Thursday, December 20, 2012

How to describe organization structure - Matrix versus Lattice

It bothers me that the way enterprise architects talk about organization structure is so imprecise. Take for example "lattice management".

There are lots of consultants and business school pundits talking about "lattice management structure", as a quick Internet search will confirm, and a few business organizations appear to have adopted some form of lattice structure.

I was in a discussion where someone declared that lattice management was just the same as matrix management. Given the optimistic vagueness with which management gurus peddle their thinking, and given their propensity to attach new labels to second-hand concepts, it is hard to be certain about this. However, there do seem to be some important differences between matrix management and lattice management.

Matrix management often looks like an intersection between two or more hierarchies - so you report up one management ladder for certain aspects of your work, and up another management ladder for certain other aspects of your work, thus solving some problems with the simple hierarchy. (Opponents of matrix management argue that it introduces more new problems than it solves.) Whereas lattice management is being described in terms of horizontal and diagonal flows, as well as horizontal and diagonal career moves. Is that the same? Who knows what these descriptions really mean?

According to some accounts of lattice management, there aren't any bosses.

My first mentor in data modelling, Raimo Rikkilä, taught me that every question had three possible answers: zero, one and many. Thus there are three possible answers to the question "How many bosses do you have?"

One Hierarchy
Many Matrix
Zero Lattice

Each of these structures offers a different (imperfect) solution to the problem of accountability. In a lattice organization, one is primarily accountable to the customer. This relates to what my friend Philip Boxer calls East-West Dominance. See also his post on Architectures that integrate differentiated behaviors, where he indicates the limitations of matrix and the potential of lattice.

The example of Lattice Management that everyone cites is W.L. Gore. Many people complain that this isn't a perfect implementation of the Lattice concept. But then I've never seen an organization that implements the Hierarchy or Matrix concept perfectly either.

You might also complain that a singular example is a bit problematic. There are other singular organizations that attract a lot of attention, like Semco. Incidentally, according to some sources, Semco adopted a lattice structure in the mid 1980s, but has since moved to something even sexier.

But the management literature is teeming with singular or extreme examples. Amazon whenever the platform business is discussed. Shell whenever scenario planning is discussed. Apple, Toyota, and so on. If we were to ban singular examples, much of the management literature would disappear.

There may be some extremists who believe that a lattice management structure is suitable for every organization, although we might reasonably be sceptical of such a claim in the absence of much practical evidence. A more moderate (and more plausible) position is that many organizations could benefit from a lattice structure. So we might ask why don't MORE business organizations adopt a lattice management structure, and what inhibits organizations from adopting more innovative structures that might benefit them.

One likely explanation is that there are some stakeholders who strongly (if covertly) oppose such structural change, perhaps because their own personal power base depends on traditional lines of authority.

Another explanation is that there are some aspects of organizational structure that are so deeply embedded that they are hard to change, even when all stakeholders are willing to change.

In general, there are some kinds of structural change that a given organization is capable of adopting, and other kinds of structural change that would be very difficult if not impossible. This is undoubtedly something that business architects need to get a handle on.

Cathy Benko, Molly Anderson and Suzanne Vickberg, The Corporate Lattice, A strategic response to the changing world of work (Deloitte Review)

Cathy Benko and Andrew Liakopoulos, The Corporate Lattice (Talent Management, Jan 2011)

Cathleen Benko and Molly Anderson, The Lattice That Has Replaced The Corporate Ladder (Forbes March 2011)

Gary Hamel, Innovation Democracy: W.L. Gore's Original Management Model (Management Innovation eXchange, December 2010)

How "don't use the B-word" applies in lattice-structure management (MetaFilter, July 2011)

Marie Wiere, The Pros and Cons of a Hierarchy Free (Lattice) Organization Structure (May 2012)


Marie Wiere said...

Thanks for linking to my post Richard.

This was a great blog post. I like how you clearly differentiate between the different types of organizational structures by aligning number of managers with the type.

Ironick said...

Don't forget peer production. Lattice management sounds like it's saying many of the same things.

Ivo said...

I can't help linking lattice structure with cellular automation. In the quest for understanding complexity, from John von Neuman to Stephan Wolphram, experiments using lattice of "stupid" cells in which intelligent behaviour emerges after some number of runs of a set of rules, have been the primary source of understanding various CAS. Unfortunately I find the word "lattice" used for labelling various structures that are alternative to the classical ones. I'd be happy to see, apart from the luck of central authority, also evolutionary development as a distinguishing characteristic. If not, there are other nice words available.
(By the way the cited book "The Corporate Lattice" points out as the first distinguishing characteristic: "flatter, often matrix structure". So, matrix or lattice?)

Nick Kaufmann said...

great post about a field and scholars I wasn't at all familiar with, will definitely be referring back to this, thank you

Peter Parkinson said...

I have elsewhere referred to four terms/structures: 1) Flat: you all work for a business owner or in a collective. This is a small business pattern. I mention it only because some discussion of lattice management seems better described as flat. 2) Hierarchy: you have one manager who authorises all work you do
3) Matrix: you have two or managers, usually with different roles. For example, one (persistent, functional) manager may hire you out to work for another (transient, project) manager. In this situation, the persistent functional manager may have relatively little authority.
4) Lattice: you have no particular manager. Anybody can ask you to do some work, and if you have the time, will and ability, then you will probably do it. Or you may choose you own work.

I gather you, Richard, talk about 1) hierarchies, 2) networks, 3) markets and 4 clans.

Is a wholly un-directional lattice any different from a network? Alexander (1966) pointed us away from a hierarchy to a semi-lattice. I think a semi-lattice is akin to a directed graph in that it has a top and bottom?

Raimo Rikkilä said...

Thank you very much Richard for remembering one of my basic principals when modeling any organisational patterns or ways of handling phenomens that one can observe in the world!

My basic formulae of zero, one and many I also have adapted in a basic way of describing anything on three levels. The top level I refer to as the "conceptional level". It describes what you want, what is strived for, what must be underlying any other activities. You see the question word WHAT is anchored here. The middle level I call "infrastructional" because all questions based on HOW are answered with the methods contained in this level. The bottom level I refer to as "Physical" because here are the means anchored that are described by WITH WHAT.

A small example concerning personal relationships:
Conceptionally I am convinced to have found my dream partner to live with. To work out how to realise that relationship I need to concern a lot of infrastructional aspects: Do we share the same appartement, do we share bed and briefcase, what to do with our respective children from previous relationships etc. On the bottom level we find each other attractive, share the bed, share the dinner table, occasionally live temporarily in each others appartement, share each others interests like books, musik, tv, politics, cultural and sports events and so forth.

I hope this gives you an impression how the complete model that describes everything might be looking. As you see I'm still active in the thinking business.

Hope to hear from you sometime,
your very old friend Raimo Rikkilä

iHowPC said...

There are six basic building blocks that managers can use in constructing an organization which also known as elements of organizing or organizational structure.

Shalin Siriwaradhana said...

Well flat and matrix have similar characteristics, yet flat is the best structure to used for responsibility distribution. Its used by tech companies because they want to keep things simple enough to be done by anybody. You can find more examples of flat and matrix organizational charts in the diagram community of Creately Org Chart Software .