Consider if you will the following quotations, each from executives at Philips, the global technology company—one in the late 1970s and one quite recently:
“We typically lose out when a market commoditizes and we no longer differentiate, further aggravated by us being too slow or expensive.”1
“The matrix is too slow—we are in a very turbulent market with great potential, and we have far too many low-cost competitors. We need very short communication lines, quick decisions, alertness—we’ve got to be able to adapt fast.”2
The first statement, from current chairman and CEO Frans van Houten, is the new one; it appeared in a 2013 working paper from the MIT Center for Information Systems Research. The second, older statement, from a Philips product manager, initially appeared in a 1978 Management Today article and was quoted by Tom Peters in his first McKinsey Quarterly piece, “Beyond the matrix organization.”
The similarity of these statements, from thoughtful leaders at a well-run company, speaks to the difficulty of the global corporation’s perennial challenge: how to capture scale across borders while differentiating products and services to suit the needs of local customers—all without letting complexity get in the way of speed and agility.