Matrix Structure Navigating & Making It Work

1

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

Ng Aung San

Head, Strategy and Corporate Management Information

Strategic Corporate Planning Conference

Friday, 11th July 2008

Marina Mandarin Hotel, Singapore

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

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


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

Key Defining Characteristics: §  Single dimension – Vertically

segmented by functions §  One common set of functions serving

different customer groups in the market

§  Focus is more on internal process standardization/ centralization

Advantages: §  Intuitive, and easy to understand –

clearly defined single reporting line §  Expertise, knowledge and processes

optimized functionally §  Low duplication of resource/ work §  High standardization/ centralization

Disadvantages: §  Internally focused - Lack of in-depth

understanding of, and tailoring to differences markets

§  Vertical silos – One Firm? §  Problems with hand-offs/ interface

between functions §  Problems with coordination and

communication across functions §  Slow response to market conditions

CEO

Head, Product Mgmt.

Head, Operations

& IT

Head, Finance

Head, HR, etc.

Head, Marketing

Customer/ Group

1

Customer Group

2

Customer Groups 3, 4 …

Customer Groups: §  Country – e.g. Singapore; Malaysia, China, Indonesia etc. §  Market Maturity – e.g. Established and Emerging Markets §  Product Lines – e.g. Life and General Insurance and Investments §  Customer Groups – e.g. Retail and Institutional

Product Mgmt.

Function

Operations & IT

Function

Finance Function

HR Function

etc.

Marketing Function

Market


Classical Multi-Divisional Business Lines Organization

Key Defining Characteristics: §  Single dimension – Horizontally

segmented by business lines/ customer group

§  Different/ dedicated set of functions serving each business line

§  Focus is more on external market orientation/ customization

Advantages: §  Intuitive, and easy to understand -

clearly defined single reporting line §  Expertise, knowledge and processes

optimized by customer group/ business line

§  Nimble/ responsive to market changes

Disadvantages: §  Horizontal silos – One Firm? §  Differing Customer Experiences §  High duplication of resource/ work

across business lines §  Problems with coordination and

communication across Business Lines §  Slow development, group-wide

sharing and adoption of best practices §  Low standardization/ centralization

Head, Business Line/ Customer Group 1 (e.g. Singapore)

Product Mgmt.

Operations & IT

Finance HR Marketing

CEO

Head, Business Line/ Customer Group 2 (e.g. Malaysia)

Product Mgmt.

Operations & IT


Head, Business Line/ Customer/ Group 3,4 … (e.g. China, Indonesia)

Product Mgmt.

Operations & IT


Customer Groups: §  Country – e.g. Singapore; Malaysia, China, Indonesia etc. §  Market Maturity – e.g. Established and Emerging Markets §  Product Lines – e.g. Life and General Insurance and Investments §  Customer Groups – e.g. Retail and Institutional

Customer Groups

1

Customer Groups

2


Market


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

CEO

Head, Pdt. Mgmt.

Head, Ops & IT

Head, Finance

Head, HR etc.

Head, Marketing

Marketing Business

Line 1

Pdt. Mgmt. Business

Line 1

Ops/ IT Business

Line 1

Finance/ Business

Line 1

HR etc. Business

Line 1

Marketing Business

Line 2

Pdt. Mgmt. Business

Line 2

Ops/ IT Business

Line 2

Finance/ Business

Line 2

HR etc. Business

Line 2

Marketing Business

Line 3, 4 …

Pdt. Mgmt. Business

Line 3, 4 …

Ops/ IT Business

Line 3, 4 …

Finance/ Business

Line 3.4 …

HR etc. Business

Line 3, 4 …

Head, Business

Line 1

Head, Business

Line 2

Head, Business

Line 3, 4…

Customer/ Groups

1

Customer/ Groups

2


Market

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

Lines of Business

SBU A

SBU B

SBU C

SBU D

Enterprise Value

Proposition

FA FA FA FA

Financial What are our shareholder expectation

for financial performance?

