Management Decision

The MCC decision matrix:: a tool for applying strategic logic to everyday activity
John Nicholls,
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 4 MANAGEMENT DECISION 33,6
The MCC decision matrix:
a tool for applying strategic logic to everyday activity
John Nicholls
After the death of the BCG portfolio matrix the search is on for a new strategic theory
Introduction
In his latest book[1], Mintzberg has pronounced the death
of strategy. Or, more precisely, the death of formalistic,
top-down, regimented strategy making the sort
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represented by that archetypical grand panacea, the
Boston Consulting Group (BCG) portfolio matrix. No
doubt he is right about that. But strategic theory has
moved on since then. Would it not be better to up-date our
tools rather than throw away the whole tool box? In spite
of its limitations and failures, the search for strategic
theory over the last 30 years has been a noble quest,
driven by a belief that it is better to understand what you
are doing than fly by the seat of your pants.
Occasionally, it is indeed possible for firms to hit a
spectacular jackpot without really knowing what they
are doing or having any idea how to achieve long-term
success in their industry. Alan Sugars trading instincts,
for example, took him from flogging car aerials to the
bonanza of word processors for the masses. But then the
seat of his pants began to lose its magic! For all its initial,
opportunistic success, the instinctive exploiting of
opportunities inevitably runs out of steam. Openings
become less obvious; the dynamics of the industry more
complex; competition more intense. In the long run, it is
the organizations that know the most about their
business and act on the knowledge which do the best.
This belief in the superiority of fundamental
understanding over the instinctive exploiting of
opportunities has driven efforts to develop strategic
theory since Ansoff[2] started it off in the 1960s. The path
has been rocky, full of false dawns and exaggerated
expectations. We now realize that understanding can
never be perfect; the world is too fast-changing and messy.
What is more, thinking can never be allowed to become
too far divorced from acting. Strategy formulation and
strategy implementation must be closely interwoven.
Mintzberg has a point. There is a lot we have done wrong.
However, the need for tools to aid strategic decisions will
always exist. For all its faults, the BCG portfolio matrix
attempted to answer a problem that is still with us.
Management Decision, Vol. 33 No. 6, 1995, pp. 4-10. MCB University Press
Limited, 0025-1747
Organizations still have to decide how to allocate their
scarce resources among a number of competing claims.
They have to decide where to concentrate their efforts; to
decide what is important and what is not.
The BCG matrix attempted to answer this question by
looking at the fruits of the organizational tree at its
products and the markets to which they are directed.
Product/market considerations were also the primary
basis for identifying strategic business units (SBUs)
representing branches of the tree.
We now recognize that this was too narrow a perspective.
Modern strategic theory suggests we look at the whole
tree, rather than at its fruits alone. We then get, as shown
in Figure 1, a much richer picture. Supporting the
branches, which bear the fruit, is a trunk of core
processes which are, in turn, fed by the roots of core
competences[3]. It is this underlying technical and
organizational expertise which feeds the organizations
ability to be fruitful with attractive products.
This holistic way of thinking carries strategic theory past
many of its former deficiencies. Rather than being dead,
strategy is in the process of rebirth at a more
fundamental level of understanding. Mintzberg, himself,
recognizes this when he writes:
The outcome of strategic thinking is an integrated
perspective of the enterprisestrategy making is a process
interwoven with all that it takes to manage an
organization[3, p. 108].
This integrated perspective of the enterprise is
obtained by looking at the whole tree from its roots up,
rather than at its fruits alone. Looking at the organization
as a tree helps us to see the importance of the roots in
feeding the fruit i.e. the importance of core competences
in producing goods and services.
Incidentally, there is some debate at the moment about the
relative importance of core competences as distinguished
from capabilities[4]. This distinction between capability
and the core competences that underlie processes is a fine
one and difficult to pin down. However, since capabilities
have been defined as a set of business processes
strategically understood (Stalk et al.[4]), they can be
equated to the core processes of the trunk of the tree.
