Kepner-Tregoe Matrix In A Nutshell

  • 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.
AspectDescriptionAnalysis and StrategyExamples
Problem AnalysisThe first step in the Kepner-Tregoe Matrix. It involves defining the problem, describing its impact, identifying the specific issues, and gathering data to understand the situation thoroughly.Analyzing the problem helps in clarifying the issue, ensuring everyone understands it, and gathering relevant data. This step sets the foundation for the subsequent analytical processes.Identifying production bottlenecks, diagnosing quality issues, addressing customer complaints.
Decision AnalysisAfter problem analysis, this step involves generating possible solutions or options to address the problem. Each option is evaluated based on criteria such as feasibility, risks, benefits, and cost-effectiveness.Decision analysis systematically assesses potential solutions, considering their pros and cons. It helps in selecting the most viable and effective course of action.Evaluating software vendors for a new system, choosing a supplier for raw materials, selecting a marketing strategy.
Potential Problem AnalysisIn this step, potential issues or risks associated with the chosen solution are identified. Contingency plans are developed to address these potential problems should they arise during implementation.Identifying potential problems in advance allows for proactive planning and risk mitigation. It ensures smoother execution of the chosen solution.Preparing for supply chain disruptions, outlining response plans for project delays, risk assessment for new product launches.
Situational AnalysisThe final step evaluates the overall situation and assesses whether the chosen solution aligns with the organization’s goals and resources. It also considers any external factors that may impact the decision.Situational analysis provides a holistic view of the decision’s implications. It helps in ensuring alignment with organizational objectives and adaptability to changing circumstances.Assessing the financial impact of the chosen strategy, evaluating the workforce’s capability to execute the plan, considering market trends for product launches.

Understanding the Kepner-Tregoe matrix

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.

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.

Apple Inc.

  • Problem-Solving in Product Development: Apple might use, for instance, the Kepner-Tregoe matrix in its product development process to systematically address design and engineering challenges. For instance, when designing the iPhone X, Apple’s engineering team faced the challenge of incorporating Face ID technology into a borderless display. They used the matrix to assess alternative design approaches, evaluate the impact on user experience, and make a decision that led to the successful integration of Face ID.
  • Quality Control in Manufacturing: Apple’s manufacturing facilities utilize the Kepner-Tregoe approach to maintain product quality. When a manufacturing defect or deviation occurs, the matrix helps engineers and quality control teams identify the root cause, assess the potential impact on product quality, and decide on corrective actions. This systematic approach ensures that product defects are addressed effectively, minimizing production disruptions.


  • Data Center Management: Google might rely on Kepner-Tregoe methodologies to manage its extensive network of data centers. When a critical issue arises, such as a server outage or data loss, Google’s data center teams follow the matrix’s problem-solving process. They define the problem, gather data, analyze potential causes, and rank solutions based on their impact and feasibility. This approach enables Google to maintain the reliability and uptime of its data centers, which are crucial for its cloud services and search operations.
  • Product Prioritization: Google’s product management teams use the Kepner-Tregoe matrix to prioritize new features and enhancements for products like Google Workspace and Google Cloud Platform. By defining operational objectives, weighting them, and evaluating alternative development paths, Google ensures that it invests resources in the most impactful product improvements. This systematic approach aligns product development with customer needs and market trends.


  • Supply Chain Optimization: Amazon might employ the Kepner-Tregoe matrix in its supply chain management to address logistical challenges. When disruptions occur in the supply chain, such as delays in product deliveries or inventory shortages, Amazon’s logistics teams apply the matrix to identify the root causes, assess the impact on customer orders, and select the best corrective actions. This approach helps Amazon maintain its reputation for reliable and efficient order fulfillment.
  • Customer Service Resolution: Amazon’s customer service teams utilize the Kepner-Tregoe approach to resolve complex customer issues. When customers report problems with their orders or services, Amazon’s support agents follow a structured problem-solving process based on the matrix. They define the issue, gather relevant information, analyze potential causes, and recommend solutions. This systematic approach ensures consistent and effective customer problem resolution.