Customer To reach our financial objectives, how

do we create value for customers? CA CB Cc CD

PA PB PC PD

LA LB LC LD

Internal Process What are critical processes to deliver

value to customers and shareholders?

Learning & Growth (L&G) How do we align our intangible assets

to improve critical processes?

Single Stand-alone/ Vertical SBU Strategy

(Creating Customer Value)

Financial Synergies How can we increase the shareholder

value of our SBU Portfolio

Customer Synergies How can we share the customer

interface to increase total customer value?

Process Synergies How can we mange SBU processes to achieve economies of scale or value

chain integration?

L&G Synergies How can we develop and share our

intangible assets?

FE

CE

PE

LE

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

Cross-SBU Collaborative Strategy, Linkage & Alignment (Creating Enterprise Value)

Vertical Strategy, Linkage &A

lignment

Multiple & Cross-SBU/ Collaborative Strategy

(Creating Enterprise Value)


Cross SBU/ Country Collaborative Financial Synergies:

Capital Management capabilities: §  Internal Capital Management §  Asset/ Investment Management §  Corporate Portfolio Management expertise §  Investor relations

Effective Governance: §  Legal and Regulatory Governance and Compliance §  Management Governance and Compliance §  Governance and Performance Monitoring §  Financial Reporting and Control §  Risk Management

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



Lines of Business

SBU A

SBU B

SBU C

SBU D

Enterprise Value

Proposition






chain integration?


intangible assets?

FE

CE

PE

LE




Cross SBU/ Country Collaborative Customer Synergies:

Shared Customers: §  Shared brand name; shared advertising and promotion §  Cross-selling of products/ services §  Interrelated pricing of complementary products §  Bundling/ packaged selling or Solutions-selling.

Common Value Proposition: §  Consistent buying experience across geography, business

lines etc., aligned with brand/ corporate standards

Shared Channels: §  Shared distribution channels/ sales force §  Shared service network




Lines of Business

SBU A

SBU B

SBU C

SBU D

Enterprise Value

Proposition






chain integration?


intangible assets?

FE

CE

PE

LE




Cross SBU/ Country Collaborative Process Synergies:

Centralized development and Enterprise-wide sharing of: §  Corporate business operating principles §  Business setup and management systems (knowledge,

expertise, policies, standards, best practices, “success formulas”, frameworks, procedures, templates etc.)

§  Specialized Build-Operate-Transfer (BOT) Teams for rapid/ robust market/ country entry and expansion

Shared Group Processes/ Services for Efficiency Savings: §  Shared platforms §  Centralized operational processes (shared services) §  Standardized processes among multiple business units




Lines of Business

SBU A

SBU B

SBU C

SBU D

Enterprise Value

Proposition






chain integration?


intangible assets?

FE

CE

PE

LE




Cross SBU Collaborative Learning & Growth Synergies:

Leadership and Organizational Development: §  Share competency in development of human, information

and or Leadership §  Human capital recruitment and development (incl. key

executive rotation programs) §  Information – Leverage common technology/ platforms §  Organizational – Propagate/ reinforce strong cultures/

mindsets (e.g. innovation, teamwork)




Lines of Business

SBU A

SBU B

SBU C

SBU D

Enterprise Value

Proposition






chain integration?


intangible assets?

FE

CE

PE

LE




Distri- bution

Product design &

packaging Admini- stration

Risk inter- mediation

Main areas of Group/ Local or Cross-Unit value along Internal Process/ Value Chain in Insurance context

Asset Management

Resource allocation

Expertise sharing

Cost efficiency

Overall Strategic planning

◕ ◕

◑

§  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

Levers of Cross-Unit Value Creation

◕ ◑ ◔

￮ ◔ ●

◕ ◕ ◔

●

◕ ￮

◔ ◑ ◔

Typical Links of Insurance Value Chain (bubble level) ILLUSTRATIVE


Agenda






Problems typically arise in first, Finding the Value; Secondly, having desire to Act on what one finds…

