Matrix management in long-range planning

ABSTRACT. This paper reviews some experiences in the use of project management techniques for the development of long-range planning in several large corporations. Some criteria for the use of project teams are presented along with the advantages and disadvantages thereof. Project management is offered as an approach for the study of alternative long-range strategies.


The concept of project management continues to grow in maturity earning a rightful place in contemporary management thought and theory. Bureaucratic forms of organization, depending on a strict application of line and staff structure have come under attack and have been modified by Matrix Forms of organization. Indeed, some “informal” form of matrix organization is found in virtually all organized activity. Mounting evidence suggests that matrix techniques can be applied to a wide variety of enterprise activity, not only in terms of managing specific projects, but within the management functions themselves. This paper will describe a representative series of situations in which project management techniques were used to set up and operate long-range planning systems in several U.S. corporations.

Why Project Management in Long-Range Planning

Nearly every text dealing with long-range planning, almost as an afterthought, devotes a section near the end of the book to “Organization for Long-Range Planning.” In such sections, much ado is made of “line versus staff’ and whether the long-range planning staff should be at the corporate level, division level, or both, on the organization chart. Little in the way of a creative approach to the long-range planning process is put forth, and few documented cases of innovative planning organizations are available.

Of course, the concept of a “planning organization” is itself not well understood in any context other than that of a professional planning staff. Most organizations operate as though long-range planning were simply another aspect of the manager’s job, or alternately, as though only top management and professional planners should have anything of substance to do with long-range planning for the overall organization. These two concepts, either alone or in combination, presume that long-range planning should be done within the framework of the existing traditional bureaucratic organization.

Modern organizations are simply too complex to expect a manager to do his long-range planning by himself or through a professional planning staff. Adaptive organizational approaches have to be used which facilitate a wide-spread participation by both generalists and specialists in the organization. “Good ideas,” often the harbinger of future products, can be lost in the bureaucratic maze if a multi-layered chain of command stifles the generation of ideas and complicates the process of bringing them to fruition. For truly effective long-range planning, the planning effort must be resourced with the skills and knowledge that exists at organizational interfaces at all levels. The use of matrix management techniques permits this organizational interfacing.

Long-range planning is innovative in nature — the translation of some form of invention into production in the company. A project team brought together to generate and evaluate emerging innovative ideas might find answers to the following questions:

  1. What is the nature of the future business opportunity? What function does it serve?
  2. What and when is the need?
  3. What is the marketability?
  4. What is the competitive situation?
  5. What is the organizational capability?
  6. What investment is required?
  7. What is the influence of political, social and economic considerations?
  8. What specific strategy should be developed to satisfy a market need?

Of course, the selection of particular opportunities for further funding must be done by the chief executives of the organization. The use of project management teams to evaluate long-range opportunities is important, both from the standpoint of its effectiveness and the message which it conveys to the rest of the organization: “Innovation is important in this organization — so important that an interdisciplinary-participative ‘organization’ has been created to manage innovation.”

Some Practical Experiences

Within several U.S. corporations, project teams were set up to evaluate the following market opportunities:

  1. Health Systems Business Area
  2. Postal Systems Business Area
  3. Waste Water Treatment Systems Business Area
  4. Defense Systems Business Area
  5. Airport Security Systems Business Area

The project teams were charged with the overall responsibility for evaluating future project opportunities and strategies in these areas.

The general criteria used for selecting people to serve on the teams consisted of:

  1. Experienced, proven specialists and managers.
  2. Young “turks” who showed high potential in their work.
  3. People who were known for their candor and analytical ability.
  4. Interdisciplinary and interorganizational representation.
  5. Peer authority/responsibility relationships.

Typically, the appointment of these project teams was preceded by a tentative statement of strategic business purposes in each of these areas by the chief executives involved. The broad charge given to the project teams permitted each project manager to form an interdisciplinary, inter-organizational membership on his team. Each project leader was given a letter of appointment by the Chief Executive, and a budget to use in defraying the operating expenses of the team. Usually, the project managers reported to the executive vice-president, who in turn headed up the Strategic Planning Committee for the Corporation. Each project manager was considered the alter-ego of the chief executive in studying and evaluating the business area opportunity.

At the onset, the chief operating executive explained the project charter to the project teams and the line managers. A timetable for the effort was laid out. The project teams were appointed for a period of six months; only the project manager was appointed full-time.

Each project team was charged with the responsibility for the development of a position paper which evaluated the preliminary strategic purpose for the business area originally developed by the corporate executives. The position papers required the development of a defensible rationale for the final set of strategic business objectives. Each project team was required to interface with other teams and functional elements during the course of the planning study. Factual data, assumptions, logic sequence and such generic material was coordinated across project team lines. The development of the position papers by the project teams required that the following tasks be performed:

  1. A study of the preliminary strategic purposes to determine overall suitability.
  2. An examination of the adequacy of premises and forecast data used to establish preliminary strategies, and preparation of amended data bases, if required.
  3. A definition of data base input from other teams and functional elements.
  4. Validation, revision, addition to, and/or deletion of strategic purposes.
  5. Recommendation of planning implementation responsibility assignments necessary to support corporate strategic purposes.
  6. Development of supporting sub-objectives as required and recommended planning responsibility for sub-objectives.
  7. Forecast of necessary total resource requirements needed to attain the recommended objectives.
  8. Preparation of a position paper(s) outlining the team’s support/evaluation of a strategic purpose.