Kepner Tregoe vs. Six Sigma

Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

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.

Lean manufacturing seeks to maximize product value while minimizing waste without sacrificing productivity. According to the Lean Enterprise Research Centre (LERC), 60% of a typical manufacturing process is waste. While the removal of waste is perhaps synonymous with lean manufacturing, the goal of the methodology is the sustainable delivery of value to the customer.

Therefore, we assisted with the adaptation of optimization processes, from manufacturing to software, with the rise of the agile movement.

Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Key Highlights about the Kepner-Tregoe Matrix:

  • Kepner-Tregoe Matrix: The Kepner-Tregoe matrix is a decision-making tool developed by management consultants Charles H. Kepner and Benjamin B. Tregoe in the 1960s. It aims to improve the quality of organizational decisions by providing a systematic approach.
  • Purpose: The method was designed to counteract hasty and emotion-driven decision-making, providing a structured process for analyzing and evaluating options.
  • Eight Steps of the Kepner-Tregoe Matrix:
    • Create a Decision Statement: Define the action required, key objectives, and desired outcomes.
    • Define Operational Objectives: Identify strategic requirements, operational objectives, and restraints related to the decision.
    • Weight Operational Objectives: Assign weights to operational objectives to prioritize their importance.
    • Generate Alternatives: Brainstorm potential courses of action, including alternatives that don’t satisfy operational objectives.
    • Assign Relative Scores: Score each alternative against operational objectives based on how well they satisfy each objective.
    • Rank Alternatives: Select the top three alternatives with the highest weighted scores.
    • Generate Problem List: Identify potential problems associated with each alternative and rank their significance and probability.
    • Compare Rankings: Evaluate alternative courses of action by comparing their rankings with adversity rankings to make informed decisions.
  • Application Examples:
    • Microsoft: Used the Kepner-Tregoe approach to improve customer service and support processes, resulting in reduced case resolution times and increased customer satisfaction.
    • Target: Employed the methodology to enhance IT incident management performance, leading to a significant reduction in time-to-restore and an increase in avoided global incidents.
  • Comparison with Six Sigma:
    • Kepner-Tregoe Matrix: Primarily focuses on structured decision-making to improve efficiency in various business contexts.
    • Six Sigma: Data-driven approach for eliminating defects in products, services, or processes, originally developed for manufacturing and later adapted to other fields, including software development.
    • Agile Movement: Derived from optimization processes like Six Sigma and Lean Manufacturing, adapted to the software industry, emphasizing continuous iteration and value delivery.

Connected Analysis Frameworks

Failure Mode And Effects Analysis

A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Business Valuation

Business valuations involve a formal analysis of the key operational aspects of a business. A business valuation is an analysis used to determine the economic value of a business or company unit. It’s important to note that valuations are one part science and one part art. Analysts use professional judgment to consider the financial performance of a business with respect to local, national, or global economic conditions. They will also consider the total value of assets and liabilities, in addition to patented or proprietary technology.

Paired Comparison Analysis

A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Monte Carlo Analysis

The Monte Carlo analysis is a quantitative risk management technique. The Monte Carlo analysis was developed by nuclear scientist Stanislaw Ulam in 1940 as work progressed on the atom bomb. The analysis first considers the impact of certain risks on project management such as time or budgetary constraints. Then, a computerized mathematical output gives businesses a range of possible outcomes and their probability of occurrence.

Cost-Benefit Analysis

A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

CATWOE Analysis

The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

VTDF Framework

It’s possible to identify the key players that overlap with a company’s business model with a competitor analysis. This overlapping can be analyzed in terms of key customers, technologies, distribution, and financial models. When all those elements are analyzed, it is possible to map all the facets of competition for a tech business model to understand better where a business stands in the marketplace and its possible future developments.

Pareto Analysis

The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Comparable Analysis

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

SWOT Analysis

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

PESTEL Analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Business Analysis

Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.

