How Internal Capabilities Evolve
Yesterday I wrote about how activist investors dislike matrix structures.
They're right to dislike them, especially if you take a surface view, and/or view them as one of two outcomes: we can be decentralized or centralized, and orgs swing between decentralized free-market entrepreneurship and centralized bureaucratic integration.
I think this misses the point of the matrix (as does the idea of striking a balance between SBUs and matrices with jumbo shrimp Center-Led Empowered BUs.
There's a third option: see matrixed capabilities as a waypoint on the journey toward an operating system where capabilities produce tooling for BUs to do their thing. Where the center isn't in charge but rather a set of highly specialized internal consultancies that make the organization more competitive.
I've been able to watch this journey play out in a few organizations where capabilities were created, grew into Global Functions™, and then transitioned into this Third Thing.