Paring down the issues

A new book reminds readers that, to solve problems, it’s always wise to simplify your parameters first

A review of The Power of the 2x2 Matrix, by Alex Lowy and Phil Hood. Published by Jossey-Bass, 2004.

By Robert Colman

Business problems are rarely simple to solve. Part of the difficulty, however, comes not from a business problem’s complexity but simply our inability to effectively frame the problem in a manageable form. The Power of the 2x2 Matrix: Using 2x2 thinking to solve business problems and make better decisions is an attempt to encourage business professionals to use a 2x2 matrix model to simplify their thinking to create a better foundation for the problem solving process.

Authors Alex Lowy and Phil Hood use the 2x2 matrix to explore complex business issues as a set of dueling interests. Instead of searching for a single correct solution, the search becomes one for understanding, perspective and insight.

The first example in the book is a useful one. The authors describe how Canadian Imperial Bank of Commerce (CIBC) in 1994 were trying to solve an organizational crisis. The bank was losing market share to other banks, which were making inroads into some of CIBC’s core client accounts. The vice-president of leadership and learning, Hubert Saint-Onge, was able to frame the problem as an attempt to strike a balance between alignment and autonomy. Some of the best employees were out of control, “behaving like cowboys.” On the other hand, other employees had become too passive and were afraid to make decisions or take risks.

By simplifying the problem and pointing to where the company wanted to be (the upper right quadrant in figure 1), Saint-Onge created a central discussion point from which further discussion and problem solving could develop.

The authors stress that this is the best time to use a 2x2 matrix — when discussion has reached an impasse and it appears that there is no effective way forward. At this point, the people involved have to sit down to determine what the basic argument is all about. What are the opposing forces and how can you move the people on either side of that equation closer to understanding each other?

To further guide the reader, the book outlines eight archetypal dilemmas that companies, and individuals, face on a regular basis. It’s unlikely that many arguments will be a pure example of any of these archetypes, but chances are tension will exist within relationships because of divisions on these points. By considering them, the reader can clarify the issues at hand.

From these basic considerations, the authors suggest a step-by-step 2x2 matrix methodology to move from an impasse to a clear conception of the essential tension in question. Helpfully, they provide a full, thorough chapter on how Fujitsu Transaction Solutions (FTXS) used the methodology to redefine its vision, taking the reader through the issues and challenges the company faced, its definition of the core dilemma, modeling and analysis of the problem, gap analysis and resolution planning.

Interestingly, the majority of the book outlines how the 2x2 matrix can be used within strategic frameworks. The book examines five categories of strategic frameworks: customer needs, strategic context, strategic options, marketing and communications, and risk management. The authors essentially apply the 2x2 Matrix to a plethora of well-known strategic models, including the Gartner Magic Quadrant; Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis; and Market Tipping.

Through the use of a fairly simple construct, Lowy and Hood offer in The Power of the 2x2 Matrix a way to simplify the organization of strategic issues to chart a better course toward solving them.

Robert Colman is editor-in-chief of CMA Management.

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