Financial Structure

In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability, and cash flow generation.

Financial Modeling

Financial modeling involves the analysis of accounting, finance, and business data to predict future financial performance. Financial modeling is often used in valuation, which consists of estimating the value in dollar terms of a company based on several parameters. Some of the most common financial models comprise discounted cash flows, the M&A model, and the CCA model.

Value Investing

Value investing is an investment philosophy that looks at companies’ fundamentals, to discover those companies whose intrinsic value is higher than what the market is currently pricing, in short value investing tries to evaluate a business by starting by its fundamentals.

Buffet Indicator

The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.

Financial Analysis

Financial accounting is a subdiscipline within accounting that helps organizations provide reporting related to three critical areas of a business: its assets and liabilities (balance sheet), its revenues and expenses (income statement), and its cash flows (cash flow statement). Together those areas can be used for internal and external purposes.

Post-Mortem Analysis

Post-mortem analyses review projects from start to finish to determine process improvements and ensure that inefficiencies are not repeated in the future. In the Project Management Book of Knowledge (PMBOK), this process is referred to as “lessons learned”.

Retrospective Analysis

Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle.

Root Cause Analysis

In essence, a root cause analysis involves the identification of problem root causes to devise the most effective solutions. Note that the root cause is an underlying factor that sets the problem in motion or causes a particular situation such as non-conformance.

Blindspot Analysis


Break-even Analysis

A break-even analysis is commonly used to determine the point at which a new product or service will become profitable. The analysis is a financial calculation that tells the business how many products it must sell to cover its production costs.  A break-even analysis is a small business accounting process that tells the business what it needs to do to break even or recoup its initial investment. 

Decision Analysis

Stanford University Professor Ronald A. Howard first defined decision analysis as a profession in 1964. Over the ensuing decades, Howard has supervised many doctoral theses on the subject across topics including nuclear waste disposal, investment planning, hurricane seeding, and research strategy. Decision analysis (DA) is a systematic, visual, and quantitative decision-making approach where all aspects of a decision are evaluated before making an optimal choice.

DESTEP Analysis

A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

STEEP Analysis

The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.

STEEPLE Analysis

The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Activity-Based Management

Activity-based management (ABM) is a framework for determining the profitability of every aspect of a business. The end goal is to maximize organizational strengths while minimizing or eliminating weaknesses. Activity-based management can be described in the following steps: identification and analysis, evaluation and identification of areas of improvement.

PMESII-PT Analysis

PMESII-PT is a tool that helps users organize large amounts of operations information. PMESII-PT is an environmental scanning and monitoring technique, like the SWOT, PESTLE, and QUEST analysis. Developed by the United States Army, used as a way to execute a more complex strategy in foreign countries with a complex and uncertain context to map.

SPACE Analysis

The SPACE (Strategic Position and Action Evaluation) analysis was developed by strategy academics Alan Rowe, Richard Mason, Karl Dickel, Richard Mann, and Robert Mockler. The particular focus of this framework is strategy formation as it relates to the competitive position of an organization. The SPACE analysis is a technique used in strategic management and planning. 

Lotus Diagram

A lotus diagram is a creative tool for ideation and brainstorming. The diagram identifies the key concepts from a broad topic for simple analysis or prioritization.

Functional Decomposition

Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts. According to the Business Analysis Body of Knowledge (BABOK), functional decomposition “helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently.”

Multi-Criteria Analysis

The multi-criteria analysis provides a systematic approach for ranking adaptation options against multiple decision criteria. These criteria are weighted to reflect their importance relative to other criteria. A multi-criteria analysis (MCA) is a decision-making framework suited to solving problems with many alternative courses of action.

Stakeholder Analysis

A stakeholder analysis is a process where the participation, interest, and influence level of key project stakeholders is identified. A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.

Strategic Analysis

Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions, to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model.

Main Guides:

About The Author

Scroll to Top