The Kepner-Tregoe matrix was created by management consultants Charles H. Kepner and Benjamin B. Tregoe in the 1960s developed to help businesses navigate the decisions they make daily, the Kepner-Tregoe matrix is a root cause analysis used in organizational decision making.
Understanding the Kepner-Tregoe matrix
The method was developed to help businesses navigate the decisions they make daily. Many of the most critical decisions tend to be made quickly and without much thought.
This leads to a less than satisfactory decision-making process based on emotion, intuition, and jumping to conclusions.
Happily, decision-making is a skill that can be learned. The Kepner-Tregoe matrix approaches each decision by gathering, organizing, and then evaluating key decision-making information.
Indeed, the matrix is a rational model of systematic decision making guided by the assessment and prioritization of risk. The model emphasizes finding the best possible choice with minimal negative consequences.
The eight major steps to the Kepner-Tregoe matrix
Kepner-Tregoe matrices can become quite complex if many factors are contributing to the decision making process.
However, most analyses incorporate eight steps:
1 – Create a decision statement.
What action is required? What are the key objectives? What is the desired outcome, or how will a successful decision be defined? There is no need to be ultra-specific at first, but it is important to understand the problem and why corrective action must take place. Problems should be discussed from multiple perspectives with team members feeling free to voice their concerns.
2 – Define operational objectives
These factors include:
- Strategic requirements (“must-haves”) – what must the final decision provide, include, or allow for? Strategic requirements are absolute in the sense that no compromise is made. For example, a trampoline company must manufacture trampolines that can accommodate a weight of 300 lbs.
- Operational objectives (“wants”) – what does the business want the final decision to support? What would be nice to have?
- Restraints (limits) – factors that limit the ability to decide, such as money, expertise, or materials.
3 – Weight operational objectives
For each “want” identified in the previous step, weight each on a scale of 1-10 with 10 being the most important. The trampoline company may want market dominance in the adolescent and young adult sector, scoring this want an 8 out of 10.
4 – Generate a list of alternatives
For each decision, brainstorm a list of potential alternative courses of action. This includes a course of action that does not support previously identified operational objectives (“wants”).
5 – Assign relative scores to each alternative
For the first alternative action, rate each objective (want) based on how well the alternative supports (satisfies) the want using a scale of 1 to 10. Then, multiply each weighted score from step 3 by the satisfaction ranking
For example, the trampoline company may consider that an alternative to market domination may be a place among the five top sellers. They assign this alternative a score of 5, meaning that the weighted score is 8 x 5 = 40.
Lastly, each weighted score should be added together to produce a final score for each alternative course of action.
6 – Rank the highest-scoring alternatives
From the total weighted score for each alternative course of action, choose the three highest scorers.
7 – Generate a list of problems
Then, generate a list of potential problems for each, scoring them on a scale of 1 to 10 based on their probability and significance.
8 – Compare rankings
Decision-making should then be guided by comparing the ranking of alternative courses of action with their respective adversity rankings. Higher alternative rankings matched with lower adversity rankings are preferable. However, decision-makers can reduce the probability of adverse effects by generating a list of proactive and unbiased solutions.
Kepner-Tregoe matrix examples
In the final section, we will take a look at some case studies of how the matrix has been used in real-world scenarios.
When CEO Satya Nadella took the helm of Microsoft in 2014, he implemented a company-wide growth strategy that emphasized the importance of customer satisfaction and lifelong learning.
To better serve its customers, Microsoft’s Customer Service & Support (CSS) incorporated the Kepner-Tregoe methodology into CSS systems and metrics around the world. Specifically, the rational processes of the approach were used by engineers and advocates to find problem root causes with speed and accuracy, make better decisions, and minimize problem recurrence.
Microsoft used the matrix to further the following primary objectives:
- Increase customer satisfaction and team collaboration.
- Drive a culture of obsession with the customer.
- Drive handling experience that is the best in the world.
- Reduce important metrics such as days to solve (DTS) and time minutes per incident/net effort (TMPI).
After just three months, the results were clear. The Kepner-Tregoe approach allowed Microsoft to reduce DTS by an average of 1 day per case. Total TMPI was also reduced by an average of 27 minutes per case, while the customer satisfaction metric increased by 3.3%.
CSS now integrates Kepner-Tregoe methodologies into customer service and provides specific documentation on how it should be applied into a workflow. More than 7,000 CSS team members now use it to deliver a superior experience for Microsoft’s customers.
Target Corporation used the Kepner-Tregoe approach to improve IT incident management performance. Specifically, the company wanted to speed up the resolution process of incidents while minimizing the impacts to operations and the customer.
Target was motivated to make better decisions in high-stakes scenarios for a few different reasons. For one, incidents within the company were becoming increasingly complex which meant the probability of a major outage also increased. What’s more, the experts who managed these issues were spread over a wide geographic area and required a significant degree of coordination to resolve problems in real time. Perhaps most importantly of all, Target lacked a consistent and repeatable approach for addressing incidents and ensuring that every key stakeholder was abreast of the latest developments.
For four months, Target developed a scalable approach to incident management with respect to the following metrics: variation, time-to-restore, and avoidance of global incidents. The approach resulted in a 74% reduction in average time-to-restore and an appreciable increase in the percentage of global incidents that were avoided.
This was achieved by first establishing a baseline performance level against which all capabilities, processes, and IT functions would be evaluated. Target then used Kepner-Tregoe principles to streamline the series of process steps and decisions that were used in incident management. This helped the company reduce stress and panic in extreme scenarios and avoid a situation where decision-makers wasted time on ineffective “trial-and-error” problem-solving attempts.
Happily for Target, the project also resulted in process quality and consistency improvements.
Kepner Tregoe vs. Six Sigma
Both approaches look at improving efficiency, focusing on a data-driven approach. At the same time, the Kepner-Tregoe matrix is a decision-making technique used in various business contexts.
Six Sigma, instead, is primarily used to improve efficiencies in the manufacturing processes.
Of course, six sigma can also be adapted to any optimization process within the organization to understand what can be improved.
Yet, the six sigma approach primarily use was in manufacturing and supply chains. Over time, six sigma has also been adapted to software development.
In fact, with the rise of the software industry, which has overtaken hardware, and physical processes (today, products like the iPhone and Tesla improve thanks to software updates rather than just hardware updates), software updates can produce improvements many times over compared to just hardware.
In this context, six sigma has been adapted to the software world.
Indeed, all the agile movement also comes from previous optimization processes applied to manufacturing, like six sigma and lean manufacturing.
Therefore, we assisted with the adaptation of optimization processes, from manufacturing to software, with the rise of the agile movement.
- The Kepner-Tregoe matrix is a decision-making technique with a focus on the rigorous analysis and evaluation of decisions and their alternatives.
- The Kepner-Tregoe matrix allows businesses to make smarter decisions on critical issues that are often subject to biases such as emotion or time constraints.
- The Kepner-Tregoe matrix can be completed in eight steps, culminating in numerical scores being assigned to each decision based on weighted factors based on company needs.
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