The Matrix Doesn't Know

The Matrix Can’t Read Your Mind

One of the typical tools for facilitating product portfolio management is a decision matrix – some kind of multi-factor analysis that might include, for example, market size, market growth, and expected margin. Many also include subjective criteria such as “fit with strategy.”

I had the privilege of building one such matrix. I chose to use only qualitative factors since one of the main reasons for the project was to provide objectivity to a decision making process that was regarded as arbitrary and subjective. Although I did have a factor for strategic fit, in that particular case an established industry trade group provided a market breakdown that corresponded closely with the company’s own strategic classification.

After setting up some nice formulas in an Excel workbook I was ready to show my work. I demonstrated to the project sponsor that the criteria weighting could be easily adjusted: if market share were set to the highest priority, Option A emerged as the strongest; if profit margin were the top priority, Option B became the most compelling; and if long-term strategy were most important, Option C took the top spot

All that was needed, then, was clear input on the business priorities, and from that new product development priorities could be clearly, consistently, and rationally defined.

Consequently the tool was never used.

A major part of the reason the existing process was perceived as arbitrary and subjective was that the strategic priorities were not clearly defined in the first place; in fact the official vision statement of the corporation, if actually practiced, would have resulted in direct competition with the parent company of the corporation – with the end result of the child overthrowing the parent!

In a world in which we can measure sub-atomic particles, objective quantifiable data is available without limit. Data can never tell you what to do unless it is filtered through a purpose; you must already know what your intentions are before information can help you understand how to achieve them. Purpose makes the difference between bricks and mud, between surgery and assault, between chaos and progress. You cannot make data-driven decisions until you know where you want to go.

Published by

Arlan

I like reasons.

Leave a Reply

Your email address will not be published. Required fields are marked *