Priority matrix

Definition Priority Matrix 

One of Time Management Techniques is The Priority Matrix is also called The Eisenhower Method or ABC Analysis. The priority matrix is a very simple but very effective tool for helping us get through the tasks we have. It is especially useful for those that have problems with too much work on our plate, or can't seem to get to the work we want to do because new jobs keep hitting our desk from customers, phone calls or new projects.

 CAN YOU DISCUSS THE STEPS IN CONDUCTING THE ANALYSIS USING THIS MODEL?

By using the priority matrix we can decide which tasks get our attention immediately and which ones get left to a later time. 

The Priority Matrix has two dimensions. The first one is importance (important and not important), and the second one is urgency (urgent and not urgent).

All our tasks are divided into four quadrants: important and urgent, important and not urgent, not important and urgent, not important and not urgent. We classify each task according to these quadrants, and then we deal with the tasks according to the quadrant they belong to. 

Quadrant 1: Important and Urgent

Obviously, we need to do the tasks in this quadrant because they’re important, and we should do them first because they are urgent. Usually, if we’re short on time we should do these tasks first. Sometimes, we don’t have a choice, but letting things get to this point has a negative effect on our performance and quality of life. Later, we will discuss how to reduce the number of such tasks.

Quadrant 2: Important and Not Urgent

We take care of tasks in this quadrant after we deal with the tasks in Quadrant 1.

The tasks in Quadrant 2 are not urgent, but we have to take them very seriously because, if we don’t, they will move to Quadrant 1.

It’s better to take care of our tasks before they appear in Quadrant 1. Why? Because there are at least two problems with Quadrant 1 tasks: We have to deal with them quickly, and that can cause stress and worry and even effect the quality of our work.

So, Quadrant 2 (important and not urgent) deserves serious attention. Monitor this quadrant carefully. If needed, divide the tasks into subtasks. Start the tasks on time, even if they don’t look urgent now. Otherwise, you will spend a lot of effort with questionable results, and paying attention to Quadrant 2 will result in good performance while keeping a good quality of life.

Quadrant 3: Not Important and Urgent

Why should we bother with tasks that are not important? Why are they urgent? Many times other people try to force us to deal with these tasks. They are the time robbers. The way to reduce this problem is simply to protect your time.

For example, if someone insists on talking with you in person immediately, and it means you need to travel out of your office, find out why that meeting is so urgent. Maybe you can have a phone call instead, and maybe that person is going to be in your area next week. Protect your time.

Quadrant 4: Not Important and Not Urgent

The tasks in this quadrant are serious time wasters. When you identify a task in that quadrant, try to cancel it. If you can’t eliminate it completely, try to minimize the time you spend on that task.

WHAT ARE THE FIVE ADVANTAGES OF THIS MODEL? What are the FIVE DRAWBACKS OF THIS MODEL?

Advantages and Disadvantages of the Methods

Each method described above has its own advantages and disadvantages. A brief comparison between the methods is carried out in the following section.

Advantages

General advantages of all Function Analysis methods include:

      Helps to structure the problem under investigation.

      Aids in reaching a consensus between study participants; including focusing and making sure they all pull in the same direction.

      Defines the ‘needs’ and ‘wants’ of the customer.

      Ensures a deeper understanding of the problem or project.

      Encourages information sharing between participants.

      It ensures a customer focus whilst keeping objective about the problem

      Supporting the process of generating creative alternative solutions

      Can be used to improve any organization or any product or service

      Is a way to do “data-driven decision-making” as opposed to “fire-fighting”

      Easy for everyone to understand

      Technically simple – Excel is sufficient

      Customer priorities become clear

      Shows managers where to focus attention

      Effects of improvements on customer or employee satisfaction can be measured

      New demands by customers become visible

Disadvantages

Some disadvantages of the traditional Function Analysis methods described above include:

      They are usually cumbersome to structure.

−        Participants have normally not come across the technique employed before and, therefore, have to learn it in a ‘live’ situation which may cause problems.

