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 / Autumn 2013 / Issue 72(originally published by Booz & Company)


Life in the Matrix

“We are now marching ahead to really complete the integration of the sales force,” says Padierna. “But that will bring, again, lots of culture alignment challenges.… So, I’m not going to let the new behaviors go. I would say that’s [priority]number one. And I think that it is already beginning to pay off.”

The cultural transformation program in PepsiCo Mexico Foods is still under way. It is part of a holistic multiyear transformation strategy that is led by Padierna, overseen by the executive committee, and designed by a transformation team. Although it is still too early to come to conclusions about its success, the signs are positive.

PepsiCo Mexico Foods recently received the Donald M. Kendall Award and the Business Unit of the Year Award from PepsiCo CEO Indra K. Nooyi. This is the first time a business unit has received both awards in the same year, a clear recognition of the value of what Padierna and his team are doing.

First Principles for the Matrix

For many companies these days, an effective matrix structure has become a viable way to achieve organizational success, if only because the demands of the global economy have grown more complex. At the same time, culture has become more challenging as an instrument of change because high-trust relationships are more difficult to develop and sustain across highly dispersed geographies. A decade ago, if a company sent a U.S.-trained executive to open a division in China, he or she would have already developed ties with colleagues and leaders at the corporate office. This would provide an informal and intuitive sense of whose support, at headquarters, could help make the venture a success.

Today, such a firm would be more likely to engage someone based in China to open the office there, giving him or her little opportunity to forge relationships or get a feel for the cultural situation back home. Without knowing the right person to call or the right questions to ask, a manager in charge of the Chinese operation might have no way to access information essential to success. The result? The manager’s potential would never be fully realized, and lessons learned in other parts of the organization will go to waste.

A structural matrix can help address these global complexities, providing the individual with a broader range of reporting channels and more formal connections to the firm. But if people on the ground don’t have personal connections across geographies or speak the uncodified language of the organization, they will be operating with limited information and resources, and their behaviors may undercut what they are in good faith trying to achieve.

As Douglas Conant, former CEO of Campbell Soup Company, suggests, a guiding principle for a matrix-bound culture could be as simple as “It’s a win for both of us or there’s no deal.” The enterprise leader should then provide just enough structure for people to make progress, while letting them figure out the actions they need to take to get there. In effect, this approach allows people to construct the matrix experience themselves. Once they begin to make progress, their new behaviors will start to feel natural, part of their experience. When this happens, the organization is on its way to cultural alignment in a way that fits its strategic and operating priorities.

A company’s ultimate goal should be to liberate the emotional energy of the matrix, to unlock its full potential by emphasizing the importance of its cultural aspect. With that process under way, people throughout the organization can take on together the hard but rewarding work of building a high-performance, collaborative company. 

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