ATD Blog

Describing the 2X2 Matrix

Monday, November 3, 2014

It is a fact that small to medium-sized businesses (SMEs) are the driving force of economic development in virtually all economies. It is also a fact that, for the most part, SMEs tend not to hire business school graduates, nor employ the services of management consultants because both tend to be too expensive for small(ish), entrepreneurially driven businesses.

But SMEs have complex issues to wrestle with as much as the much larger corporations. These include people issues, growth issues, and strategic issues—in addition to the more day-to-day issues of cash-flow, funding, winning new business, and client/customer service. And SMEs have, by definition, much more limited resources.

Enter the 2x2 matrix

At one of the companies I chair, we used a product/market matrix to evaluate where we are and where we want to be—dissecting our existing products, existing markets, new products, and new markets. Taking a deep look at our relative competitive strength and weaknesses, we then employed the Johari's Window matrix to create as open and honest discussion as possible about management bandwidth to be able to drive the business forward.

The net result was a plan that everyone:

  • understood and was committed to
  • felt was tough but achievable
  • had clarity of purpose.   

All in all, it was a good result—achieved in a day, helped massively by these simple 2x2 matrices. 
Can these matrices be of value to start-up businesses? The answer is emphatically Yes! When resources are even more limited than in established SMEs, both people and money, the ability to self-diagnose and self-help, is of even greater importance. Any business of any size at any stage of its existence can make valuable use of the most basic of the 2x2 matrices, namely the SWOT analysis. 

SWOT can be of serious value even before a business is launched—during the pre-start-up situation as part of the planning process. An effective application of SWOT should help the significantly focus the embryonic business to a terrain where it is rapidly able to win. In toher words, where the business has real Strength,  real Opportunities, defined  Weaknesses (and actions to mitigate or minimize them), and known Threats. 


Final word 

No matrix on its own is of value. The value is derived from its application. The value is derived by using the matrix to drive thinking, discussion, analysis, and evaluation. The matrix is only of such value as the people employing it. 

Case in point: A colleague recently drew on a flip chart a 2x2 to help us think through the implementation of certain strategic initiatives—the vertical axis being “size of the prize” from low to high, the horizontal axis being “ease of implementation” from hard to easy. Clearly, the most attractive option was the top right box with high size of prize and relative ease of implementation. 

Remember: There are virtually an infinite number of matrices. Creating a 2x2 matrix for your own specific requirements is easy. So, go for it and experiment!

About the Author

John Dembitz has had an eclectic career spanning some 40 years, including being a McKinsey consultant, CEO of professional service organizations, executive director of a merchant bank and a manufacturing company, and chairman and non-executive director of a diverse range of SME companies. He is and has been involved in a number of entrepreneurial ventures and continues to be engaged in a number of consulting assignments. He has an MBA from London Business School, and a BSc (Hons) from Manchester University.

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