The product hasn't launched yet, and the market opportunity has already slipped away. What are the issues with traditional organizations?

Approval takes 11 days, while the lifecycle of a popular product is only 7 days. Consumer goods companies cannot cope with the speed of the digital age using industrial-era processes. Member of the HBRC expert writing group, COO of ANTA Group Chen Ke | Written The air in the conference room is tense; the quarterly business meeting of Yueshang Food Group (pseudonym) has been stuck in a deadlock for the fifth hour. The three curves on the projection screen are suffocating: revenue growth continues to decline, market share is being eroded by emerging brands, and the average cycle from concept to market for new products is as long as 14 months—several times that of market newcomers. "We lost the national annual procurement order from Huimin Supermarket last week," said the sales vice president, his voice heavy with fatigue. "They require at least two regionally customized flavors each month and the ability to adjust production plans within two weeks based on sales data. Our standard process takes at least three months." The head of R&D immediately retorted: "The demand for Gen Z healthy snacks submitted by the marketing department only has five keywords and three competitor links. By the time we develop a sample, the market heat will have long passed." The supply chain director joined the fray: "Every production line switch requires time and huge costs. Last year, we suffered significant losses due to multiple switches for seasonal limited projects, not to mention the delayed regular orders." Everyone knows the problem, yet everyone feels powerless. This industry giant with a 35-year history is being constrained by the system it has spent decades building. Data shows that a modification of packaging design requires navigating a maze of approvals across multiple departments, taking a long time—even exceeding the entire lifecycle of a popular product on social media. The chairman spoke last: "I studied matrix management. Tear down departmental walls and form agile teams based on scenarios." "But our budget, assessment, and promotions are all based on departmental structures," the CFO pointed out the cold reality. "If a senior R&D person spends most of their time serving cross-departmental projects, how do we account for their costs? Who decides on promotions?" "This is exactly what we must change," the chairman surveyed the room. "If we don't tear down these walls, the market will tear down our company." Eight months later, the reform was declared a failure. Product managers fell into a tug-of-war of dual leadership, core talent loss intensified, and meetings turned from problem-solving into a battlefield of mutual blame. The company ultimately withdrew the reform and retreated back into familiar departmental barriers. This is not an isolated case. Many traditional companies attempt similar agile transformations but often revert to their original state amid growing pains. The root of failure is surprisingly similar: it is not the new model itself that is wrong, but the deep-seated genes of the old organization resisting new ways of survival. When division becomes fragmentation, efficiency becomes self-destruction. Yueshang's predicament reveals a harsh reality: When the local KPI of a department conflicts with the overall goals of the company, rational individuals typically prioritize optimizing the former. The marketing department pursues maximum visibility, thus resources are tilted towards short-term marketing activities, potentially neglecting the long-term development of product strength. The R&D department pursues technological innovation, which may lead to the allocation of resources to develop "black technology" that consumers do not need. The supply chain department pursues cost and stability, which may resist any flexible demands for small batches and multiple batches. Even more frightening are the hidden management costs. A former senior product manager once admitted that most of his time was not spent researching consumers, but rather verifying data and competing for resources among different departments' forms and processes. "The 'youthfulness' defined by the marketing department is social media popularity, the R&D department's is functional ingredients, and the supply chain's is packaging costs—these often contradict each other." The essence of departmental walls is the collective absence of a user perspective. Each department has developed its own set of "KPI language": • The success criteria for the marketing department are exposure and interaction rates, with decision logic based on what content can generate the most traffic. • The success criteria for the R&D department are the number of patents and technological breakthroughs, with decision logic based on which technology is the most advanced. • The success criteria for the supply chain are capacity utilization and unit costs, with decision logic based on which plan is the most stable and efficient. • The success criteria for the sales department are sales volume and collection rates, with decision logic based on which products are easiest to sell. Everyone is responsible for their own KPIs, but no one may be responsible for the complete user value. When a potentially successful new product idea is shelved due to budget or resource disputes between departments and ultimately becomes a hit for competitors, each department can still present a beautiful KPI report to prove "I was not wrong." An agile organization should function like a symphony orchestra. Traditional organizations resemble a precise industrial assembly line: the marketing department provides raw materials (consumer insights), the R&D department processes them (product development), the production department packages them (mass production), and the sales department pushes them to the shelves (channel distribution). Each link is interconnected, yet