Finding the Value…

Cognitive Hurdle

§  Hard to spot opportunities between Group and local; and across country or business units

§  Few people have knowledge or perspective needed to consider a truly cross-unit, cross-country, cross-functional approach

§  Nascent understanding of “true nature” of Corporate Strategy

Resource Hurdle

§  It is not Business-As-Usual, and hence beyond the “here-and-now, meet-the-numbers” horizon of most managers

§  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…

Loss of “Current Benefit” Hurdle

§  Opposition from local power bases fearful of losing autonomy and control §  Concerns of need to compromise in one’s own unit to benefit other units §  Potential conflict over priorities in shared activities

No perceived “Future Benefit”

hurdle:

§  People unable/ unwilling to see value in greater organizational integration §  Results/ payoff probably only visible in the medium to long term §  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!

Misaligned Goals

§  Competing or conflicting objectives between matrix dimensions §  Inadequate process to align goals and detect possible misalignments §  Lack of synchronization, coordination, and poor timing of work plans and

objectives §  Insufficient communication and consultation between matrix dimensions

Unclear Roles & Responsibilities

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

Ambiguous Authority

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

Silo-focused Employees

§  Personal conflicts between leaders hinder collaboration between units §  Withholding resources from others §  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 Matrix Organization & System

+

Reduce Ambiguity & Engender Collaboration

§  Find the value

§  Consider full range of organizing options and linkage

§  Clarify roles and responsibilities for Group and Local Units

§  Establish and resource Group Corporate Centre, separate from Local Units

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

§  Define dominant axis of authority

§  Clarify decision rights/ authorities, that support chosen Global/ Local strategy by levels, then align fully

§  Consider Value Chain focus and Sub-Owners to align and engender collaboration


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 & Ease of Capture

Most appropriate type of Cross-Unit Linkage

Group Units’ Role

Sample Collaborative Mechanisms1

§  High Group/ Cross-Unit Value §  Low Local Unit Value

Fully Centralized Structure §  Centralized decision making

and execution

Running/ Executing

§  Central Unit sets Policy, makes decisions and executes them

§  Direct supervision by Central Unit

§  High Group/ Cross-Unit Value; But challenging to capture

§  Low Local Unit Value

Centralized Decision Making; Local Execution §  Policies defined and

decisions made centrally; §  But executed locally

Directing §  Central Unit sets Policy and makes decisions

§  Standardize processes and skills

§  Moderate Group/ Cross-Unit Value; Fairly easy to capture

§  Moderate Local Unit Value

Aligned Execution §  Decision making primarily

locally; §  Some centrally driven

coordination to ensure alignment/ optimization

Guiding §  Standardize values, principles §  Best practice sharing §  Rotating key people cross-unit §  Converge processes to facilitate

consistency and alignment §  Standardized reporting formats

§  Low Group/ Cross-Unit Value §  High Local Unit Value

Fully Decentralized Structure §  Decisions made and

Executed fully locally

Targeting §  Standardized financial measures §  Strong local/ in-country Manager

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

HARD FACTORS

§  Newness and complexity of specific sub-function/ activity

§  Knowledge, expertise, familiarity

§  Availability of right resource/ band-width

§  Maturity of Group/ Local Market

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

SOFT FACTORS §  Trust

§  Working relationship

§  Confidence

§  Maturity

§  Perception

§  Culture and belief system


Clarify Roles and Responsibilities for Group and Local Units ILLUSTRATIVE

Function/ Key Activity Group/ Cross-Unit Local/ Country Unit

New Market Development

§  Define the vision and targets §  Understand opportunities and decide on market

entry priorities and strategy for entry §  Coordinate across local units to respond to multi-

point competition

§  Identify local opportunities §  Coordinate with Group for methods of entry §  Manage local negotiations with local

government regulators, potential target companies, and partners

Manufacturing §  Set allocation group-wide and drive group process §  Decide on optimal locations

§  Coordinate investment

Sourcing

§  Secure long-term access to supply §  Identify sourcing needs and coordinate resources

across the group §  Optimize group supply chain strategy with suppliers

§  Support negotiations with key suppliers §  Manage relationships with local suppliers

