Five Lessons from the Pay-Off Matrix

When there is simply too much to do and I’m at risk of mismanaging my priorities, I create a quick pay-off matrix.

At its most basic, a pay-off matrix helps prioritize everything on your plate by forcing you to answer this question:

What’s the highest, best use of my time and resources.

Or alternatively:

Which activities will have the greatest impact on achieving our vision?

As you can see in the diagram, a basic matrix is four quadrants—numbered 1-4:

• Quadrant 1: Activities that are relatively easy to accomplish and have a great impact on organizational success
• Quadrant 2: Activities that are more difficult to accomplish but also have a great impact on organizational success
• Quadrant 3: Activities that are relatively easy to accomplish but have less impact on organizational success
• Quadrant 4: Activities that are more difficult to accomplish but have less impact on organizational success

In the lower right corner of the matrix you’ll see the addition of a fifth “quadrant” that represents the parking garage (hence the “P”). The parking garage contains important things I don’t want to forget but can’t, for a number of reasons (time, budget), address right now. I have “parked” them for later consideration.

In the 25+ years I have been using the matrix I have learned key lessons about using the pay-off matrix. Here are the five most important:

1. Limit the total number of major initiatives to four or five and make sure all are located on the matrix, preferably Quadrants 1 or 2.
2. Have no more than 1 or 2 Quadrant 3 activities.
3. Don’t put anything in Quadrant 4.
4. When a new initiative is added, consider what initiative(s) must be dropped.
5. Regularly review the parking garage. Changing circumstances might mean that some of those activities can be added to Quadrants 1 or 2.

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