{"id":21295,"date":"2018-05-02T00:00:00","date_gmt":"2018-05-02T00:00:00","guid":{"rendered":"http:\/\/global2020prd.wpengine.com\/insights\/let-matrix-organizations-breathe-by-disentangling-decision-making\/"},"modified":"2026-02-17T14:17:10","modified_gmt":"2026-02-17T14:17:10","slug":"let-matrix-organizations-breathe-by-disentangling-decision-making","status":"publish","type":"post","link":"https:\/\/www.global-integration.com\/insights\/let-matrix-organizations-breathe-by-disentangling-decision-making\/","title":{"rendered":"Let matrix organizations breathe by disentangling decision making"},"content":{"rendered":"

\u201cBillionaire hedge fund manager Nelson Peltz calls P&G a suffocating bureaucracy\u201d run the summer headlines \u2013 with Peltz blaming P&G\u2019s matrix structure for its current woes and launching a proxy shareholder fight[1]<\/a>.<\/p>\n

However as we\u2019ve said many times here before, it is not the matrix structure that is the problem it is the ways of working adopted within that structure. As Peltz rightly acknowledges, the challenge for P&G is to update their culture.<\/p>\n

A key component of the required culture change in most matrix organizations is to speed up, disentangle and decentralize decision making<\/a> as much as possible \u2013 as we discussed in a recent blog[2]<\/a>.\u00a0 In their June 2017 report McKinsey deep dive into this issue, arguing that complex organizations like P&G need to consciously consider what type of decisions are being made at different levels, and therefore the best way to tackle them[3]<\/a>.<\/p>\n

Here\u2019s our summary of McKinsey\u2019s latest ABCD categorization of decisions:<\/h2>\n\n\n\n\n\n\n\n\n
Decision Type<\/th>\nDescription & Guidance<\/th>\n<\/tr>\n<\/thead>\n
Ad hoc decisions<\/strong><\/td>\nUnfamiliar, infrequent, and lower-risk decisions. Not likely to cause great ambiguity or complexity, so manage as efficiently as possible as they arise.<\/td>\n<\/tr>\n
Big bet decisions<\/strong><\/td>\nInfrequent, high-risk decisions such as major investments.<\/p>\n
    \n
  • Appoint an executive sponsor to ensure a clear problem statement, recommendation, NPV, risks, and alternatives are presented.<\/li>\n
  • Break down into smaller decisions and assess systemic impacts.<\/li>\n
  • Use standard decision-making approaches to avoid bias (e.g., checklists, devil\u2019s advocates, competing analytic teams).<\/li>\n
  • Adopt fast-but-good decision making, committing to the end result.<\/li>\n
  • Develop tracking and feedback mechanisms to evaluate success and refine the process.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Cross-cutting decisions<\/strong><\/td>\nFrequent, high-risk decisions requiring collaboration across functions.<\/p>\n
    \n
  • Avoid simplifying to a single decision owner.<\/li>\n
  • Map out each decision-making process, define roles and decision rights, and keep it simple.<\/li>\n
  • Use real-life scenarios to test and refine processes.<\/li>\n
  • Establish a few overarching governance\/decision-making bodies to act outside standard meeting times and accelerate action.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Delegated decisions<\/strong><\/td>\nFrequent but low-risk decisions that should be delegated to the front line.<\/p>\n