A schematic outlining a modus operandi for the project teams is reflected in Attachment #1. (See back wallet)

The position paper(s) developed by the project teams underwent several reviews within the corporation, in particular by those line officials who would ultimately be responsible for implementing the strategic plans. Where a significant conflict was found to exist, joint meetings were held to resolve the conflicts. In most cases, the conflicts arose from data inconsistencies or disparity in objectives, rather than from any serious organizational problems.

Advantages/Disadvantages of Using Project Teams

The advantages of using a matrix organization in supporting long-range planning systems were found to be:

  1. A “checks and balances” through concensus in the decision process was provided.
  2. An “organization” was created to facilitate innovation. The organization structure tended to be informal, communications were rapid and easy, personal involvement through participation was enhanced.
  3. A widespread involvement in the long-range planning process created an acute awareness in key people of the need to develop future strategies.
  4. The tendency to over-emphasize planning for a particular organizational element, for a particular functional area, or for simply extending an existing product line, to the neglect of future organizational objectives was reduced.
  5. A “culture” for long-range planning was created. This meant that an accepted and demonstrated belief was developed on the part of the participants that long-range planning is an accepted and continuing way of life in the organization, not just a necessary evil which is carried on cyclically.

It is doubtful if such a “culture” would have resulted if the planning had been carried out by a centralized planning department or by a division staff. When such a culture exists, the benefits of planning are not left to vague assurances that “… the value is in the process rather than in the plans themselves” since such an approach lends itself to the assessment of future strategies to a wide range of persons.

Disadvantages of Using Project Teams

There were some disadvantages to using project teams to develop long-range plans. The appointment of such teams suggested change in the organization; the threat of change was keynoted — particularly to the champions of existing product lines. Initially some existing line managers felt that the project teams would infringe on their perogatives. This fear quickly disappeared when the project teams made their first progress reports and the line managers began to appreciate the tremendous data base that had to be evaluated — the line managers then welcomed the project team’s help.

Another problem existed at the beginning, viz., a lack of commitment by individual team members. Since the team members were working on the project on a part-time basis, there was a natural tendency to feel a close bond with the parent organization. This dilemma was quickly resolved by giving the project manager funding on the long-range planning effort. This priority, coupled with the quality of the early work of the project teams, soon dissipated any significant resistance.

While not a disadvantage, the project teams did create much more discourse and debate within the company than had been known before. Line executives found themselves doing more listening and resolution of “conflict” than had been done in the past. All of this was time-consuming — but in the end well worth the effort. The company became much more of an “organization of peers” than previously — a high degree of personal involvement in determining organizational fortunes. There was an appreciation of the other fellow’s problems and points of view and a clear recognition of the organizational interfaces that had to be brought about to develop future strategies.

Other practical problems emerged in the operation of the long-range planning system. The concept of a “planning organization” was itself not well understood other than in terms of a planning department. The professional dichotomy of the organization into one element for long-range planning and the other for current operations was difficult to sell. Fear of loss of managerial prerogatives was present. In the past the companies had operated as though strategic planning were simply another aspect of the manager’s job, or alternately that only top management and professional planners should have anything of substance to do with strategic planning for the overall organization.

But most importantly, the use of project teams extended widely the involvement of key “contributors” in the long-range planning process. The chief executives still had to make the final selection of long-range opportunities. But these executives had much more confidence in the credibility of the long-range planning data bases because of the “Checks and Balances” inherent in the project team approach. Thus, the final selection of strategic purposes provided a better base for future operations.


Long-range planning is a function which places heavy demands on an organization’s ability to innovate. Effective organizational approaches to such innovation requires the satisfaction of certain conditions. First, the effective interfacing and focus of functional specialists. Second, the providing of an environment where entrepreneurial risk-taking is facilitated widely throughout the organization. Finally, to avoid bureaucratic delays, the placement of operating responsibility for long-range planning results in the hands of competent people wherever located in the organization.

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This reaction is not vastly different from those which many of us have encountered when attempting to improve the management of projects by utilizing various “management tools”.

The question arises — Who promotes the mystique of PERT? Is there something about the tool iself which leads people to react to its power? Or is it the people who practice or promote the tool within organizations? Are PERTer's given too much or too little “clout” in an organization? What makes school administrators or board members feel that they will do a better management job simply by using PERT, a “sophisticated management technique from private industry”?

Of course, PERT is a “powerful management tool” and rather “sophisticated” at that, especially with its many variations in the computer processing theme. However, it will never replace the judgment of the very people it is intended to serve. A PERTER is not a project manager, although there are times when every PERTER thinks he is (and there are times when he might be). He is not a project manager just because he PERTS, writes computer programs, or can add or subtract.

On the other hand, wouldn't we all like to believe that authorities responsible for project management were aware of all the tools, techniques, attitudes, habits or “whatever” which might help a man do his job more effectively? Educational project managers and teachers might use any tool, including PERT, for any valid reason. They might study the tools and adopt some features and discard others as they synthesize that particular system which best fits their application. But most of all, they might put the emphasis on the manager of the project, rather than his prospective tools.

Bob Staples

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