 THE MCC DECISION MATRIX: A TOOL FOR APPLYING STRATEGIC LOGIC TO EVERYDAY ACTIVITY
Figure 1. The organization viewed as a tree
D U
O C
R T
P
Strategic
business
units
CP
OR
RO
EC
E such claims on resources will be referred to here, simply,
S
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S as projects as distinguished from products.
E
S
Core competences
Still unexplained, however, is what makes the tree grow
in the first place. This is to do with the richness of the soil
the values that feed the organization. It is to do with the
life force that animates the growth and shapes it as
expressed in the vision or mission statement[5]. The
importance of vision and values, as expressed in the
mission statement, is an essential part of our modern
view of strategy.
Both mission and core competences appear as two of the
five points of the strategic leadership star, described
elsewhere[6]. The star is an overall guide to the
management of any organization in achieving its
fundamental purpose of delivering value to the
customer[7]. Although it is only part of the star, however,
the tree analogy is sufficient for our purposes here. The
tree analogy emphasizes the importance of the roots (core
competences) and soil (the vision and values of the
mission) in sustaining the proliferation of fruit (products
and markets).
The MCC portfolio matrix
As we have seen above, thinking of an organization as a
tree helps wean us from looking at strategy solely in
terms of products and markets using them as the sole
guide to resource allocation. Going beyond the BCG
portfolio, modern strategic thinking, as represented by
the tree analogy, suggests that scarce resources should
support the life force of the organization by feeding the
roots and enriching the soil. In other words, they should
be allocated to activities which strengthen the core
competences and help to achieve the mission.
5
Using these two dimensions as axes, a modern portfolio
decision matrix can be devised as a tool for allocating
resources strategically. The two axes serve both to define
the matrix and give it its name the mission and core
competences (MCC) portfolio decision matrix. As can be
seen in Figure 2, the MCC decision matrix has mission on
the vertical axis and core competences on the horizontal.
Once defined, each axis is simply divided into two halves,
representing good and poor fit.
Unlike the BCG matrix, the MCC matrix can give
guidance on the relative merits of any claim on resources,
not only those associated with competing product/market
segments or SBUs. These claims might, for example, be
investments in research, the development of new
technology or some training initiatives. For convenience,
Any claim on resources, be it a product or project, is
located on the MCC matrix by answering two questions:
(1) How well does it fit with, and help achieve, the
firms mission?
(2) How well does it use and further develop the firms
core competences?
Since both axes depend on subjective thinking and
analysis, the construction of the MCC matrix for a given
organization depends on the way it sees itself how it
defines its mission and how it analyses its core
competences. This provides a two-way benefit in using
the matrix. Not only is the suitability of products and/or
projects assessed against the matrix, but also the
assessment can challenge the validity of the matrix itself.
Thus, use of the matrix stimulates an in-depth
assessment of strategy by simultaneously assessing
products and projects, while verifying the validity of the
basic assumptions against which they are tested.
Perhaps the biggest advantage of the MCC matrix is that
it can be used for strategic assessment at any level within
Figure 2. The MCC portfolio decision matrix
Good
Fit with mission
Poor
Poor Good
Fit with core competences
 6 MANAGEMENT DECISION 33,6
an organization. Unlike the BCG matrix, it is not confined
to assessing claims on resources at the overall enterprise
or SBU level, but can be a useful decision-making tool for
divisions, departments or even smaller units. As long as a
distinct mission can be determined and core competences
recognized, an MCC matrix can be constructed. This
means it can find a use in virtually any organizational
sub-unit.
This makes it a powerful tool for transforming leadership
in depth[8]. Any sub-unit that has defined its mission and
identified its core competences can use the MCC matrix as
a practical tool to guide its development efforts. In
this way, strategic thinking can be brought to bear
throughout an organization.
In summary, the MCC decision matrix has three merits as
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a strategic tool when allocating resources:
(1) It looks at the fundamental health of the entire
organizational tree by linking the organizations
mission and its core competences when making
strategic decisions.
