Matrix Structure Navigating & Making It Work

Matrix Re-loaded:
Navigating the Matrix Organization and
Making It Work for You

Ng Aung San

Head, Strategy and Corporate Management Information

1

Opening thoughts…
“Silence and look out, we shall catch both hen AND chicks”
Spanish Proverb

“If you chase two rabbits, BOTH will escape”
Russian Proverb

Matrix Re-loaded: Navigating the Matrix Organization and Making It Work for You ‒ Ng Aung San, Head, Strategy & Corporate MI Page 2
Strategic Corporate Planning Conference, Friday, 11th July 2008, Marina Mandarin, Singapore
Copyright © 2008 Great Eastern Life Assurance

Agenda

1.  Matrix Organization – What is it?

2.  Matrix Organization – Why bother?

3.  Matrix Organization – What s the problem?

4.  Matrix Organization – How to make it work for you.


Classical Centralized Functional Unit Organization

CEO Key Defining Characteristics:
§  Single dimension – Vertically
segmented by functions
§  One common set of functions serving
Market Head, Head, Head, Head, Head, different customer groups in the
Marketing Product Operations Finance HR, etc.
market
Customer/ Mgmt. & IT
Group §  Focus is more on internal process
1 standardization/ centralization
Marketing Product Operations Finance HR
Function Mgmt. & IT Function Function
Advantages:
Function Function etc.
§  Intuitive, and easy to understand –
Customer clearly defined single reporting line
Group
2 §  Expertise, knowledge and processes
optimized functionally
§  Low duplication of resource/ work
Customer §  High standardization/ centralization
Groups
3, 4 … Disadvantages:
§  Internally focused - Lack of in-depth
understanding of, and tailoring to
differences markets
§  Vertical silos – One Firm?
Customer Groups: §  Problems with hand-offs/ interface
§  Country – e.g. Singapore; Malaysia, China, Indonesia etc. between functions
§  Market Maturity – e.g. Established and Emerging Markets §  Problems with coordination and
§  Product Lines – e.g. Life and General Insurance and Investments communication across functions
§  Customer Groups – e.g. Retail and Institutional §  Slow response to market conditions


Classical Multi-Divisional Business Lines Organization

CEO Key Defining Characteristics:
§  Single dimension – Horizontally
Market Head, Business Line/ Customer segmented by business lines/
Group 1 (e.g. Singapore) customer group
Customer §  Different/ dedicated set of functions
Groups serving each business line
1 Marketing Product Operations Finance HR
Mgmt. & IT §  Focus is more on external market
orientation/ customization

Head, Business Line/ Customer Advantages:
Customer
Group 2 (e.g. Malaysia) §  Intuitive, and easy to understand -
clearly defined single reporting line
Groups
2 Marketing Product Operations Finance HR §  Expertise, knowledge and processes
Mgmt. & IT optimized by customer group/
business line
§  Nimble/ responsive to market changes
Head, Business Line/ Customer/
Group 3,4 … (e.g. China, Indonesia)
Customer Disadvantages:
Groups §  Horizontal silos – One Firm?
3, 4 …
Marketing Product Operations Finance HR §  Differing Customer Experiences
Mgmt. & IT
§  High duplication of resource/ work
across business lines
Customer Groups:
§  Country – e.g. Singapore; Malaysia, China, Indonesia etc. §  Problems with coordination and
communication across Business Lines
§  Market Maturity – e.g. Established and Emerging Markets §  Slow development, group-wide
§  Product Lines – e.g. Life and General Insurance and Investments sharing and adoption of best practices
§  Customer Groups – e.g. Retail and Institutional §  Low standardization/ centralization


The Matrix Organization – The best of both worlds? Or the twin ills?

CEO

Market Head, Head, Head, Head, Head,
Marketing Pdt. Mgmt. Ops & IT Finance HR etc.

