I ran across this post that talks about how Spotify has been continuously evolving the structure of their organization to ensure that they remain lean and mean as the company grows. I think a lot of big companies have struggled with managing matrix organizations, which is essentially what this looks like on the surface, but Spotify argues that you need to think about the alignment of the matrix in a different way.
The traditional approach to a matrix structure is to pool together people of common skills under a single functional manager, then assign those individuals to projects. So, the matrix is organized first and foremost around the axis of managing those groups, the people of which get assigned to projects based on the needed skills.
Spotify, on the other hand, turns this model on its side and instead organizes people along the axis of products or services that are largely autonomous. What you then get is a matrix organization composed of stable, co-located teams containing a mixture of people with various skills. The matrix aspect comes into play because there is a softer, horizontal alignment that groups together people of common skills. This is necessary because a company still needs to achieve architectural integrity and facilitate the sharing of tools and processes.
I’m very interested in seeing how this model evolves at Spotify, because I think some of these concepts could be applied at larger companies that struggle with staying agile and innovative.