(2) Its very use helps to challenge and refine the
assumptions behind the definition of mission and
identification of core competences.
(3) It can be used for strategic assessment by any
organizational sub-unit that is able to define its
mission and identify its core competences.
Thus, the regular use of the MCC matrix as a diagnostic
and decision-making tool will, simultaneously, help apply
strategic thinking to resource-allocation decisions,
continuously refine the quality of the strategic thinking
and make sure that it is applied, as appropriate, at every
level within the organization.
The four quadrants of the MCC matrix
To make the MCC matrix a useful working tool, the
implications for claims falling in each of the four
quadrants must be identified. To do this, the four
quadrants are named and defined as shown in Figure 3.
Products or projects which fall in the upper right
quadrant of the matrix are called drives their fit is
high with both the mission and the core competences. In
this quadrant, resources are being devoted to things that
have strategic synergy in driving the organization
forward. They should be cherished.
By contrast, products or projects which fall in the lower
left quadrant meet neither criterion and are called
drains. Although they may often produce attractive
short-term results, they are a drain on the organizations
long-term strategic strength. They are candidates for
elimination.
Products or projects which fall into the other two
quadrants are not so clear cut; they meet one criterion but
not the other. Their potential in meeting one criterion
stops them being straight drains. Nor, however, are they
Figure 3. The four quadrants of the MCC decision matrix
Good Dilution Drive
Fit with mission
Poor Drain Distraction
Poor Good
Fit with core competences
proper drives. Their names have been chosen to indicate
the potential damage that they do by being strategically
sub-optimal.
Products or projects in the bottom right quadrant are
called distractions they depend on the core
competences but do not fit the mission. They are
attractive because they use current skills but, if the
mission is correctly defined, are dangerously distracting
from the central purpose.
Products or projects in the top left quadrant are called
dilutions they fit the mission but do not draw on, or
further develop, the core competences as currently
defined. They are attractive because they help fulfil the
mission but, if retained, they dilute the necessary
concentration on the core competences.
Using the MCC matrix to assess specific claims
on resources
When using the MCC decision matrix, a product or project
is assessed for its degree of fit, good or poor, with the
mission and the core competences. It is then placed in the
appropriate quadrant of the matrix. If it is a drive, it is to
be cherished. If it is a drain, it is to be discarded. The
appropriate action in these cases is clear and, subject to
some caveats examined later, there is no problem.
Distractions and dilutions are more problematic. At first
sight, they ought to be discarded/rejected on principle,
Their lack of fit on one dimension means they are
strategically sub-optimal and, thus, a potential source of
long-term damage. To keep them is, in fact, a deadly trap.
There are, however, three powerful sources of temptation
to do nothing and just accept a distraction/dilution. These
sources of temptation are:
(1) Although not perfect as drives, distractions/
dilutions help on the one dimension where they do
 THE MCC DECISION MATRIX: A TOOL FOR APPLYING STRATEGIC LOGIC TO EVERYDAY ACTIVITY
fit. At least, either they help to fulfil the mission or
they use and strengthen the core competences.
(2) Many of them also make a significant contribution
to turnover and/or profit.
(3) Regardless of everything else, they very often
receive substantial support from people who have
a vested interest in their continuation.
Taking the first temptation, what harm is there in doing
nothing and just accepting the benefit that comes from a
fit on one of the dimensions only? Let us look at the two
cases.
The argument in favour of accepting a distraction would
be that, since it builds on the core competences, why
worry that it does not help fulfil the mission? The danger
lies, of course, in the distraction of management effort
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from the central purpose. By losing concentration, the
focus becomes blurred, with the inevitable loss of
competitive edge.
Similarly, a dilution makes a contribution to fulfilment of
the mission. So, what is the harm in retaining it even if it
uses non-core competences? The damage comes, of
course, in the dilution of effort, as resources are
misapplied to building the non-core competence. But
what if one avoids the mistake of building up a non-core
competence? Then, the likelihood is that the effectiveness
of the dilution will decay from neglect of the required
competence and it will cease to make a contribution to the
mission.