Customer/ Head, Marketing Pdt. Mgmt. Ops/ IT Finance/ HR etc.
Groups Business Business Business Business Business Business
1 Line 1 Line 1 Line 1 Line 1 Line 1 Line 1

Customer/ Head, Marketing Pdt. Mgmt. Ops/ IT Finance/ HR etc.
2 Line 2 Line 2 Line 2 Line 2 Line 2 Line 2

Customer Head, Marketing Pdt. Mgmt. Ops/ IT Finance/ HR etc.
3, 4 … Line 3, 4… Line 3, 4 … Line 3, 4 … Line 3, 4 … Line 3.4 … Line 3, 4 …

Key Defining Characteristics:
§  Twin dimension – Horizontally AND Vertically segmented – Internal (process) AND External (market) focus
§  Different/ dedicated yet common/ integrated set of functions serving each different business Line
§  Executives hold twin citizenships – Business Line AND Functional units – and have (at least) two bosses
§  One dimension has to share power with other dimension – Setting Policy and Strategy; Resource; Executives time/
appraisal; Operational execution decisions etc.


Agenda






Fundamental Beliefs underpinning Matrix Organization…

There is Value in optimizing Global/ Group AND Local Tradeoffs…
§  Global/ Group: Take advantage of increased scale and cross-border synergies
through group-wide collaboration; Enhancing group competitive advantage through
competing as One firm; Benefits of collaboration > Costs

§  Local: Protecting/ capturing value of local activities; Staying relevant to local market
preferences and responsive to changes; Engendering initiative, entrepreneurship and
local adaptations that deliver local value.

... But it will require Collaborative Strategies, Structures and Systems
§  Collaboration will not happen automatically, and is in fact, counter-intuitive

§  Hence, need for explicit collaborative strategy, structures and systems – i.e. a Matrix
Organization

§  Group/ Corporate Centre has a role to develop and execute – or manage execution of
– collaborative strategy, structure and systems


So what is Collaborative Strategy…?

Group/ Corporate Centre

Multiple & Cross-SBU/ Lines of Business Single Stand-alone/
Enterprise
Collaborative Strategy Vertical SBU Strategy
(Creating Enterprise Value)
Value (Creating Customer Value)
Proposition SBU SBU SBU SBU
A B C D
Financial Synergies Financial

Vertical Strategy, Linkage &Alignment
How can we increase the shareholder What are our shareholder expectation
FE FA FA FA FA for financial performance?
value of our SBU Portfolio

Customer Synergies Customer
To reach our financial objectives, how
How can we share the customer CE CA CB Cc CD do we create value for customers?
interface to increase total customer
value?

Process Synergies Internal Process
How can we mange SBU processes to PE PA PB PC PD What are critical processes to deliver
achieve economies of scale or value value to customers and shareholders?
chain integration?

L&G Synergies Learning & Growth (L&G)
How can we develop and share our LE LA LB LC LD How do we align our intangible assets
intangible assets? to improve critical processes?

Cross-SBU Collaborative Strategy, Linkage & Alignment
Source: R.S. Kaplan and D. P. Norton. Alignment; GE Analysis (Creating Enterprise Value)


… And what are possible sources of Collaborative Value to enhance
Enterprise and Business Unit Competitive Advantage?

Multiple & Cross-SBU/ Lines of Business
Enterprise
Collaborative Strategy
Value
A B C D
Financial Synergies
Cross SBU/ Country Collaborative Financial Synergies:
How can we increase the shareholder FE
value of our SBU Portfolio Capital Management capabilities:
§  Internal Capital Management
Customer Synergies §  Asset/ Investment Management
How can we share the customer
CE §  Corporate Portfolio Management expertise
value? §  Investor relations
Process Synergies Effective Governance:
How can we mange SBU processes to PE §  Legal and Regulatory Governance and Compliance
achieve economies of scale or value
chain integration? §  Management Governance and Compliance
§  Governance and Performance Monitoring
L&G Synergies §  Financial Reporting and Control
How can we develop and share our LE §  Risk Management
intangible assets?