also tightly constrained. In contrast, the ideal matrix or agile organization attempts to transform into a symphony orchestra: cross-functional teams play around the same score (user scenarios), with the product manager as the conductor, and R&D, design, supply chain, marketing, and other sections coordinating in real-time, adjusting based on live feedback (market data and word-of-mouth). Its core value lies in pursuing speed, innovation, and talent activation. The value of speed lies in rapid response. Some companies have formed cross-functional agile teams that have significantly compressed the product launch cycle for customized products in specific regions from months to weeks, thus capturing fleeting market opportunities. The multiplication of innovation relies on deep collaboration. The success of some emerging brands is partly attributed to their "product + content + data" iron triangle project system. New product directions may undergo dozens of adjustments based on real-time feedback from social media before launch, allowing user data to truly integrate into the creation process. The activation of talent is reflected in boundary expansion. In a matrix structure, a product manager may shift from being responsible only for traditional channels to simultaneously managing e-commerce exclusives, social content products, and other multi-line tasks. "In the past, I only understood what one type of customer wanted; now I must understand different needs in different scenarios. Although it is painful, growth is accelerated." Three Obstacles: Why Are Reforms Often Foiled? However, ideals are beautiful, and the road is rugged. Matrix management often encounters three insurmountable "obstacles" in practice. The First Obstacle: Power Anxiety Among Middle Management. "If my team members serve multiple projects simultaneously, am I still their leader?" This question reveals the essence. In a hierarchical system, part of a manager's power comes from controlling subordinates' time, tasks, and information. Matrix management dilutes this control, inevitably triggering implicit resistance: prioritizing headquarters projects in resource allocation, selectively sharing information, and downplaying employees' cross-department contributions in performance evaluations. The Second Obstacle: Human Opportunism. Even when responsibilities are clearly defined, human nature will seek gaps. When employees face demands from multiple projects, they instinctively judge "who to listen to based on urgency," or more realistically, "who is more important for my career development, I will listen more to them." This may lead to resources being tilted towards projects with a "louder voice" or "greater power," rather than towards those with "higher value." The Third Obstacle, and the Most Solid: Path Dependence of the System. The management "operating system" of traditional enterprises—budgets, assessments, promotions, incentives—is designed for a clear departmental structure. When attempting to run a new "program" of matrix management, the system encounters errors everywhere: • How to allocate the budget? For an employee serving multiple projects, which department should bear their costs? • How to measure performance? Cross-department contributions are often difficult to quantify and carry low weight in promotion reviews. • How to align incentives? When a salesperson's bonuses are only tied to their department's GMV, how much motivation do they have to spend time and effort helping optimize a process issue that affects user experience in the supply chain? Multiple studies and practices in organizational behavior indicate that in companies that fail to simultaneously innovate their human resources and financial systems, the failure rate of matrix management is extremely high. This is not an issue for others; it is a systemic mismatch. AI Era: Connection is More Important than Division of Labor The rise of artificial intelligence is ending the past monopoly of decision-making based on hierarchy and experience. AI can analyze vast amounts of data to uncover subtle connections and trends that are difficult for humans to perceive, making insights faster and more accurate. The remaining core task is to transform data insights into specific products, services, and experiences. This is essentially creative implementation, a process that cannot be completed by a single department on an assembly line but must rely on rapid, flexible cross-functional collaboration. Some new consumer brands known for their agility derive their core capabilities from this. They have built a data-driven, real-time co-creation organizational model. When a data platform identifies a budding consumer trend, it can quickly assemble roles from product, R&D, supply chain, marketing, etc., to form agile teams that complete the closed loop from concept to market launch in a very short cycle. This is not a miracle but a reflection of organizational integration capability. In the future organization, the physical boundaries of departments will become increasingly blurred. "Capabilities belong to individuals, resources belong to the company, and value belongs to users" will become the new norm. An employee may be a product manager for one category today and become a solution expert for a specific user scenario tomorrow From Structural Adjustment to System Reinstallation The entire company is synchronously implementing radical organizational changes, akin to requiring an airplane in flight to change its engine, which carries high risks. A more pragmatic approach is often gradual, moving from "patching" to "reinstalling the system." Level One: Establishing "Innovation Special Zones." Beyond the main business, select strategic new businesses or tracks, and form fully authorized cross-functional "special operations teams." Provide them with independent budgets, decision-making power, and incentive mechanisms, operating like a startup. The success of the special zone can not only