kepner-tregoe-matrix

Kepner-Tregoe Matrix In A Nutshell

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.

Key takeaways

  • 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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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"