Source: R.S. Kaplan and D. P. Norton. Alignment; GE Analysis



Enterprise
Value
A B C D
Financial Synergies
Cross SBU/ Country Collaborative Customer Synergies:
value of our SBU Portfolio Shared Customers:
§  Shared brand name; shared advertising and promotion
Customer Synergies §  Cross-selling of products/ services
How can we share the customer
CE §  Interrelated pricing of complementary products
value? §  Bundling/ packaged selling or Solutions-selling.
Process Synergies Common Value Proposition:
How can we mange SBU processes to PE §  Consistent buying experience across geography, business
chain integration? lines etc., aligned with brand/ corporate standards

L&G Synergies Shared Channels:
How can we develop and share our LE §  Shared distribution channels/ sales force
intangible assets?
§  Shared service network




Enterprise
Value
A B C D
Financial Synergies Cross SBU/ Country Collaborative Process Synergies:
value of our SBU Portfolio Centralized development and Enterprise-wide sharing of:
§  Corporate business operating principles
Customer Synergies §  Business setup and management systems (knowledge,
How can we share the customer CE expertise, policies, standards, best practices, success
value?
formulas , frameworks, procedures, templates etc.)
§  Specialized Build-Operate-Transfer (BOT) Teams for
Process Synergies rapid/ robust market/ country entry and expansion
How can we mange SBU processes to PE
achieve economies of scale or value Shared Group Processes/ Services for Efficiency Savings:
chain integration?
§  Shared platforms
L&G Synergies §  Centralized operational processes (shared services)
How can we develop and share our LE §  Standardized processes among multiple business units
intangible assets?




Enterprise
Value
A B C D
Financial Synergies Cross SBU Collaborative Learning & Growth Synergies:
value of our SBU Portfolio Leadership and Organizational Development:
§  Share competency in development of human, information
Customer Synergies and or Leadership
How can we share the customer CE §  Human capital recruitment and development (incl. key
value?
executive rotation programs)
§  Information – Leverage common technology/ platforms
Process Synergies §  Organizational – Propagate/ reinforce strong cultures/
How can we mange SBU processes to PE mindsets (e.g. innovation, teamwork)
chain integration?

L&G Synergies
How can we develop and share our LE
intangible assets?



Main areas of Group/ Local or Cross-Unit value along Internal Process/
Value Chain in Insurance context ILLUSTRATIVE
Typical Links of Insurance Value Chain (bubble level)

Overall Product
Asset Risk inter- Admini- Distri-
Strategic design &
Management mediation stration bution
Levers of Cross-Unit planning packaging
Value Creation

Resource
allocation ●
◑
◕
￮
◕
◔

Expertise
sharing ◕
◕
◑
◔
◕
◑

Cost
efficiency ￮
◕
◔
●
◔
◔

§  Centralized group-wide Strategic Planning (with inputs from individual business/ country units)
§  Group-wide perspective on cross-business product profitability for targeted capital allocation/
portfolio management
§  Cross-business/ country unit expertise sharing and Group-wide standard setting (Underwriting.
Pricing, Asset management etc.)
§  Centralized Administration and Asset Management

1.  Cross-business/ country units sharing/ synergies and centralizations in insurance context. Source: The New Federalism: How insurance Groups are re-inventing the role
of the Group Corporate Centre; Mercer Oliver Wyman Perspectives (November 2005); GE Analysis


Agenda






Problems typically arise in first, Finding the Value; Secondly, having
desire to Act on what one finds…
Finding the Value…
§  Hard to spot opportunities between Group and local; and across country or
business units
Cognitive
§  Few people have knowledge or perspective needed to consider a truly cross-
Hurdle unit, cross-country, cross-functional approach
§  Nascent understanding of true nature of Corporate Strategy

§  It is not Business-As-Usual, and hence beyond the here-and-now, meet-the-
Resource numbers horizon of most managers
Hurdle §  No one in the business/ country units have responsibility for (and luxury of)
taking a group/ cross-country perspective

Having the desire to act on what one finds…
§  Opposition from local power bases fearful of losing autonomy and control
Loss of Current
§  Concerns of need to compromise in one s own unit to benefit other units
Benefit Hurdle
§  Potential conflict over priorities in shared activities

No perceived §  People unable/ unwilling to see value in greater organizational integration
Future Benefit §  Results/ payoff probably only visible in the medium to long term
hurdle: §  Difficulty of measuring performance – what is a good job is hard to determine