bring new growth but also inject new working methods and confidence into the entire organization, with its experiences gradually benefiting the main business. Level Two: Reconstructing the Human Resources "Operating System." If the organization is hardware, the human resources system is the operating system. Running a new collaboration model requires reinstalling this OS. Building a "Talent Pool": Release some key talents from departmental ownership, transforming them into company-shared resources, with project teams "purchasing" as needed, and costs accounted for in project expenses. Designing "Contribution Points": Develop a system to quantify employees' contributions in cross-departmental collaboration, solving complex problems, etc., and strongly link it to incentives and development. Mapping "Career Canvases": Break the singular "management promotion" channel and design diverse development paths for employees, such as becoming Deep Experts, Scenario Architects, or Growth Operators, with clear success standards and value returns for each path. Level Three: Cultural Reshaping—Creating for Users, Not Working for KPIs. • Senior Leadership Demonstration: The CEO regularly hosts meetings, not discussing departmental performance, but evaluating "What real problems have we solved for users?" • Rewarding Collaboration: Establish special bonuses to reward temporary teams that address long-term cross-departmental user pain points. • Transparent Political Resistance: Make project goals, progress, resource allocation, and bottlenecks as transparent as possible internally, leaving no room for ineffective collaboration to hide. Level Four: Building a Digital "Nervous System." Agile collaboration requires digital infrastructure to support it. Utilize collaborative office platforms to make finding experts, sharing information, organizing meetings, and following up on tasks as natural as breathing, significantly reducing the friction costs of collaboration. Experimentation and Breaking Walls: A Gradual Organizational Rebirth After two years of failure amidst the chaos of matrix reform, a quieter yet profound transformation is brewing. This time, the driver is not the chairman eager to achieve everything in one go, but a newly appointed CEO brought in from outside by the board. What stands out in this CEO's resume is not the scale growth in mature markets, but the successful implementation of "gradual organizational change" in another traditional enterprise. When appointing him, the board did not provide a typical performance betting agreement, but a clear strategic authorization for "organizational reshaping and capability building." The resolution states: "The board will tolerate short-term pain and uncertainty, expecting fundamental improvements in long-term organizational resilience and market responsiveness." "This paved the way for all his subsequent unconventional operations. He understood that the failure of the first reform was not due to a flawed blueprint of matrix management, but rather the attempt to execute a concept that required a completely new 'operating system' using the power logic, assessment systems, and cultural inertia of the old organization. This is akin to forcibly installing a macOS application on a Windows system; a crash is inevitable. His strategy was not to reinstall that fancy application, but to start from the ground up, quietly writing new drivers. He did not issue any grand organizational change declarations, but instead initiated three seemingly small yet carefully designed 'social experiments.' First, selecting collaboration officers He required each department to nominate 1-2 collaboration officers, whose annual performance would be 100% dependent on their contributions to cross-departmental projects. He personally participated in the selection, looking not for the most senior or obedient managers, but for those who had a deep understanding of user pain points, felt powerless against cross-departmental conflicts, and still had a willingness to collaborate. He told these officers: 'Your task is not to become heroes, but to be pathfinders and translators, translating user language into actions that different departments can understand, and also translating departmental difficulties into systemic problems that the company needs to solve.' He knew that some of them might fail, even 'sacrifice,' but each time they encountered obstacles, it would precisely expose the 'rusty screws' in the organizational system. Second, establishing a user problem-solving fund He set up a user problem-solving fund of 3 million yuan, which any employee could apply for up to 300,000 yuan to address a long-standing, obvious cross-departmental user pain point. The only and strict condition was: the solution team must come from at least three different departments. At the first funding meeting, he told the review panel: 'What we are buying with this money is not just an easy-to-tear package or a non-clumping formula. What we are truly investing in is the colleagues from marketing, R&D, and supply chain, who, for a specific user and not for their own KPIs, sit down to argue, compromise, and collaborate for the 'first time.' Even if the project fails, as long as they have gone through this process, it is a success.' Third, creating a 'user war room' He transformed a meeting room into a 'user war room,' which any cross-departmental project team could reserve. Projects entering this room automatically received three privileges: 1) a weekly 15-minute direct 'hotline' to the CEO; 2) priority recommendation rights for cross-departmental resource allocation; 3) 20% of the new profits from the project as a team reward. This was not a simple incentive. The CEO explained: 'The "hotline" is not for me to solve their problems, but when the resistance of the old system (departmental indifference, rigid processes) tries to swallow this new project, I can use my power to temporarily create a 'rule exemption zone.' My role is