      They can be time consuming to construct due to semantically arguments

      Constructing the hierarchical tree structure can take a long time due to differences of opinion between participants.

      The skill of the facilitator is important when conducting a traditional Function Analysis.

      Does the end product justify the time spent achieving it? Value = cost/worth?

WHAT INFO WE USUALLY SEEK FROM THE ANALYSIS USING THIS MODEL?

The Urgent/Important Matrix is a powerful way of thinking about priorities. Using it helps you overcome the natural tendency to focus on urgent activities, so that you can keep clear enough time to focus on what's really important. This is the way you move from "firefighting" into a position where you can grow your business and your career.

Here's how it works:

The matrix can be drawn as shown in figure 1, with the dimensions of Importance and Urgency.

Figure 1 – The Urgent/Important Matrix

Follow the steps below to use the matrix to prioritize your activities:

1.      The first step is to list all the activities and projects that you feel you have to do. Try to include everything that takes up your time at work, however unimportant. (If you manage your time using a To-Do List or Action Program, you should have done this already.)

2.      Next, on a scale of 1 to 5, assign importance to each of the activities. Remember, this is a measure of how important the activity is in helping you meet your goals and objectives. Try not to worry about urgency at this stage.

3.      Once you've assigned an importance value to each activity, evaluate its urgency. As you do this, plot each item on the matrix according to the values that you've given it.

4.      Now study the matrix using the strategies described below to schedule your priorities. 

BCG MATRIX 

1)       CAN YOU DISCUSS THE STEPS IN CONDUCTING THE ANALYSIS USING THIS MODEL?

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of SBU’s (Strategic Business Units). In other words, it is a comparative analysis of business potential and the evaluation of environment. According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share. Relative Market Share = SBU Sales this year leading competitors sales this year. Market Growth Rate = Industry sales this year - Industry Sales last year.

The analysis requires that both measures be calculated for each SBU. The dimension of business strength, relative market share, will measure comparative advantage indicated by market dominance. The key theory underlying this is existence of an experience curve and that market share is achieved due to overall cost leadership.

BCG matrix has four cells, with the horizontal axis representing relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if all the SBU’s are in same industry, the average growth rate of the industry is used. While, if all the SBU’s are located in different industries, then the mid-point is set at the growth rate for the economy.

Resources are allocated to the business units according to their situation on the grid. The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular type of business.

10 x                                  1 x                                  0.1 x

Figure: BCG Matrix

1. Stars- Stars represent business units having large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest.
2. Cash Cows- Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units.
3. Question Marks- Question marks represent business units having low relative market share and located in a high growth industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question marks are generally new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted.
4. Dogs- Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages.

2)      WHAT ARE THE FIVE ADVANTAGES OF THIS MODEL?

1)       The BCG-Matrix is helpful for managers to evaluate balance in the companies’s current portfolio of Stars, Cash Cows, Question Marks and Dogs.

2)      BCG-Matrix is applicable to large companies that seek volume and experience effects.

3)      The model is simple and easy to understand.

4)      It provides a base for management to decide and prepare for future actions.

5)      If a company is able to use the experience curve to its advantage, it should be able to manufacture and sell new products at a price that is low enough to get early market share leadership. Once it becomes a star, it is destined to be profitable.

3)      What are the FIVE DRAWBACKS OF THIS MODEL?

1. BCG matrix classifies businesses as low and high, but generally businesses can be medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in this model.
3. High market share does not always leads to high profits. There are high costs also involved with high market share.
4. Growth rate and relative market share are not the only indicators of profitability. This model ignores and overlooks other indicators of profitability.
5. At times, dogs may help other businesses in gaining competitive advantage. They can earn even more than cash cows sometimes.

4)      WHAT INFO WE USUALLY SEEK FROM THE ANALYSIS USING THIS MODEL?

The Boston Consulting Group (BCG) Matrix is a simple tool to assess a company’s position in terms of its product range. It helps a company think about its products and services and make decisions about which it should keep, which it should let go and which it should invest in further.