What is a matrix organization—and how to create one

Picture this: you're leading a project designing a new user interface. In a traditional hierarchy, product designers report to a design director. But what if your initiative involves developers, marketing, and customer success teams? A matrix reporting structure can help you build a collaborative work environment and set up your project for success.

Read on to find out:

• What a matrix organization is, and how it supports teamwork across functional departments
• Advantages of the matrix organization—plus three common matrix management styles
• How to set up a matrix organization in five steps with FigJam

What is a matrix organization?

A matrix organization is a management structure where team members report to two managers with equal authority. One manager looks after individual contributors' daily functional roles. The other focuses on their project work.

NASA was an early adopter of the matrix organizational structure to align diverse expert teams around their moonshot mission. Today the aerospace industry and software companies often use it for complex projects. Even traditional top-down financial organizations use matrix systems for mergers and acquisitions.

Benefits of a matrix organization

How does a matrix organization help product and design teams bring their visions to life? One word sums it up: teamwork. A matrix organization can support the company and product development teams in four key ways:

• Improved communication. A matrix organization encourages open communication across departments and stakeholders, so no one gets stuck in a silo. Open channels connect product designers with team members from different departments so they can share design insights, learn new skills, and achieve project objectives.
• Effective team collaboration. A matrix organization structure helps designers and developers solve technical challenges together. When product teams collaborate with the marketing department, they can build innovations that advance brand and growth goals.
• Employee engagement. The balance of power and expertise between managers in a matrix organization boosts employee engagement and performance.
• Speed to market. A matrix organization system streamlines the product development process, so companies can launch new products and stay competitive.

3 pro tips for effective matrix organizations

To promote employee performance and project efficiency, matrix organizations must be well-managed. Keep three tips in mind to make the most of a matrix organizational structure:

• Establish accountability. Show who is responsible for what with a RACI matrix.
• Clarify reporting relationships. Organizational charts help eliminate confusion with dual chains of command. A project org chart template helps outline roles and hierarchical structures.
• Use decision-making tools. To avoid bottlenecks, outline your decision-making process with a decision tree.

How to create a matrix organization in 5 steps

Building a matrix organization requires planning—but with pro tools for collaboration, you can build a functional structure in five steps.

Step 1: Identify core teams.

Decide which departments to cover on your project organization chart. From each department, select team members who bring key skill sets to the table. Each individual will play a role in your matrix organization, and contribute to project success.

Step 2: Nominate dual managers.

Work with human resources or your department head to assign team members to dual managers. The first manager oversees their functional role, such as design or development. The second manager takes charge of specific project deliverables.

Step 3: Open lines of communication.

Outline a cross-functional communications plan, then build your comms channels into your project plan. Pro tip: project management tools like online meeting templates can facilitate communication.

Step 4: Establish goals and metrics.

A clear roadmap keeps team members and stakeholders aligned. Everyone on the team needs to know what project success looks like and how to measure it. Start by setting milestones, deadlines, and KPIs (Key Performance Indicators).

Step 5: Build a working agreement.

Even in well-organized cross-functional teams, conflicts can arise. Establish a team working agreement to build team trust and keep projects on track.

3 types of matrix management

There are three main types of matrix organization: weak, balanced, and strong. A "composite organization" combines two or more of these styles.

Weak matrix organization

In a weak matrix, the functional manager has the decision-making power. They control team resources and make key decisions to guide projects, similar to a traditional hierarchical structure. The project manager focuses on coordinating and administrative tasks.

Balanced matrix organization

The functional manager and project manager share control. Employees report to both, but the functional manager has the primary authority. Classic examples of this approach include Starbucks and Philips.

Strong matrix organization

In a strong matrix, the project manager controls the project budget and manages staff. The functional manager focuses on coordinating instead of decision-making.

Jumpstart your matrix organization with FigJam

Use FigJam’s collaborative online whiteboard to design your matrix organization. FigJam makes it easy to:

• Outline your action plan with FigJam strategic planning templates.
• Design an organizational structure chart to make everyone’s roles and connections clear.
• Evaluate project ideas and solutions using the impact/effort matrix.
• Chart project progress with the Figma chart plugin.
• Find inspiration from Figma's professional design community in the FigJam library.

Ready to plan for project success?