that of a forest ranger, not a gardener.' The process is far more rugged than the result The blueprint is beautiful, but reality is full of landmines. A star collaboration officer was marginalized within the department due to his unique assessment standards, with rumors that 'he is no longer one of us.' A fund project about "easy-tear packaging" lingered to death in the signing process due to touching the annual cost reduction targets of the procurement department and the risk clauses of the legal department. The first star project of the operations room faced strong doubts from the vice president of sales in the mid-term because its results might divert sales from traditional channels. Most of the time, this CEO was not painting a strategy but was struggling against the organization's rejection response. He needed to intervene frequently, using the board's authorization as a backing to mediate disputes and protect those fragile "experiments." He publicly questioned a director who was obstructing the project: "Are you managing a department or running a business?" He also did not hesitate to use his power of rewards and punishments, generously rewarding the team that broke through and transferring two middle managers who stubbornly clung to their barriers and repeatedly failed to change. He realized that the greatest cost of this transformation was not money, but the undeniable attention and political capital that the highest decision-maker must continuously invest. The Role of the Chairman: From "Flag Bearer" to "Cornerstone" The chairman, who had previously pushed for radical reforms and faced setbacks, now showed true evolution. In the board meeting where the new CEO faced the greatest internal resistance, he chose to provide silent support. After the meeting, he told the CEO: "Last time, I wanted to be the conductor and directly play a new symphony, but the orchestra fell apart. This time, I learned to be the owner of the concert hall, ensuring that the roof doesn't leak, the sound can be transmitted, and stubborn musicians can be replaced. My support is no longer the call to charge but a load-bearing wall." This role change provided crucial stability and patience for the transformation. Slowly, changes began to take root. Initially, they were spotty: a packaging issue was resolved, and user complaint rates plummeted; a regionally customized product unexpectedly became popular. Then they became linear: collaborative specialists began to spontaneously form mutual aid networks; projects in the operations room required two weeks' advance booking. Ultimately, it was a change in temperament: in cross-departmental meetings, the blame of "why didn't you do it well" decreased, while discussions of "what do users need, and how can we achieve it together" increased. In an employee survey a year later, a dramatic reversal occurred: "cross-departmental collaboration," which had long ranked at the top of the "complaints list," fell out of the top five and quietly entered the "sources of achievement" list. Yuexiang ultimately did not announce its transformation into some kind of "matrix organization." However, its revenue and profit returned to a stable growth path in the third year, the total number of employees remained stable, while the per capita contribution rate of new products and user satisfaction index significantly improved. More importantly, it gained a valuable capability: no longer fearing problems, because an internal network of connections and error correction mechanisms had grown around user value, automatically aligning and quickly trialing. In fact, Yuexiang Foods did not become a model for any classic management model but inadvertently became a model of a high-connectivity density organization. Its rebirth proves that when the quality, speed, and resilience of internal connections are sufficient to cope with the complexity and uncertainty of the external environment, it gains a dynamic evolutionary capability that transcends the structure itself This reveals a deeper truth than simply choosing a management model: excellent organizations never make a single choice between "hierarchical" and "matrix" structures. They are committed to building a state—where the most knowledgeable about users can be trusted, empowered, and connected; where the best ideas can flow, collide, and be realized with minimal resistance. The goal is never a beautiful organizational chart, but a highly active value creation network. The future will not belong to those organizations with the most perfect structures, but to those with the highest connection density and fastest error correction. There, having multiple roles for one person is a release of creativity rather than exploitation, and collaboration is an organizational instinct as natural as breathing. On the ruins of departmental walls, user value continues to grow. Because users never recognize your departmental divisions, and the market never respects your internal boundaries. The essence of the world is connection, and the future belongs to those who can transform themselves into organic networks. Now, the final question remains valid: in your organization, where is the wall that should be torn down the most? And are you ready to be that patient and steadfast "forest ranger" and "load-bearing wall"? (To clarify the core points, this article uses fictional cases for illustration. The characters, companies, data, and other details involved in the cases are necessary for constructing the scenario and do not represent any real individuals or events, nor do they point to specific real situations.) Chen Ke | Text Chen Ke is the COO of ANTA SPORTS The HBR China Expert Writing Group will gather operators and managers from the front lines of business, combining theoretical innovation with practical insights to share actionable management methods and business experiences. A series of articles will be released in succession, so stay tuned. Contact Information newmedia@hbrchina.org