… And finally – and most importantly – having the Clarity and Maturity
to Make it Work!
Making it Work!
§  Competing or conflicting objectives between matrix dimensions
§  Inadequate process to align goals and detect possible misalignments
Misaligned
Goals
§  Lack of synchronization, coordination, and poor timing of work plans and
objectives
§  Insufficient communication and consultation between matrix dimensions

§  Unclear job descriptions and guidelines for roles and responsibilities
Unclear Roles & §  Confusion over who is the boss
Responsibilities
§  Not knowing whom to contact for information

§  Confusion over who has the final authority
Ambiguous §  Lack of clarity on areas of accountability
Authority §  Leaders unaccustomed to sharing decision rights
§  Delay in decision making process

§  Personal conflicts between leaders hinder collaboration between units
Silo-focused §  Withholding resources from others
Employees §  Lack of trust between employees in different units
§  Employees lack requisite skills to function in the matrix


Agenda






From experience, getting the Overall Design right, and working to
Reduce Ambiguity and Engender Collaboration during Operationalization
are both critical to success

Design right a Group-Local Reduce Ambiguity &
Matrix Organization & System Engender Collaboration

§  Find the value §  Define dominant axis of authority
§  Consider full range of organizing §  Clarify decision rights/ authorities,
options and linkage that support chosen Global/ Local

§  Clarify roles and responsibilities
for Group and Local Units + strategy by levels, then align fully

§  Consider Value Chain focus and
Sub-Owners to align and
§  Establish and resource Group engender collaboration
Corporate Centre, separate from
Local Units

§  Group Corporate Centre to
develop Group Systems
(Policies, Processes etc.)


Finding the Global/ Cross-Unit and Local Value involves analyzing each
function, or even each key Activity, guided by general design principles

§  Recognize and play to different strengths
§  Leverage economies of scale and skill

§  Accelerate setup and growth

§  Pool scare resources

§  Minimize duplication

§  Prioritize proximity to preferred customers and suppliers
§  Optimize supply chain configurations

§  Avoid undue complexity


Consider Range of Organizing Options/ Linkage, and Appropriate
Mechanisms1 to capture Cross-unit Value

Level of Cross-Unit Value Most appropriate type of Group Sample Collaborative
& Ease of Capture Cross-Unit Linkage Units Role Mechanisms1
§  High Group/ Cross-Unit Value Fully Centralized Structure Running/ §  Central Unit sets Policy, makes
§  Low Local Unit Value §  Centralized decision making Executing decisions and executes them
and execution §  Direct supervision by Central Unit

§  High Group/ Cross-Unit Value; Centralized Decision Making; Directing §  Central Unit sets Policy and
But challenging to capture Local Execution makes decisions
§  Low Local Unit Value §  Policies defined and §  Standardize processes and skills
decisions made centrally;
§  But executed locally
§  Moderate Group/ Cross-Unit Aligned Execution Guiding §  Standardize values, principles
Value; Fairly easy to capture §  Decision making primarily §  Best practice sharing
§  Moderate Local Unit Value locally; §  Rotating key people cross-unit
§  Some centrally driven §  Converge processes to facilitate
coordination to ensure consistency and alignment
alignment/ optimization §  Standardized reporting formats

§  Low Group/ Cross-Unit Value Fully Decentralized Structure Targeting §  Standardized financial measures
§  High Local Unit Value §  Decisions made and §  Strong local/ in-country Manager
Executed fully locally

1.  Mechanisms that promote information sharing, coordination, and collaboration across different organizational units


Appropriate Organizing Option would typically vary across all four
Models depending on combination of Hard and Soft considerations

Degree of centralization would vary between sub-function and activity
within each function – and may vary across time – before stabilizing

HARD FACTORS SOFT FACTORS

§  Newness and complexity of specific §  Trust
sub-function/ activity
§  Working relationship
§  Knowledge, expertise, familiarity
§  Confidence
§  Availability of right resource/ band-
width §  Maturity
§  Maturity of Group/ Local Market §  Perception
§  Culture and belief system