So, we see that doing nothing and just accepting
distractions/dilutions has clear strategic penalties. But
what of the other two temptations?
Distractions often receive strong support from those
within the organization who are experts in the core
competence. They revel in exercising it and savour the
esteem that its possession brings, losing sight of the
ultimate mission being served. By virtue of their vital
expertise, they also tend to have a strong voice in the
decision making of the organization.
Dilutions, of course, often seem attractive simply because
they are contributing to fulfilment of the mission. They
may be filling a gap or completing a range of cover. These
arguments will be reinforced by those who have a vested
interest in the non-core competence used by the dilution
since it would otherwise not be valued.
These vested interests can be very powerful, especially if
backed by the second temptation. If the distraction/
dilution is making a significant contribution to turnover
and/or profit, it is tempting to ask the question, Does the
financial benefit that might be lost if it were
discarded/rejected outweigh the damage it might do if
kept? It is often difficult to say no.
7
So what is to be done if the financial benefit of the
distraction/dilution is very great or the arguments in
favour by the vested interests are very strong? Or what if,
as touched on above, the loss of potential strength by
discarding/rejecting is significant and ought to be
avoided? The pressure to do nothing can be almost
irresistible, in spite of the long-term penalties.
Rather than yielding to the temptation, however, the
correct response to this pressure is to answer a much
more basic and challenging question: How can a
distraction/dilution be converted into a drive? If this could
be done, there would be no loss of potential strength by
discarding/rejecting it, vested interests could be satisfied
and the short-term financial benefit could be reaped
without any long-term strategic damage.
Converting a distraction or dilution into a drive
A distraction or a dilution can be converted into a drive in
one of two ways:
(1) the product or project could be developed in some
way that overcomes its lack of fit on the missing
dimension;
(2) the framework of the matrix could be modified to
eliminate the lack of fit on the missing dimension.
The first of the two ways is somehow to overcome the
lack of fit so as to avoid distraction from the mission or
dilution of concentration on the core competences.
How might this be done for a distraction products or
projects that depend on the core competences but do not
fit the mission? How can they be allowed to continue
without a fatal distraction from the central mission? One
way might be to separate them off into a clearly distinct
subsidiary. This could then have its own mission without
distracting from the parents. This half-way house gives
time for the position to clarify. If the subsidiary prospers
and grows in importance, it may lead to an eventual
redefinition of the mission. If, on the other hand, it
remains a minor distraction it may be sold off in a
rationalization.
For innovative ideas that do not fit the mission,
organizations are experimenting with the idea of
intrapreneurs[9]. The opportunity is created for people to
pursue a passionate but unorthodox interest without
having to leave the organization and set up in
competition.
What could be done for dilutions products or
projects that fit the mission but do not strengthen the
core competences? How can they be allowed to
continue without diluting the organizations essential
strength by misapplying resources to the development
of non-core competences? One way would be to gain
access to the non-core competence via a joint venture
or other co-operative agreement. By this means, the
competence of a joint venture partner is used to help
 8 MANAGEMENT DECISION 33,6
fulfil the mission. In the very early stages of an
innovative idea that fits the mission, the missing
competence to pursue it may come by resorting to
contract research or using the expertise of consultants.
The second way of converting a distraction or a
dilution into a drive is to modify the framework to
eliminate the lack of fit on the missing dimension i.e.
distort the framework. This may sound like cheating
if something does not fit a framework, simply distort
the framework until it does fit! But what if the
framework has been poorly constructed in the first
place? This, in fact, is very likely to be the case. Let us
think about it.
Consider something that seems to be a distraction. This
could be a product that depends on what are deemed to be
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the core competences, and is making a profitable
contribution to the business, but does not fit the mission,
as defined. Is it not worth taking a look at the mission
statement to see why the product does not seem to fit? If,
on reflection, it really does not fit, what does that tell us
about our identification of the core competences? Surely,
if the competence is truly core, a product which depends
on it ought to fit the mission.
