We find out how one medium-sized company has integrated its employees into an international management scheme which also helps them present a united business front to the client.

Cross-organisation helps to support customer demands.

International companies have always faced the growing pains of spanning several continents. Companies run the risk of degrading communication and inter-company relations as international managers strain to oversee across oceans without leaving someone out.

Waters Corporation, a mid-sized medical technology company that has operations in the Americas, Europe and Asia, says its matrix HR management structure is all-inclusive across both geographical and hierarchical borders.

"We have a very strong and healthy corporate culture," said Paul Warner, global vice president for HR at the company's headquarters in Milford, Mass. "It's a culture of mutual trust, of openness and communication, and ultimately it does a superb job of maintaining its people, as our turnover rates are surprisingly low," Warner said.

Waters' seemingly ideal international organisation was a long time in coming, he admits. Though the company has been in operation over two decades, Warner said they began to view themselves on a global scale just three or four years ago.
 
"We needed to think about a future in which we had cross-fertilisation and cross-organisation to support customer demands," he said. "In order to drive our company to that state, we needed to create a worldwide HR structure that would pull the company along with it."

Though Waters became a wholly-owned company in 1994, it continued the geographically-based HR organisation of its former parent company well into this decade. But as the company grew and its product portfolio became more diversified, it was no longer viable to keep their overseas operations autonomous from their headquarter-counterparts, Warner said.

This marked a large departure from the HR structures of many international companies. Waters began to integrate all their employees into a greater international management scheme.

"The genesis was several years ago when we began creating relevant cross-geographic and cross-functional teams," he said. "We've built on that year after year. We now have two levels of HR policies, those concerning global application, and those that are statute driven," Warner said.

"This creates a relationship with colleagues within the country but also a management relationship outside country," said John Freeman, Director of HR in Europe.  "That's where the matrix starts to come in. People have to collaborate at a country level as well as be working on a wider European level or indeed on a global level," Freeman said.

"This increasingly means that people are working in networks much more than they work in hierarchies," he said. "There's now a network of people who will be working on bringing a product to market as opposed to a hierarchy with a strict management structure."

While a close-knit corporate culture and low attrition rates are appealing, the matrix structure is also much more complex than a traditional geography-based HR structure.

"When you try to explain it, it doesn't seem to make a lot of sense. But in practice, it works quite well," said Rohit Khanna, vice president of worldwide marketing.
 
"Basically everybody's getting direction from a couple of different spots. Everyone has a solid line and a dotted line. If you're sick, that's clearly in the solid line. If it's a matter of which direction to take for products or initiatives, it's usually the dotted line."

Though day-to-day operations remain relatively simple, Khanna says, managing within the structure requires finesse.

"When I first moved to matrix structure, I wondered how I could get anything done. Especially at a central role, you have a tremendous amount of responsibility and ownership but almost no resources to get it done," he said.

"The big challenge is going from having control over the people within your structure to working through influence. In a matrix structure, you're selling every other organisation. You can work your way through the top of the structure and have them buy it down or work across and sell it across the board. You end up having to do everything twofold," Khanna said.

Despite the extra obstacles, he insists this is a good thing. "It forces the players at the top to learn to work together very closely so they're in sync. Then the teams below them can work across the matrix," he said. This forces everyone in the company to work more closely, and as a result, it presents a united business front to the client, he said.

"We want the customer in the local area to see a very strong local team," Khanna said. A matrix structure inherently provides this unity. "The more I spend in this, the more I realise this is the right way to do it. Within each country you have a very strong team to take care of a client from beginning to end," he said.

Waters combines the benefits of the matrix structure with a strong personal development and performance management program to ensure the continued unity of its employees toward their company.

"The idea is to create a Waters Culture and embed it in every geographic region in the world which will supersede the local culture," Warner said.

But a global Waters Culture is still far from fruition in some parts of the world, according to Whee Wah Ng, director of human resources for Asia.
 
"Concerning most of the day to day strategies and programs, the HR team in Asia has a lot of autonomy to make it relevant to this region," Ng said. Though her Singapore team keeps a close working relationship with other parts of the company, she says it isn't possible to directly transfer the full matrix scheme to her region.
 
"Organisations in Asia are culturally more stringent in our policies and practices. A non-Asian business unit may have employees in Asia but they're not used to the terms and conditions we have," Ng said.
 
"Managers managing a matrix organisation should be culturally sensitive as well. We must have different steps in our programs to reach the same goals," she said.
 
That's why yearly leadership programs become crucial to the matrix, Freeman said.
 
Managers from both geographical and functional chains meet on an annual basis to continue the dissemination of new information and ideas. "By understanding these problems and taking into account the views at a local level, they can then be incorporated into worldwide strategy," Freeman said. 
 
 "One of the themes of our leadership programs has been to show people that they can do more than they think they can and that people always have more power within an organisation than they think they have," he said.
 
This sense of power is integral to effective management within the matrix, Khanna said. "If [employees] really understand and believe in a strategy, they'll be much more successful than if their manager tells them they have to do it. The goal is to show them what you want and to sell them on the benefit of doing something. So, in the central organisation, influence becomes your true management style."
 
"I think it's an advantage to us to be a billion and a half dollar company where there are strong relationships," Warner said. "I believe this strategy can be applied in any size company if it's well understood.
 
"As we started working toward this matrix structure, HR stuck its neck out and took a risk," he said. "They understood the strategy and there was trust among us. In some cases there was blind trust. I guess you need that in order to drive change," he said.

July 2006

Victoria Fine is a freelance writer based in the US. 

Subject: International HR management, HR policies, international HR structure