Clarify Roles and Responsibilities for Group and Local Units
ILLUSTRATIVE

Function/
Group/ Cross-Unit Local/ Country Unit
Key Activity
§  Define the vision and targets §  Identify local opportunities
§  Understand opportunities and decide on market §  Coordinate with Group for methods of entry
New Market
Development
entry priorities and strategy for entry §  Manage local negotiations with local
§  Coordinate across local units to respond to multi- government regulators, potential target
point competition companies, and partners
§  Set allocation group-wide and drive group process §  Coordinate investment
Manufacturing
§  Decide on optimal locations

§  Secure long-term access to supply §  Support negotiations with key suppliers
§  Identify sourcing needs and coordinate resources §  Manage relationships with local suppliers
Sourcing
across the group
§  Optimize group supply chain strategy with suppliers
§  Search for global opportunities and innovations §  Build tailored local applications
R&D
§  Execute/ leverage Central R&D Unit/ Infrastructure §  Manage local innovations

§  Set targets §  Coordinate customer strategies
Sales §  Coordinates cross-selling between Local Units
(Business Lines/ Country)
§  Determine group shared services strategy and §  Provide and optimize shared service
Shared
organizing model, and oversee group platforms platforms
Services
§  Coordinate Shared Services with local units


Translate Roles and Responsibilities for Group/ Corporate Centre to
established how Involved it will be, and how it will Add Value
Nature of CC Involvement/ Intervention

Operational Involvement & Scale Active Centre Staff Involvement
Running/ Executing Directing
Direct

(Little separation between Group/ Centre and (Group adds value through Hands-on
Units; High degree of Supervision and Control; development of Strategic Plans with and/ or for
Group adds value by Performing some Functions Business/ Functional Units; And providing
and Activities centrally for Economies of Scale) Directional Initiatives)

Target Setting & Controls Vision, Principles & Oversight
Targeting Guiding
Indirect

(Group influences performance of Business/ (Group adds value by Visioning, Creating new
Functional Units by setting Targets and controls. Group know-how, and providing Guiding
Group adds value through Scale economies in Principles; with some coordination of Business/
Financial Governance – Budgeting, Control) Functional Units)

Economies of Scale/ Cost Reduction Increased Value/ Knowledge

Source of Competitive Advantage

This in turn will determine the Skills, Expertise, Talent Type, Planning
Process and Focus of the Group/ Corporate Centre and Business Unit

Operational Involvement & Scale Active Centre Staff Involvement
Nature of CC Involvement/ Intervention

Running/ Executing Directing
§  Centralized value chain management skills §  Process/ system management skills
Direct

§  Technical expertise §  Process expertise
§  Technical managers/ value chain experts §  Process experts
§  Top down process, but shared responsibilities §  Discussion between Centre and BU in process
§  BU focus: Cost reductions/ competitiveness §  BU focus: Utilizing group process advantages

Vision, Strategy & Oversight
Target Setting & Controls
Guiding
Targeting
§  Vision, value and principles management skills
§ 
Indirect

Financial management skills
§  Governance expertise
§  Vision and Values

§  Financial experts
§  Visionary Leaders

§  Tight formal process, with targets from Centre
§  Process tailored to vision/ values/ principles

§  BU focus: Financial Performance
§  BU focus: Fit to group vision/ values/
principles

Economies of Scale/ Cost Reduction Increased Value/ Knowledge

Source of Competitive Advantage

Successful Birth, Growth and Operationalization of the Group/
Corporate Centre – Some key points

§  FULLY extract Corporate Centre from Flagship (Strong/ Founding) Unit.

§  Executives in Business Units – no matter how strong, doubling up – will
NOT work!

§  Corporate Centre Executives must learn to appreciate it s a full-time job
with, even if its not traditional Business-As-Usual. They must feel
comfortable/ confident with transition to more strategic role. Doing is now
more Planning, Coordinating, Facilitating and Aligning.

§  Select top talent for Corporate Centre; Continuously skill them up with
planning, technical, relational and project management/ coordination skills
– able to add real value and continuously earn respect of local units.

§  Executives in Corporate Centre must have medium to long term
perspective, and be able to step away. The big picture must be their
picture; And they must help Business Units keep big picture in view.