Similarly, consider something that seems to be a
dilution. This could be a product that is making a
profitable contribution, helping to fulfil the mission, but
is not tapping into the core competences. Is it not worth
looking at the definition of core competence? Almost by
definition, the competences must be core if they permit a
product to contribute profitably to fulfilling the mission.
If they really are not, then have we got the mission right?
These challenges to the framework illustrate the value
of the MCC matrix in making us examine our
definitions of mission and core competences. If they are
properly defined and analysed, there is a natural
synergy between these two. Any deficiencies in
definition and/or analysis will quickly be revealed
when using the matrix. This is the second of the three
benefits mentioned earlier. In addition to the primary
use of the matrix in making resource-allocation
decisions, it is valuable as a tool for overall strategic
review and refinement.
Discarding drains and cherishing drives
Earlier, it was stated rather categorically that drives
should be cherished and drains should be discarded. This
is true if we can be sure that the drives and drains have
been properly classified in a sound framework. Our
comfort that this is the case might be increased if we first
used the matrix to assess some distractions and dilutions
to see if this stimulated any challenge to the framework.
Such challenges to the framework deepen the
understanding of the synergy between mission and
core competences. The mission becomes stated with
more clarity and the core competences are analysed
more precisely. Over time, the stimulation from such
challenges helps to ensure that the matrix has been
properly constructed. Only after thoroughly checking
the framework should drives be accepted for
cherishing; only at this point should action be taken to
discard drains.
Using the matrix in this way would help in cherishing drives
that are truly worthy and avoiding the discard/rejection of
products/projects that might, superficially, appear to be
drains. This might avoid the unwise sacrifice by many major
firms of their core competences. Because they have not
properly understood their core competences, many firms
have allowed vital skills to be subcontracted or yielded up to
joint venture partners.
As noted by Prahalad and Hamel:
Too many companies have unwittingly surrendered core
competencies when they cut internal investment in what
they mistakenly thought were just cost centres
Outsourcing can provide a short-cut to a more competitive
product, but it typically contributes little to building the
people-embodied skills that are needed to sustain product
leadershipWhen it comes to core competencies, it is
difficult to get off the train, walk to the next station, and then
reboard[3, pp. 84/5].
In this respect, can it be right for GTE Sylvania no longer
to make semiconductors or for K-mart to contract out all
its distribution? Certainly, their major competitors have
done the opposite. Wal-Mart regards distribution as a
core competence and NEC has cherished semiconductors
while steadily overhauling GTE. Perhaps other decisions
would have been made if GTE and K-mart had used the
principles behind the MCC matrix to focus their strategic
thinking on the synergy between mission and core
competences, thus giving a deeper understanding of
both.
At a deeper level, the clarification of mission and core
competences which comes from use of the MCC decision
matrix as an everyday tool should assist in effecting the
paradigm shifts that are required to achieve
transformations. In this regard, Pascale[10] says that
strategic thinking:
...involves understanding the basic economics of a business:
identifying ones sources of competitive advantage, and
allocating resources to insure that ones distinctive
capabilities remain strong. But these are the tactical aspects
of strategy...strategys most important contribution is
searching for, and redefining, context (i.e. the business
paradigm). (italics in the original)
Relating the MCC decision matrix to this quote, one
might consider it to be purely tactical since the matrix
concentrates on applying the current understanding of
mission and core competences. As we have seen,
however, its regular use helps to relate a broad range of
daily decisions to the fundamental strategic parameters
 THE MCC DECISION MATRIX: A TOOL FOR APPLYING STRATEGIC LOGIC TO EVERYDAY ACTIVITY
of the matrix. This constantly challenges the
parameters, requiring their revision and formenting
shifts in the paradigm.
It is interesting to note that others are exploring the
strategic significance of relating mission to core
competences. In a recent article, Verdin and
Williamson[11] advocate basing strategy on a
combination of an inward look at core competences with
an outward look at the market. Although the MCC
decision matrix uses the mission to provide the outward
look, rather than using the market, the approaches are
clearly compatible.
