↑ & ↓ ) to align
elements with each other & with objectives
 Cultivating Culture
(strongly
(strongly impacts
impacts Organization)
Organization)

“The society which scorns excellence in

plumbing because plumbing is a humble
activity, and tolerates shoddiness in
philosophy because philosophy is an
exalted activity, will have neither good
plumbing nor good philosophy:
neither its pipes nor its theories will hold
water.”
― John W. Gardner
 Designing Organization:
appropriate hierarchy
Team of teams (system of systems)
• Each/every position is unmistakably valued
– varying scope (abstract↔concrete), not importance
– all positions mandate both respect & accountability
• Each/every position adds unmistakable value
– communicates/coordinates upper to lower
– prioritizes/arbitrates/abstracts lower to upper
• 360° interaction & accountability (no status reports!)
– cross-training, mentoring, succession-planning
– team-mates, suppliers, customers (peers, subordinates, superiors)
 Designing Organization:
appropriate authority
• “Coordinated cooperation” = hybrid/synthesis of
– command-and-control (top-down: strategy/forest)
– consensus-and-collaboration (bottom-up: tactics/trees)
• Anywhere “things” come together, they need:
– aggregation and oversight
– arbitration & prioritization of conflict
– local resolution of issues (not “bubbling up”)
• Everybody “owns” something
– accountable, responsible, empowered
– expert, visionary, champion, advocate
 Designing Organization:
appropriate partitioning
• Highly orthogonal (minimized matrix)
– unique, mutually exclusive functionalities
– self-evident “whose ball it is” at all times
– minimal “dropped balls” & “collisions”
• Highly holistic (minimized “silos”)
– interdisciplinary teams/contributors
– consolidation of knowers/planners/doers
– career-path of broadening scope/impact
– minimal dependencies, maximal localization
 Designing Organization:
appropriate parallelism
Deliverable-oriented organization
• One-to-one correspondence of
– hierarchy of products/services
– hierarchy of implementing organization
– (hierarchy of documentation)
• developed progressively/cooperatively/hierarchically
• specification = documentation = verification
• Far greater:
– continuity, accountability & empowerment
– responsiveness, agility & efficiency
– confidence, quality & modularity
Partitioning:
Partitioning many inter-dependencies
(much overhead & inefficiency)
Partitioning: few inter-dependencies
(fewer people but better efficiency)
 Traditional Partitioning
Product structure Organizational structure

Product / 1999: Mars Orbiter Mr.

Lisa! Process Burns
2013: healthcare.gov
Omission→●
Component Component Component
A B C Homer Moe Krusty Bart

●←Overlap
Component Component
B1 B2 Marge Lisa

Homer Bart
Marge Mr. Burns? Moe? Krusty?
Maggie?
 Parallel Partitioning
Product structure Organizational structure

Product / • interdisciplinary
Process • object-oriented Lisa
(Lisa)
• holistic

Component Component Component

Homer Marge Bart
(Homer) (Marge) (Bart)

Component Component
Maggie Mihouse
(Maggie) (Milhouse)

project-management
quality-assurance
verification & validation
} critical, distributed skills
(not isolated departments)
 Designing an Organization:
Example parallel product/org.
Each node: Market + Products
Prod-Mgmt + Engr/dev & Services

Headquarters Hospital Home

Head-end Patient room Distribution

Pillow Speaker Set-top box TV

 Designing an Organization:
Example top level (hierarchical)

Company

Products Compliance
Sales Operations
& Services & Support *

* (subsumes “Finance”, “IT”, “HR”, “Training”, “Communications”,

“Legal”, “Regulatory”, “Health/Safety/Environmental”, etc.)
 Designing an Organization:
Example top level (data-flow)
Purchase orders
& specs
r e s Sales Raw
a t u s Sa
Fe e c o les materials
s p rde
& rs
PCB, BOM; V&V
Product Operations