Group/ Corporate Centre to develop Group Policies/ Systems for
Activities where it plays a Directing or Guiding Role ; And decide on
appropriate configuration of Standardization/ Customization Pyramid
Group s (or
Flagship Unit s)
existing Policies
& Processes
Local Unit to leverage
Group policies/ practices;
No customizations allowed
Inputs from Inputs from
Inputs from
Industry Best Internal &
Local
Practice
Operations
External Local Unit
Research Consultants leverage
Group policies/
practices;
Changes subject
to Group approval
Pilot in Local
Unit Operations
Local Unit leverage
Group policies/ practices;
Free to execute/
customize at will, within
boundaries
Group s ENHANCED Policies &
Processes for Group-wide application


From experience, getting the Overall Design right, and working to
Reduce Ambiguity and Engender Collaboration during Operationalization
are both critical to success

Design right a Group-Local Reduce Ambiguity &
Matrix Organization & System Engender Collaboration

§  Find the value §  Define dominant axis of authority
§  Consider full range of organizing §  Clarify decision rights/ authorities,
options and linkage that support chosen Global/ Local

§  Clarify roles and responsibilities
for Group and Local Units + strategy by levels, then align fully

§  Consider Value Chain focus and
Sub-Owners to align and
§  Establish and resource Group engender collaboration
Corporate Centre, separate from
Local Units

§  Group Corporate Centre to
develop Group Systems
(Policies, Processes etc.)


Define a Dominant Axis of Authority within the Matrix dimensions1…

40

primary responsibility to each dimension/ functions
Percentage of survey respondents assigning 35
35
32
30

25

20

15
15
12
10

5 4
3

0
Business Country Both Regional Functional Others
a b c d e f
Unit/ Mgmt. Country Mgmt. Mgmt.
Product Mgmt. &
Division Business Units

1.  Source: Organizing for Global Advantage in China, India, and Other Rapidly Developing Economies Survey; Boston Consulting Group


… And follow through to give primacy to chosen Axis/ Dimension at the
overall Group level1…

If Business Unit/ Country is Dominant Axis (over Functional), then…
Group Business Unit Head will… Group Functional Unit Head will….
§  Have full end-to-end accountability of P&L and §  Have accountability for respective area of functional
Capability building at Group and Local Units level responsibility at Group and Local Unit level
§  Coordinate and exercise Business and Functional §  Coordinate and exercise functional responsibilities/
Units responsibilities/ authorities in BU to ensure authorities in BU – through Group BU Head.
coordinated/ aligned instructions and efforts
§  Approve local business and functional strategies/ §  Concur with local functional strategies/ policies,
policies, ensuring alignment with Group s strategies/ consistent with Group s strategies/ policies.
policies.
§  Have authority to draw on functional units to support §  Have responsibility to provide quality and timely support
its goals, and coordinate support programs based on to BU at reasonable costs, as coordinated by Group BU
assessment of local needs Head
§  Exercise directly – or delegate functional §  Delegate functional responsibilities/ authorities –
responsibilities and authorities to Local BU Head/ through Group BU Head – and not directly to Local
CEO or Local Functional Heads Functional Heads.
§  Exercise governance to ensure compliance §  Work through Group BU Head to ensure compliance with
governance

§  Directly supervise and review performance of Local §  Provide inputs to Group BU Head on performance of
Head/ CEO Local Head/ CEO
1.  Illustrative for Business Unit/ Country by Functional Unit Matrix


Clarify Decision-making Authorities, that support chosen Global/ Local
Strategy, for different levels; Then align respective Sub-systems

1 Group Board/ Board Committees with CEO

2 Group CEO with Direct Reports; and Between Direct Reports

Group Heads with Local Country CEO/ Unit Heads (Business &
3 Support Functions)

4 Local CEO with Local Unit Heads (Business & Support Functions)

Parties involved in Cross-functional Value Chain Processes (Group
5 and Local level)


Standardize Decision Rights/ Authorities – their Definitions, Powers and
Responsibilities and even Sequence of Execution – Group-wide

§  Authorizes a proposal for execution, and holds responsibility/ accountability of approving.
§  Responsible to seek concurrence from concurring authority (e.g. peers/ higher authority) where
APPROVE
necessary, before approval/ execution of proposal.
§  Approving authority can initiate a matter for consideration without a recommendation.

