Steven's Blog

Master the Matrix

While I sometimes hear CEOs complain about their lack of authority in a matrix organization, the most successful CEOs I know never do. They have all mastered the matrix, wield tremendous authority, and influence their own and the business’s advantage despite the ambiguities inherent to a matrix organization. If you are the CEO of a Japanese operation of a global company, work within a matrix organization, and you feel your authority is stymied, think again. You just might have far more power and authority than you realize, if you know how to wield these right.

I have never met a CEO of an operation in Japan, whether working within a matrix or not, who is not held accountable for business results. If you are held to account, you have authority. Otherwise, why else would you need a local leader of the business? If you think it is not your place to hold managers in your operation accountable for behaviors and results that are important to you simply because their reporting line to you is dotted, think again. It is your place, solid reporting line or not!

The CEO of a French company’s Japan office told me she observed how marketing, sales, and product development teams failed to execute locally on a global strategy, but felt powerless to do anything about it. “They each have business unit heads in France to whom the Japan team leaders report. They are not in my reporting line. I have no authority over them.” Yet, she is mistaken. She has the authority, but is hesitant to use it.

If you are the CEO of a Japanese corporation, your authority is broad and clear—at least legally. You have the independent authority to hire, fire, order changes, dispense funds, and enter into contracts as you see fit. It’s only fear of the consequences of wielding such authority that holds some people back. Now, I am not talking about abuse of power here. I am talking about the reasonable exercise of authority as the representative director of the business, even when others in your head office might not agree with you.

The leaders of global business units in a head office overseas have no easy job when it comes to leading people in your operation, particularly if they encounter any type of passive or overt resistance—or even just complacency. This is to say nothing about overcoming the challenges of poor English skills and obtuse language prevalent among Japanese staff in many organizations. It is hard to hold people accountable from afar, so much so that one CEO in Japan confided in me that the global business heads in his company’s head office despise having to deal with the Japan office for this very reason. And he should know; he used to be a global head!

The reality is that, even in the best of cases, a global business head overseas requires the help of the local CEO to hold local managers accountable for behaviors and results, despite their formal authority and solid reporting line. If you are a local CEO, only you can confront local staff, understand realities on the ground, and hold a manager’s feet to the fire when necessary. The global head relies on you for his or her success. The converse is also true, as you likely know. It is difficult for you to impose your requirements on a local manager if the global head does not also back you up. You both depend on each other for success. Compromise the objectives of either of you, and you will both fail. The most successful Japan CEOs I know, who work within a matrix management system without exception, succeed by co-opting global business unit heads. Click To Tweet

If you lead an organization in a matrix, you can succeed in the same way. If you want to assert your authority over local managers, but have been at a loss as to how to do so, give the global business unit head a call. Find out what his or her priorities are for the staff in your organization and ask how it’s going. If you have frustrations with local managers and staff in that unit, it is likely that the global head does as well and will be receptive to your offer of help. If you have distinct priorities for the staff, it is reasonable for you to ask the global business head for help when holding managers accountable for what you need in return. You will likely get their help.

But what do you do when a global business unit head does not want to cooperate with you and is not sympathetic to the priorities you have?

Local CEOs always trump global business heads. You can assert your authority if it is in the best interests of the business, and you can prevail. If that means in extreme cases removing a local manager despite the wishes of the global head, you do so. I know two Japan CEOs of global companies each of whom fired their local HR directors for failing to act in the best interests of the business, despite the vehement protests of their respective global directors of HR. In the end, the global CEO backed each of the local CEOs in the decision over the protests of their heads of global HR. Every global CEO knows that HR directors come a dime a dozen whereas a CEO who can lead a business in Japan and deliver outstanding business results is rare and worth his or her weight in gold. Never underestimate your unique value to the business and what that implies for your influence and authority.

Does this mean that you should fire people willy-nilly to establish yourself as the proverbial alpha male? No, of course not. However, you must be viewed as unafraid to exercise your full authority if you are to be taken seriously in any confrontation.

A Japan CEO I know confronted a global head of sales on a performance deficit issue with the local director of sales. In doing so, the local CEO held the global sales head accountable for performance improvement of the local sales director with clear targets within a defined time frame, or the local CEO would otherwise remove the local sales director. Even though neither the local CEO nor the global sales head had formal authority over the other, the global business head recognized he could not just ignore the priorities of the local CEO.

While the time frame they negotiated was longer than what the local CEO would have liked, the global head of sales and the local CEO both agreed it was reasonable, and each held the sales director to account jointly. The sales director improved and avoided termination in this case. Had the local CEO simply given up however claiming he had no direct authority to impose his will, nothing would have changed and the business would likely have suffered as a result.

Most managers understand company politics, but it is the expenditure of political capital that counts. The best leaders are unafraid to spend theirs. Never hesitate to spend yours.


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