More specifically, Tampoe[12] maintains that, in
assessing opportunities, one should put core
competences in context, particularly, with regard to the
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strategic intent of the firm. He goes on to say, the ability
of an organization to sustain profitable growth is derived
from converting its vision into reality by combining its
shared goals, its organizational motivation and its core
competence. These dimensions are, of course, precisely
those of the MCC matrix. Tampoe, in fact, cites core
competence of company and shared strategic direction
as the first two components of an equation for a firms
capacity for sustained profitable growth.
Finally, Wilson[13], when reporting on a survey of 50
corporations, notes a shift in planning responsibility
from staff to line managers and from corporate level to
business unit level. The MCC matrix is an ideal tool to
assist in this. Especially as its incorporation of mission
on one axis matches his finding that there is a growing
emphasis on organization and culture as critical
ingredients in the execution of strategy, while the other
axis matches his finding that core competences analysis
is the most mentioned strategic planning methodology.
Conclusion
Inspired by the BCG portfolio matrix, the MCC decision
matrix has been devised to help firms answer the same
basic question: How should we allocate scarce resources
between competing claims? The axes of the matrix reflect
the modern emphasis in strategic thinking on mission
and core competences rather than on products/markets.
Viewing the organization as a tree focuses on the life force
(mission) that feeds its roots (core competences) rather
than on the fruit alone (products/markets).
The matrix classifies any claim on resources (products or
projects) as a drive, drain, distraction or dilution. An
organization is strongest when all its resources are
devoted to drives and none to drains; in other words,
when everything it does helps to fulfil its mission while
using and strengthening the core competences.
The use of the MCC decision matrix is not confined to the
organization as a whole; it can be applied to any
recognizable sub-unit. As long as a mission can be
9
defined and core competences recognized, a unit can use
the matrix to assess claims made on its resources. Thus,
the MCC decision matrix is a powerful tool of
transforming leadership, facilitating the daily use of
strategic thinking at depth within the organization.
When using the matrix, products or projects are located
in one of four quadrants. Those which fit both the mission
and the core competences are called drives and are to be
cherished. Those which fit neither are called drains and
are to be discarded. Distractions fit the core competences
but distract from a sharp competitive focus because they
do not fit the mission. Dilutions fit the mission but dilute
concentration on the core competences because they do
not use or develop them.
Distractions and dilutions are to be avoided. As their
names imply, they either distract management attention
from the mission or dilute the strength of the core
competences. This long-term strategic damage outweighs
any financial contribution they may make and whatever
potential strength they may bring on the one dimension
of the matrix where there is a fit. These temptations to do
nothing and simply accept them are often supplemented
by pressure from those who have a vested interest in the
distractions or dilutions.
Whatever the temptation or pressure to do nothing and
tolerate distractions and/or dilutions, it should be
resisted. The correct way to deal with them, to preserve
their potential contribution with none of the penalty, is to
find some way to convert them into drives. This may be
achieved by developing them in some respect to provide
the fit on the missing dimension; or by adjusting the
matrix through redefinition of the mission or re-analysis
of the core competences.
The challenges to the matrix framework that may arise
when converting attractive distractions/dilutions into
drives are an important secondary benefit of using the
MCC decision matrix. Used regularly, it can greatly
strengthen the quality of strategic thinking in depth.
While making sure the current strategy is implemented
properly, it also causes a rethink and challenge to what
Pascale calls the context paradigm: how has the
mission been defined and the core competences
identified?
From a didactic point of view, the four quadrants of the
matrix are named with evocative words all beginning with
D: drive, drain, distraction, dilution. What is more, the
treatment of distractions/dilutions is characterized by four
words also beginning with D: rather than doing nothing,
distractions and dilutions should be discarded, unless they
can be developed in some way or the framework distorted
so that the claim qualifies as a drive.
