In the 1970s a management concept called the matrix structure began to take hold in American industry.
Recognizing the limitations in ever more complex companies and markets of top-down hierarchical management structures, where the CEO was the chief strategic guru and principal organizational architect, professors at the Harvard Business School and Stanford University redefined leadership as the practice of maximizing the potential of a team to develop and execute a vision. Truly effective leadership, they believed, could see the relationship of the individual to the group and create spaces where individual actions could combine to achieve a collective vision.
Old organization models ignored people’s ability to contribute and, instead, prescribed a very defined role for them. The expectation was for a single leader to create a system that defined and coordinated all the employees’ relationships to the organization. By assigning roles and titles, he ignored the potential of every member to decide for themselves how to use the interpersonal resources at their disposal.
Instead of leadership flowing from the top down, the matrix structure empowered small groups to lead within clearly defined zones of autonomy and built systems to coordinate their activity without placing anyone in a position of hierarchical authority.
Distributing leadership throughout an organization would create organizations that would be more effective at advancing their mission, more adaptable and responsive to complex systems, more accountable to their communities and more fun.
A recent study of nonprofit management has uncovered a looming crisis in leadership. Many nonprofit executive directors do not expect to occupy their current positions in five years. They site burnout, poor retirement benefits, and the constant pressure of fundraising as the main causes of turnover.
The younger members of their organizations say they are ready to take over leadership but are not ready or willing to occupy the traditional executive director position. They express frustration over top-down decision making, overly hierarchical structures, poor communication, lack of transparency around decision making, a culture of sacrifice, and resistance to change. They want to replace dated power structures, build organizations in which all workers have the power to influence the programs in which they work, shift the role of the executive director by redistributing aspects of fundraising and strategic planning across the organization, and re-imagine the staff’s relationship with the board of directors. They are ready to launch a “matrix revolution” in the nonprofit world.
THE BOARD OF DIRECTORS
The boards of many nonprofits will soon be faced with the task of replacing their executive director. The question is, should they simply try to recruit a replacement and stay with their traditional top-down management structure, or should they adopt an entirely new view of nonprofit management and reorganize their nonprofit around the young people already working in their organization?
Many companies have discovered that reconfiguring the formal structure can be a blunt and sometimes brutal instrument of change. Matrix management structures have led to conflict and confusion, the proliferation of channels created informational logjams, and overlapping responsibilities produced turf battles and a loss of accountability.
WHAT TO DO?
The solution is not to replace structure with “structurelessness”, but to replace the inefficient structure of hierarchy with the dynamic structure of peer co-creation. Peer co-creation focuses on the challenge of building up an appropriate set of employee attitudes and skills then linking them together with carefully developed processes and relationships. In other words, the board begins to build an organization rather than simply installing a new structure.
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Editor's Note: This post was originally published in April 2017 and has been updated with additional information and content.