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.

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.

Microsoft

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

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

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
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-methodology
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 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.

Other Decision-Making Frameworks

Lateral Thinking

lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving can, at times, create a big impact.

Divergent Thinking

divergent-thinking
Divergent thinking is a thought process or method used to generate creative ideas by exploring multiple possible solutions to a problem. Divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. These ideas are generated and explored in a relatively short space of time. 

Cynefin Framework

cynefin-framework
The Cynefin Framework gives context to decision making and problem-solving by providing context and guiding an appropriate response. The five domains of the Cynefin Framework comprise obvious, complicated, complex, chaotic domains and disorder if a domain has not been determined at all.

SWOT Analysis

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.

Pareto Analysis

pareto-principle-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.

Failure Mode And Effects Analysis

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.

Blindspot Analysis

blindspot-analysis
A Blindspot Analysis is a means of unearthing incorrect or outdated assumptions that can harm decision making in an organization. The term “blindspot analysis” was first coined by American economist Michael Porter. Porter argued that in business, outdated ideas or strategies had the potential to stifle modern ideas and prevent them from succeeding. Furthermore, decisions a business thought were made with care caused projects to fail because major factors had not been duly considered.

Blue Ocean Strategy

blue-ocean-strategy
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

Connected Business Matrices

SFA Matrix

sfa-matrix
The SFA matrix is a framework that helps businesses evaluate strategic options. Gerry Johnson and Kevan Scholes created the SFA matrix to help businesses evaluate their strategic options before committing. Evaluation of strategic opportunities is performed by considering three criteria that make up the SFA acronym: suitability, feasibility, and acceptability.

Hoshin Kanri X-Matrix

hoshin-kanri-x-matrix
The Hoshin Kanri X-Matrix is a strategy deployment tool that helps businesses achieve goals over the short and long term. Hoshin Kanri is a method that seeks to bridge the gap between strategy and execution. Strategic objectives are clearly defined and the goals of every level of the organization are aligned. With everyone moving in the same direction, process coordination and decision-making ability are strengthened.

Kepner-Tregoe Matrix

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.

Eisenhower Matrix

eisenhower-matrix
The Eisenhower Matrix is a tool that helps businesses prioritize tasks based on their urgency and importance, named after Dwight D. Eisenhower, President of the United States from 1953 to 1961, the matrix helps businesses and individuals differentiate between the urgent and important to prevent urgent things (seemingly useful in the short-term) cannibalize important things (critical for long-term success).

Decision Matrix

decision-matrix
A decision matrix is a decision-making tool that evaluates and prioritizes a list of options. Decision matrices are useful when: A list of options must be trimmed to a single choice. A decision must be made based on several criteria. A list of criteria has been made manageable through the process of elimination.

Action Priority Matrix

action-priority-matrix
An action priority matrix is a productivity tool that helps businesses prioritize certain tasks and objectives over others. The matrix itself is represented by four quadrants on a typical cartesian graph. These quadrants are plotted against the effort required to complete a task (x-axis) and the impact (benefit) that each task brings once completed (y-axis). This matrix helps assess what projects need to be undertaken and the potential impact for each.

TOWS Matrix

tows-matrix
The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

GE McKinsey Matrix

ge-mckinsey-matrix
The GE McKinsey Matrix was developed in the 1970s after General Electric asked its consultant McKinsey to develop a portfolio management model. This matrix is a strategy tool that provides guidance on how a corporation should prioritize its investments among its business units, leading to three possible scenarios: invest, protect, harvest, and divest.

BCG Matrix

bcg-matrix
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Growth Matrix

growth-strategies
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Ansoff Matrix

ansoff-matrix
You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.

Read Next: Growth Hacking, SWOT Analysis, Personal SWOT Analysis, TOWS Matrix, PESTEL Analysis, Porter’s Five Forces.

Read Next: Root Cause Analysis, 5 Whys.

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 Matrix, Kotter’s 8-Step Change Model.

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