§  Holder of joint decision marking authority and responsibility
CONCUR §  When an approval requires a concurrence, the proposal cannot be executed until concurrence
has been given by the concurring authority.

§  Supports a proposal for approval by a higher authority.
§  The higher authority obtains assurance that another person/ body, with required experience/
ENDORSE
knowledge, has reviewed the proposal before it considers the proposal.
§  Proposal cannot be executed after it is endorsed, it still requires concurrence/ approval.

§  Verifies structure/ format of proposal and approval process adopted is in compliance with
REVIEW policies/ frameworks. Can ask for structure/ format of proposal/ process to be amended.
§  Proposal cannot be executed after it is reviewed, it still requires approval.

§  Initiates proposal for discussion and approval.
OWN §  Following approval, responsible/ accountable for execution on proposal according to agreed
policies and objectives.


Adopt 80-20 rule, to develop a Roles, Responsibility and Authority
(RRA) Grid for each level, considering Local Regulators Requirements
ILLUSTRATIVE

Level #3B Grid - Group BU Head with Local Review Freq. / Group BU Local Local
Country CEO/ BU Head Reviewer Head #2 Board CEO
STRATEGY & OWNERSHIP (GELINDO)
1 Overall Direction & Risk Annual/ XXX Own - -
2 Market Positioning/ Business Strategy As Req./ YYY Approve - Own
3 Mergers & Acquisitions As Req./ YYY Own Approve (Reg) -
… … … … … …
PEOPLE
1 Key Appointments/ Promotions/ Terminations As Req./ YYY Concur Approve (Reg) Own
2 Human Capital Policies – Compensation… Annual/ XXX Approve - Own
.. … … … … …
BUSINESS & OPERATIONS MANAGEMENT
1 Financial Management Policies, Structure, KPIs Annual/ XXX Approve Endorse Own
2 Distribution Management Policies, Structure, KPIs Annual/ XXX Approve - Own
.. … … … … …
FINANCIAL & OPERATING LIMITS
1 Capital/ Management Expenditure Quarterly/ XXX Approve - Own
… … … … … …


Cascade RRA Grid across all levels; Then align respective Sub-systems
Group Board/ Board Group Board Audit Nom Rem. Group Group Board/ Board
Committees with Group CEO Board EXCO Comm. Comm. Comm. CEO 1 Committees with CEO
1 XXX §  XXX 1
§  XXX 2
… YYY §  YYY 1
§  YYY 2
Group CEO with Direct
Group CEO with Direct Reports; Group Group Group Group Group Group Group
and Between Direct Reports CEO BU Hd 1 BU Hd 2 Ops Hd. IT Hd. Fin Hd. IM Hd. 2 Reports; & Between Direct
Reports
§  XXX 2
§  YYY 2

Group Heads with Local Country CEO Group Heads with Local CEO/ Group Local Local
3 or Unit Heads Unit Heads (Biz & Support) BU Hd 2 Board CEO

§  XXX 2
§  YYY 2

Local CEO with Local Unit Business Local CEO with Local Business
4 & Support Functional Heads) & Support Unit Heads
Local
CEO
Local
Ops Hd
Group
IT Hd.
Group
Fin Hd.
Group
IM Hd.

§  XXX 2
§  YYY 2


Consider Value Chain focus to align and engender Cross-functional
Collaboration, and Group-wide Process Standardization, and Capability
building ILLUSTRATIVE
Typical Links of Insurance Value Chain (bubble level)

Product
Asset Risk inter- Admini- Distri-
design &
Management mediation stration bution
Typical Vertical Group/ packaging
Local Functional Units

Marketing
ü ü

Distribution ü ü ü ü
Operations/
IT ü ü ü

Finance/
Actuary ü ü ü

Investment
Management ü ü


Key Takeaways…


Matrix Structure Navigating & Making It Work

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