- 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.
|Aspect||Description||Analysis and Strategy||Examples|
|Problem Analysis||The 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 Analysis||After 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 Analysis||In 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 Analysis||The 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.
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.
- 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
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.
Therefore, we assisted with the adaptation of optimization processes, from manufacturing to software, with the rise of the agile movement.
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
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