Tuesday, October 13, 2015

Into The Matrix

The 2x2 matrix is one of the most popular tools in the consultant's toolkit, as well as a regular staple in university textbooks. Consultants like them, because they make simple PowerPoint slides. Instructors like them because they are easy to present, and easy to set exam questions against.

Like any tool, the 2x2 matrix has some valid uses for some situations, as well as some gross abuses. In this post, I want to discuss some of the ways in which the 2x2 matrix can be used.

Matrixes may be used for decision-making (choice). For example, when picking a technology product, many people may start from the Gartner “Magic Quadrant” and only look at the vendors that Gartner has placed in the “leader” quadrant.

Of course this means that they are reliant on Gartner’s criteria, which may not perfectly match their own requirements and company policies. For example, Open Source products tend not to score well on Gartner’s criteria. And the “leader” products may not be the most competitively priced. But sometimes a quick shortcut may be good enough.

Another use of 2x2 matrixes is to show a good balance between different quadrants. For example, the Boston Grid (also known as the Growth-Share Matrix) is used to achieve a balanced product portfolio – you need to invest in question marks and rising stars, because some of them will become your future cash cows.

Portfolio matrixes such as the Boston Grid can be used to direct different actions for each quadrant - most companies will have different management policies for cash cows and rising stars.

This highlights a third use of 2x2 matrixes, which is to guide policy and action for specific cases, according to which quadrant they belong to. Another matrix that can be used in this way is the Enterprise-Architecture-As-Strategy framework, which is used to encourage a situation-dependent (or “contingent”) approach, rather than a one-size-fits-all approach.

Sometimes there is an implication that the top-right quadrant is the “Good” quadrant. So for example, some people wrongly interpret the Enterprise-Architecture-As-Strategy matrix as setting “Unification” to be the ultimate goal for enterprise architecture in every organization. (That’s what happens when people look at the matrix and imagine they don’t need to bother reading the rest of the book.) See my post on Differentiation and Integration (May 2010).

All the matrixes we have looked at so far have scale – typically a scale from Low to High. This means that it's not just about which quadrant, but we can compare the relative positions of two items within the same quadrant. For example, within the “leader” quadrant, some may be higher and further to the right. When there is a meaningful scale in both dimensions, the 2x2 matrix can sometimes turn into a 3x3 matrix (Low-Medium-High).

However, not all 2x2 matrixes have scale. An example of a 2x2 matrix without a clear scale is the Cynefin framework. Like the Enterprise-Architecture-as-Strategy matrix, this is also used to support a contingency approach to consulting - directing the consultant to adopt a completely different approach for each quadrant, without implying that any quadrant is "better" than any other quadrant.

Most people use these matrixes for classification and segmentation, like the Hogwarts sorting hat. However, matrixes can also be used dynamically – to understand the possibility of movement between quadrants. For example, how to turn rising stars into cash cows, how to stop cash cows turning into dogs.

The original paper on Cynefin (by Kurtz and Snowden) also considers transitions between the domains. Situations change over time. As our knowledge increases, there's a natural progression clockwise from Chaos to the Known, while forces of unorder tend to push systems the opposite way. Transitions can be gradual or sudden, and can be decisively one-way, or an oscillation between two domains. The following picture identifies the typical transitions with some explanatory labels.

For further examples of migration around a 2x2 matrix, see my post Tesco outsources core eCommerce (March 2009).


Wikipedia: Advantage MatrixCynefin, Growth-Share MatrixMagic Quadrant

Andrew Johnston, Architects - Masters of Order and Unorder (Agile Architect Blog, undated)
Nate Orenstam, Gartner Magick Quadrante (Valley of the Geeks, February 2008)
Jonathan Sharp, What is the Gartner Magic Quadrant? (Latisys Blog, Sept 2014)
BCG Growth-Share Matrix (Quick MBA)

Enterprise Architecture as Strategy (The Enterprise Newsletter 38, Sept 2007)

Related Posts

Magic Quadrant or Sorting Hat (August 2009)
Differentiation and Integration (May 2010)
Tesco outsources core eCommerce (March 2009)

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