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The Power Of The 2 X 2 Matrix 
I have come across a number of examples of the 2 x 2 matrix in my business career so I instantly took a liking to this book by Alex Lowy and Phil Hood, partners in Toronto based Transcend Strategy Group. In my opinion, this book is an indispensable tool for any business that needs to make critical decisions under conditions of risk or uncertainty because properly used, you avoid making bad decisions based on invalid assumptions, inadequate analysis or poor logic. A 2 x 2 matrix is a simple chart or model that looks at two related factors; one on a horizontal axis, one on a vertical axis. The result is 4 quadrants that represent 4 “states”. For example, the classic “win win scenario” comes from plotting “win” on one axis and “lose” on the other. The four possibilities (quadrants) are therefore lose-lose, lose-win, win-lose, and win-win. But do not be fooled by its simplicity. Like an iceberg, when you look at what is not in plain sight, a 2 x 2 matrix is vastly more powerful than you might think at first glance. It is particularly useful in framing trade-offs and in defining possible areas of focus and action, and creating a sound basis for decision-making. The authors explain it best. "It is the underlying dynamic structure of 2 x 2 modeling that brings richness, depth and a uniquely transformational power to this simple form. There is a right and wrong way to construct a 2 x 2 matrix, and the key lies in how the prime factors are selected and applied. Successful application is dependent on sound 2 x 2 Thinking. 2 x 2 Thinking is open as opposed to closed, proactive, and drawn towards inherent conflicts in search of resolution. The very best instances of problem-solving share a number of characteristics which comprise the core of 2 x 2 Thinking. The following seven points illustrate this more fully: 2 x 2 Thinking leads to an open exploration of issues to unearth inherent tensions; these tensions exist within an evolving context, where focus shifts as old points are resolved and new tensions emerge. 2 x 2 thinkers recognize the importance of learning as both a condition for change and a key enabler; learning involves embracing the new and letting go of unhelpful and invalid views. 2 x 2 Thinking is often but not necessarily interpersonal; where others are involved, dialogue is rich, informative and honest. 2 x 2 thinkers move towards not away from complexity; the act of focusing on a core set of variables does not reduce or simplify analysis - it enriches it. 2 x 2 Thinking requires openness leading to rapid modeling and reframing; problems are re-considered, and underlying assumptions are vigorously challenged. 2 x 2 thinkers are drawn to seeing both sides of an issue; this often leads to paradoxical situations which are explored rather than denied or ignored. 2 x 2 thinkers simplify to intensify focus; confusion is replaced by a core dilemma that holds the key to deeper meaning and more informed choices." Manage Dilemmas, Not Problems" is one of the mantras of the authors, and the model provides an excellent framework to analyze a number of business situations where the objective is to resolve tensions and conflicts in objectives. The authors note that problems can be dealt with simply, but dilemmas are major challenges that resist quick fixes. Profit versus Growth, Cost versus Benefit and Urgency versus Importance are three basic examples of common “either or” dilemmas that can represent great danger or opportunity. Lowy and Hood gathered and studied some three hundred of these models and present a selection of 55 of the best models, and set out to show readers how to develop their own models. The book is also sprinkled with much real life experience that illustrates these models in action so you get a real sense of how powerful the analysis is, and how it can help break a logjam in thinking to release a torrent of creative ideas and alternatives. They chronicle a consulting engagement with Fujitsu that saw a revised strategy created that literally turned a money losing activity into a hugely profitable enterprise by simply stressing and embracing some very positive aspects and strengths, and letting go of some out dated thinking. I suspect everyone with some business experience, and certainly business students, has come across at least one or two of these models, and the Importance vs Urgency model is familiar to everyone who read Steven Covey’s best selling The 7 Habits of Highly Effective People, but I suspect they will find some gems among this treasure. The beauty of this book is that you can put it to work right away! The models are clearly described and organized as Strategic Frameworks, Organizational Frameworks, and Individual Frameworks, and contain the necessary information to begin looking at your own situation. Customer Value Analysis, Global Product Planning, SWOT Analysis, Means and Ends, Differentiation and Integration, Make versus Buy, and Product and Supply Chain Architecture are but a few of the models looked at. To underscore the importance of this work, Alex Lowy is set to teach a course at the McMaster’s DeGroote business school beginning in September using material from The Power of the 2 x 2 Matrix as the course's core content. In addition, the book has reached several best seller lists and won many important fans as noted in the book‘s opening pages. Now add me to this list as well. I believe this book is destined to be reprinted for many years to come and become a classic book for consultants, business operators, and academics. So get it now before the first edition is gone. The Power of the 2 x 2 Matrix Alex Lowy and Phil Hood Published 2004 by Jossey-Bass John Wiley & Sons ISBN 0-7879-7292-4 © 2007 John B Voorpostel CA www.iaccountant.ca
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