Finished
Compliance goods
Designing Process & Workflow
• Description of what, how, when, where
– flow between operational steps
• abstract: data, permission
• concrete: materials, work-product , people
– operations that occur at each step
– timeframe of responsibilities
• Should always:
– serve Culture & Organization, not vice-versa
– include continuous monitoring & improvement
– demand auto-root-cause analysis of failures/issues
– schedule & budget at 80%, not 120%
Designing Tools & Technology
• Equip/enable/empower organization
• Should facilitate processes, not vice-versa
– (may accommodate legacy/disruptive tech.)
• Should always be effective means, not end
– not a “solution looking for a problem”
• Cost-justified via big-picture life-cycle
– ROI: acquire, install, train, perform, maintain
 Designing Training &
Development
• "Training Department"
– responsible for development & on-boarding
– only facilitates most other training
• Each department develops own training
– specific curricula for each job-description
– courses designed/taught by in-house SMEs
• theoretical framework & practical skills/knowledge
• “required” in native/originating curricula
• “elective” in others (big-picture, cross-training)
• Feedback: “How well did we prepare you?”
 But what about “IT”?
(HINT: label groups by deliverables, not by skill-set)
• sole-sourced “IT” = frequent bottleneck
• central groups focus on central issues
– servers, network and other shared resources
– security: policies, procedures, protocols
• functional groups manage own resources with
embedded internal members with IT skill-sets
– reports, scripts, screens (cf. EMR)
– centralized reviews if impact others
 But what about “Quality”?
Quality = “delivering the expected or better”
• verification (match the specification)
• validation (match the market/need)

Quality, Continuous Improvement, Agility

• cultural values & procedural mandates
• intrinsic, not extrinsic
• not departments
“Systems engineering … has often produced
dramatically positive results in the small number
of health-care organizations that have
incorporated it into their processes…
Systems-engineering know-how must be propagated
at all levels…
[We recommend] that the United States build a
health-care workforce that is equipped with
essential systems-engineering competencies that
will enable system redesign.”
― President's Council of Advisors
on Science and Technology (PCAST)
(in May 2014 report to President Obama)
 Systems approach:

Systems thinking

Systems design
 Systems troubleshooting
 Systems Troubleshooting

Systemic (holistic)

Systematic (methodical)

Three-fold priority: (avoid quitting early!)

– alleviate symptoms (not mask!)
– find/fix specific underlying problem-mechanism
– address general issues (process, partitioning, etc.)
fire-fighting → fire-investigation → fire-prevention
Systems Troubleshooting

Know how it is “supposed to work”
– especially cause-effect chains & loops

Identify how not working as expected

Utilize consistent, logical methodology

classical scientific method

coincidence ≠ correlation ≠ cause-effect
 Problem Statement

Quality of problem statement →
quality of solution

Precision & specificity are critical!

(Help Desk or Continuous Improvement)
“When <circumstances> and <action>,
I expected <desired-results>
but instead I experienced <undesired-results>.”
 Troubleshooting Exercise: System

complaint: “alarm fatigue” in hospital

symptom: nurses overwhelmed by alarms

monitors, pumps, ventilators, bed/exit, patient-calls

possible problem-mechanisms/contributors

objectives =?

culture = ?

organization = ?

process = ?

tools & tech = ?

training = ?
“There is nothing quite so useless,
as doing with great efficiency,
something that should not be done
at all.”

— Peter Drucker
Escaping the Matrix: A Systems Approach to the
Intentional Design of Organizations

Summary
(What have we learned, and
what are some next steps?)
 Top 10 take-aways
 Complexity of Information Age surpasses tools of Industrial Age.
 Better to cough up a fly than to swallow a barnyard as remediation.
 Complex systems & systemic issues demand a systems approach.
 Systems approach = systems thinking / design / troubleshooting.
 Embrace proper hierarchy & abstraction to manage complexity.
 Strategically align culture, organization, processes, tools & training
– with each other & with objectives.
 Replace matrix organization with deliverable-oriented partitioning.
 It should be self-evident “whose ball it is” at all times.
 Fire-fighting < fire-investigation < fire-prevention
 It’s a marathon, not a sprint. (“Lather, rinse, repeat.”)
 Caveats & Contingencies
• Systemic change: paradox of scope
– too narrow: unlikely to address root cause
– too wide: possibly too daunting/disruptive
– try: systemic change of division or department
• Systemic change: paradox of timing
– never a good time for disruption (rope swing)
– carve out grace period (reduced expectations)
• Interdisciplinary individuals: shortfall
– mix specialists at group level (not parallel org.)
– cultivate own & encourage production of others
“The reasonable man adapts himself to the
world;
the unreasonable one persists in trying to
adapt the world to himself.

Therefore, all progress depends on the

unreasonable man.”

— George Bernard Shaw

 Escaping the Matrix:
A Systems Approach to the
Intentional Design of Organizations

Thank you! Questions?

www.sugarcreeksolutions.com