For those who find the two-by-two matrix too stark, a
three-by-three directional policy matrix can be used as a
guide to action (see Figure A1 (Appendix)).
 10 MANAGEMENT DECISION 33,6

Overall, the MCC decision matrix is a powerful tool for
applying strategic logic to all types of resource-allocation
decisions throughout an organization. Its regular use
ensures that strategic thinking is applied to activity at
every level. What is more, the quality of that thinking is
continually improved as the matrix forces a constant
testing and revision of the strategic parameters on which
it is based.
References
1. Mintzberg, H., The fall and rise of strategic planning,
Harvard Business Review, January-February 1994.
2. Ansoff, H.I., Corporate Strategy, McGraw-Hill, New York,
NY, 1965.
3. Prahalad, C.K. and Hamel, G., The core competence of
the corporation, Harvard Business Review, May-June
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Appendix: an MCC directional policy matrix
For some tastes, the original BCG portfolio matrix was too
mechanistic and prescriptive. To overcome this the concept was
modified to a more qualitative, three-by-three, directional
policy matrix. The version developed by Shell[14] is one of the
earliest and best known.
It is easy to present the MCC matrix in the form of a directional
policy matrix. This has been done in Figure A1 using the ideas
developed above from use of the two-by two matrix. On each
axis, the degree of fit is determined as high, medium or low
permitting any claim on resources (product or project) to be
placed in one of the nine cells.
Locating a product or project in the directional policy matrix
gives a guide to the appropriate action. Every cell has an action.
The do-nothing option does not occur, for all the reasons
advanced earlier. Discarding is the action in the extreme only.

1990.
Everywhere else, some sort of development is suggested.
4. Stalk, G., Evans, P. and Schulman, L.E., Competing on
capabilities: the new rules of corporate strategy, The directional policy matrix, being less either/or, does not so
Harvard Business Review, March-April 1992. strongly provoke a challenge to the framework, inviting it to be
5. Campbell, A., Devine, M. and Young, D., A Sense of distorted to make a fit.
Mission, Financial Times/Pitman, London 1990.
6. Nicholls, J.R., The strategic leadership star: a guiding
light in delivering value to the customer, Strategic Figure A1. The MCC directional policy matrix
Direction, No. 105, July/August 1994.
7. Nicholls, J.R., Value to the customer, The TQM
Magazine, April 1990.
Look for a Develop by
8. Nicholls, J.R., The heart, head and hands of High
joint venture building the Cherish
transforming leadership, Leadership & Organization competence
Development Journal, Vol. 15 No. 6, 1994.
9. Pinchot, G.I., Intrapreneuring, Harper & Row, New York,
NY, 1985.
Fit with
10. Pascale, R.T., Managing on the Edge, Simon & Schuster, the Medium
Watch closely, Maintain but Allow pursuit
New York, NY, 1990. mission do not delay not by an
decision indefinitely "intrapreneur"
11. Verdin, P. and Williamson, P., Successful strategy: star-
gazing or self-examination?, European Management
Journal, Vol. 12 No. 1, March 1994.
12. Tampoe, M., Exploiting the core competencies of your Watch closely,
organization, Long Range Planning, Vol. 27 No. 4, Low Discard Separate into
do not delay a subsidiary
August 1994. decision
13. Wilson, I., Strategic planning isnt dead it changed,
Long Range Planning, Vol. 27 No. 4, August 1994.
Low Medium High
14. Hussey, D., Portfolio analysis: practical experience with
the DPM, Long Range Planning, Vol. 11 No. 4, 1978. Fit with core competences

John Nicholls is Senior Partner of John Nicholls Associates, Islip, Northamptonshire, UK.

Application questions
(1) Evaluate two or three present or past directional decisions for your organization using the MCC matrix.
(2) Is top-down, formalized strategy making dead?
(3) Map your organizations current portfolio of products/projects/business units using the directional policy matrix,
as shown in Figure A1. What indications can you draw?
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11
MANAGEMENT DECISION 33,6
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