This article first appeared in edition 07 of Accountancy Futures journal (August 2013).
Matrix structures can be complex. They can eat time. Indeed if not managed well they can be the enemy of any sort of progress. What has emerged repeatedly as a theme in my work, though, is that the characteristics that work well in a matrix are the same ones that lead to good innovation.
But isn’t innovation all about the lone scientist or maths guru having a ‘lightbulb’ moment? In most fields today, this is no longer the case. In biosciences, for example, where I do a lot of work with organisations, it’s no longer possible to make new discoveries with the capabilities of just one lab. Most of the significant advances that can be made by one single lab have already been made. Innovation these days needs more capability. And it’s here where matrix skills cross over into innovation.
One project in particular made me aware of this – the US Innovation in Federal Government project. In our work with federal employees across government, we came across award-winning leaders who seem to have a knack for making innovation happen, whatever the obstacles. We interviewed 15 of them to see what we could learn from their stories.
What was striking was that all their innovation stories were about collaboration across boundaries. The characteristics of their success correlated closely with what we were finding in a study of high-performing matrix organisations. If you want to innovate, this suggested, act like you’re working well in a matrix – and vice versa.
The leaders shared a set of attributes:
- Resilience. They aren’t seriously impeded by structural, procedural, cultural or political barriers. And when they do encounter resistance, they don’t give up.
- They are visionary, self-aware and constantly broadening their perspective.
- They know how to navigate through and around their organisation’s structure, culture and politics. They also understand and respect the roles, boundaries and agendas of other organisations.
- They purposefully leverage networks and relationships, and use complex influencing skills to collaborate across organisational boundaries.
- They build strong, diverse teams through their leadership, creating a sense of purpose, fostering a climate that facilitates innovation and developing others as an essential part of their job.
One case study from the government programme perfectly illustrates the relation between matrix and innovation skills (see panel on Alfred League).
Collaboration: a marker for success
Another study I worked on backed the findings from the project. This time we were looking at a ‘hard-science’ company that derived its competitive advantage from a steady stream of innovations. Out of the behavioural interviews we carried out, we compared the best innovation stories with less successful ones. The ability to collaborate was a huge marker for success. One of the company’s scientists, in talking about an innovation that went wrong, admitted: ‘My mistake that time was that I tried to go it alone.’
In this scientific company we also found an overlap between the skills that make for good innovation and the capabilities that help people work across boundaries. The good innovators and the effective matrix operators shared an ability to understand others and see things from their perspective, great self-management skills, and excellent personal resilience. Indeed, the ability to deal effectively with failure is a powerful marker for success for both matrix stars and top innovators.
It turns out that characteristics like these are also what we call ‘growth factors’ for senior leaders – that is, the tell-tale signs that show a person is cut out to do well in top jobs. We discovered this while working for clients who had asked us to help them identify high-potential talent. They wanted to know how to pick out their next generation of leaders. Could the next CEO or CFO be identified early in his or her career? Was it possible to predict what people would be capable of five to 15 years into the future?
Personality, not intellectual firepower
Looking into Hay Group’s data we identified four characteristics that predicted leadership. They were an eagerness to learn, take risks and to get outside your comfort zone; possession of a broad perspective; personal maturity and emotional self-control; and being able to understand others.
These growth factors closely match the competencies that support innovation and collaboration. Scientists, for example, are much more effective when they seek different perspectives on the area they are innovating in. Inviting people with different skills and opinions is more likely to crack the problem than recruiting in your own image.
The research of Howard Gardner, a celebrated psychology professor with whom I worked at Harvard, underlines the importance of risk-taking to innovation. In his work on creativity, Gardner suggests it is more about personality than intellectual firepower: ‘Individuals who enjoy taking risks, who are not afraid of failure, who are attracted by the unknown, who are uncomfortable with the status quo are the ones likely to make creative discoveries.’
What of innovation in the finance industry though? Like risk, innovation has become a loaded term in this sector recently. It seems to get companies into trouble. Too much innovation – for example creating financial instruments of byzantine complexity – has been blamed for triggering the financial crisis. Arguably, what financial companies need right now is a different type of innovation. One that helps them connect with customers and serve them better. We’ve seen this in developing markets like India, for example, where mobile banking took off quicker than in the West.
When we benchmarked the leaders of financial functions, two factors stood out that separated the best from the rest. In their stories, the best leaders said that when someone made an irresponsible suggestion, they pushed back: they had the emotional maturity to refuse. Second, we found that the best were also good at developing others. Both of these factors are also important in innovation. Good leaders can make good innovators.
Within all organisations, financial departments have a strong influence on innovation because they hold the purse strings. If they can bring some of the skills we’ve discussed so far to bear on the issue, though, they can help foster, rather than hinder innovation. The classic cases here are Google and 3M, both companies whose leaders were prepared to take the risk of giving employees time to work on their own projects and which have yielded innovations including Google News, Gmail, Post-it Notes and Scotch brand tape.
And when finance departments add to judicious risk-taking another great innovator’s trait, the ability to manage failure, they can help keep the flame of new development going. This can be as simple as creating a culture in which unsuccessful projects are shut down honourably, rather than becoming career threatening for the innovator in a way that would discourage any further attempts.
The power of collaboration
In summary, our findings from many different studies and stories point to a powerful correlation between good matrix skills, good leadership, and successful innovation. It turns out that if you’re looking for the next big thing, the best way to find it may be with skilful collaborators, not rocket scientists.
Matrix structures are characterised by people, regardless of formal structure, working together across functions. They are common in most global organisations, where they are virtually the only way to manage and benefit from multiple geographies, product lines and customer groups while delivering economies of scale. It is not enough just to be able to lead; it is also essential to be able to collaborate with different sets of individuals and influence people over whom you do not have direct control. Successful matrix organisations, which also happen to be prominent innovators, are 3M, Microsoft and Procter & Gamble. According to Hay Group, ‘The matrix structure should not run the company; it allows the company to run.’
Alfred League is the ultimate team player and team leader. Just a week-and-a-half after League, then division chief for imagery and geospatial sciences at the US National Imagery and Mapping Agency, received an urgent request from the armed services in Iraq and Afghanistan, he was able to deliver the first of many instalments of an innovative software package that provided satellite views of the battlefield to help personnel make informed decisions and save lives.
Neither League nor his staff knew exactly how to produce such computer software when the request came in, but this was of minimal concern. Although outside of his group’s normal purview, League was eager to take on the project. He felt both a duty to contribute to the larger mission of protecting people and country and, based on his knowledge of current technology and past projects, he had confidence that he could help. Gathering everyone around the lunch table, League presented his team with the task and background. The team was assembled from across the organisation and had a wide range of experience. Sandwiches in hand, their ideas started to fly.
Connections were quickly made to private-sector companies that had technology with the potential to be part of a solution. When promising software was discovered, League flew out to meet the owners and personally ask for their partnership. League and his team quickly adopted the technology for military use, and over time made refinements. The technology that League so quickly deployed offers the military crisp, real-time photographs of the battlefield taken from satellites and provides essential intelligence information that can be viewed on laptop computers by military personnel in the field. This technology has been adapted for widespread civilian use, allowing individuals to easily use their home computers to look at satellite photos of buildings, neighbourhoods and communities.
Signe M Spencer is a global leader for capability assessment for Hay Group, the global management consulting firm. Her 20 years’ work with the group has included competency research, such as integrating competency findings across a wide variety of jobs, improving methods of competency research, designing and validating competency applications, and coaching executives. Her role includes conducting high-level assessments for senior executive and CEO succession and selection.