R&D §  Search for global opportunities and innovations §  Execute/ leverage Central R&D Unit/ Infrastructure

§  Build tailored local applications §  Manage local innovations

Sales §  Set targets §  Coordinates cross-selling between Local Units

(Business Lines/ Country)

§  Coordinate customer strategies

Shared Services

§  Determine group shared services strategy and organizing model, and oversee group platforms

§  Coordinate Shared Services with local units

§  Provide and optimize shared service platforms


Translate Roles and Responsibilities for Group/ Corporate Centre to established how Involved it will be, and how it will Add Value

Nature of C

C Involvem

ent/ Intervention

Direct

Operational Involvement & Scale “Running/ Executing”

(Little separation between Group/ Centre and Units; High degree of Supervision and Control;

Group adds value by Performing some Functions and Activities centrally for Economies of Scale)

Active Centre Staff Involvement “Directing”

(Group adds value through Hands-on development of Strategic Plans with and/ or for

Business/ Functional Units; And providing Directional Initiatives)

Indirect

Target Setting & Controls “Targeting”

(Group influences performance of Business/ Functional Units by setting Targets and controls. Group adds value through Scale economies in Financial Governance – Budgeting, Control)

Vision, Principles & Oversight “Guiding”

(Group adds value by Visioning, Creating new Group know-how, and providing Guiding

Principles; with some coordination of Business/ 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

Nature of C

C Involvem

ent/ Intervention

Direct

Operational Involvement & Scale “Running/ Executing”

§  Centralized value chain management skills §  Technical expertise §  Technical managers/ value chain experts §  Top down process, but shared responsibilities §  BU focus: Cost reductions/ competitiveness

Active Centre Staff Involvement “Directing”

§  Process/ system management skills §  Process expertise §  Process experts §  Discussion between Centre and BU in process §  BU focus: Utilizing group process advantages

Indirect

Target Setting & Controls “Targeting”

§  Financial management skills §  Governance expertise §  Financial experts §  Tight formal process, with targets from Centre §  BU focus: Financial Performance

Vision, Strategy & Oversight “Guiding”

§  Vision, value and principles management skills §  Vision and Values §  Visionary Leaders §  Process tailored to vision/ values/ principles §  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

Inputs from Industry Best

Practice Research

Inputs from Internal & External

Consultants

Inputs from Local

Operations

Group’s (or Flagship Unit’s) existing Policies

& Processes

Pilot in Local Unit Operations

Group’s ENHANCED Policies & Processes for Group-wide application

Local Unit leverage Group policies/ practices;

Free to execute/ customize at will, within

“boundaries”

Local Unit leverage

Group policies/ practices;

Changes subject to Group approval

Local Unit to leverage Group policies/ practices;

No customizations allowed


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 Matrix Organization & System

+

Reduce Ambiguity & Engender Collaboration

§  Find the value

§  Consider full range of organizing options and linkage

§  Clarify roles and responsibilities for Group and Local Units

§  Establish and resource Group Corporate Centre, separate from Local Units

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

§  Define dominant axis of authority

§  Clarify decision rights/ authorities, that support chosen Global/ Local strategy by levels, then align fully

§  Consider Value Chain focus and Sub-Owners to align and engender collaboration


Define a Dominant Axis of Authority within the Matrix dimensions1…

0

5

10

15

20

25

30

35

40

a b c d e f

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

Business Unit/

Product Division

Others Functional Mgmt.

Both Country Mgmt. &

Business Units

Country Mgmt.

Regional Mgmt.

35

3 4

15

32

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… 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 Capability building at Group and Local Units level

§  Have accountability for respective area of functional responsibility at Group and Local Unit level

§  Coordinate and exercise Business and Functional Units’ responsibilities/ authorities in BU to ensure coordinated/ aligned instructions and efforts

§  Coordinate and exercise functional responsibilities/ authorities in BU – through Group BU Head.

§  Approve local business and functional strategies/ policies, ensuring alignment with Group’s strategies/ policies.

§  Concur with local functional strategies/ policies, consistent with Group’s strategies/ policies.

§  Have authority to draw on functional units to support its goals, and coordinate support programs based on assessment of local needs

§  Have responsibility to provide quality and timely support to BU at reasonable costs, as coordinated by Group BU Head

§  Exercise directly – or delegate functional responsibilities and authorities to Local BU Head/ CEO or Local Functional Heads

§  Delegate functional responsibilities/ authorities – through Group BU Head – and not directly to Local Functional Heads.

§  Exercise governance to ensure compliance §  Work through Group BU Head to ensure compliance with governance

§  Directly supervise and review performance of Local Head/ CEO

§  Provide inputs to Group BU Head on performance of 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

2

3

4

5

Group Board/ Board Committees with CEO

Group CEO with Direct Reports; and Between Direct Reports

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

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

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


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

APPROVE

§  Authorizes a proposal for execution, and holds responsibility/ accountability of approving. §  Responsible to seek concurrence from concurring authority (e.g. peers/ higher authority) where

necessary, before approval/ execution of proposal. §  Approving authority can initiate a matter for consideration without a recommendation.

CONCUR §  Holder of joint decision marking authority and responsibility §  When an approval requires a concurrence, the proposal cannot be executed until concurrence

has been given by the concurring authority.

ENDORSE

§  Supports a proposal for approval by a higher authority. §  The higher authority obtains assurance that another person/ body, with required experience/

knowledge, has reviewed the proposal before it considers the proposal. §  Proposal cannot be executed after it is endorsed, it still requires concurrence/ approval.

REVIEW §  Verifies structure/ format of proposal and approval process adopted is in compliance with

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.

OWN §  Initiates proposal for discussion and approval. §  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

Level #3B Grid - Group BU Head with Local Country CEO/ BU Head

Review Freq. / Reviewer

Group BU Head #2

Local Board

Local 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

… … … … … …

ILLUSTRATIVE


Cascade RRA Grid across all levels; Then align respective Sub-systems Group Board/ Board Committees with Group CEO

Group Board

Board EXCO

Audit Comm.

Nom Comm.

Rem. Comm.

Group CEO

1 XXX §  XXX 1

§  XXX 2

… YYY §  YYY 1

§  YYY 2

Group CEO with Direct Reports; and Between Direct Reports

Group CEO

Group BU Hd 1

Group BU Hd 2

Group Ops Hd.

Group IT Hd.

Group Fin Hd.

Group IM Hd.

1 XXX §  XXX 1

§  XXX 2

… YYY §  YYY 1

§  YYY 2

Group Heads with Local CEO/ Unit Heads (Biz & Support)

Group BU Hd 2

Local Board

Local CEO

1 XXX §  XXX 1

§  XXX 2

… YYY §  YYY 1

§  YYY 2

Local CEO with Local Business & Support Unit Heads

Local CEO

Local Ops Hd

Group IT Hd.

Group Fin Hd.

Group IM Hd.

1 XXX §  XXX 1

§  XXX 2

… YYY §  YYY 1

§  YYY 2

Group Board/ Board Committees with CEO

Group CEO with Direct Reports; & Between Direct Reports

Group Heads with Local Country CEO or Unit Heads

Local CEO with Local Unit Business & Support Functional Heads)

1

2

3

4


Distri- bution

Product design &

packaging Admini- stration

Risk inter- mediation

Consider Value Chain focus to align and engender Cross-functional Collaboration, and Group-wide Process Standardization, and Capability building

Marketing

Distribution

Operations/ IT

Asset Management Typical Vertical Group/

Local Functional Units

Typical Links of Insurance Value Chain (bubble level)

ILLUSTRATIVE

Finance/ Actuary

Investment Management

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ü ü ü

ü ü

ü ü ü ü

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ü

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Key Takeaways…

37

End of Pack

Matrix Structure Navigating & Making It Work

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