Using the 9-Box Grid for Talent Management, Resource Allocation, and Succession Planning
In business, choosing the right tool is never enough. You have to understand why and how you’re using it.
The 9-Box Grid can be a simple and effective tool for identifying where current performance (x-axis) meets future potential (y-axis) in various aspects of your company. But CEOs also have to be aware of the limitations of this matrix as they connect its conclusions to their overall strategy for the company.
Here are four common applications for a 9-Box Grid, as well as potential analytical weaknesses.
1. Identify and Assess Talent
Plotting an employee on CEO Coaching International’s color-coded 9-Box Grid could bring their place in your company into sharp focus.
Pay particular attention to anyone who falls into the diagonal band of green-yellow. These are typically the employees who will benefit the most from more training, mentorship, or coaching. If the CEO and team leaders can nudge these employees into upper-right green squares with the other superstars, you’ll improve productivity in the short term while also nurturing potential long-term leaders.
Workers who fall in the brown-red Low-Moderate squares probably need to have a serious conversation with their direct supervisors, and perhaps the CEO. Be clear and direct about what needs to improve, and offer whatever support you can to help them realize their potential.
As for the Low-Lows, well, that box is red for a reason. Give them the same honest assessment and support you give to higher-charting employees. But after a month or two in the red, it’s time to ask why this person is still working for you.
We coach hundreds of CEOs all over the world. Not one has ever told us they fired a low performer too soon. Many regret waiting too long to do what needed to be done, especially once they hired a superior replacement who immediately upgraded culture, productivity, and potential.
2. Maximize Resource Allocation
Cash is king, and when it’s plotted in a 9-Box Grid, green is good.
You can replace “Performance” on the x-axis with “Profit” and now you can plot your products, services, divisions, marketing programs, or any other measurable thing on the 9-box grid.
Ideally, your daily, weekly, monthly, and quarterly processes should all be driving up the KPIs that are most essential to your company’s fiscal health. The greener this version of the matrix, the more cash you’ll have on hand, the quicker you’ll get paid, and the more immediate the return will be on key investments into the company. That includes raises, bonuses, and promotions to retain your top talent, and writing a BIG check to hook that rock star exec you’ve been trying to hire for years.
In the reddish boxes, you’ll likely find products that aren’t selling anymore, satellite stores or offices that aren’t profitable, or a marketing plan that just isn’t catching the public’s attention. If investing more in these boxes won’t turn them green, then accept defeat, learn, and move on.
3. Optimize Team-Building
Plotting multiple employees on the same 9-Box Grid can give team leaders a good starting point for assessing a team’s strengths and weaknesses.
An abundance of green might seem like a good thing. But are you dedicating too many of your best people to one task? Are a group of high performers going to bring out the best of each other, or breed counterproductive competition? Are the team’s skills complementary or redundant? Could matching a few of your best people with high potential inspire a boost in productivity that sparks untapped performance?
It can also be useful for the CEO and other executives to ask department leaders to plot all of their direct reports on one 9-Box Grid. You may discover inconsistencies in how various teams are evaluating talent and how they are enforcing accountability. Standardize these processes so that the company performs more consistently and so that employees all feel like they’re on a level playing field.
4. Plan for Succession
If you were going to sell your company at the end of the year, would anyone want to buy it?
What would it be worth?
How could you drive up that valuation?
Believe it or not, one day you’re going to move on from this company. That goal might be retirement. It might be the BIG job at another company. Or it might be a nine-figure exit. Keep your company in the best possible position now, and you’ll have a heck of a lot less work to do when the time comes.
Plot all of your company’s assets and liabilities on one 9-Box Grid. Many CEOs who perform this exercise are surprised by how long they’ve let consistent profitability gloss over mediocre talent, a lack of innovation in products and services, or an overreliance on a small group of customers.
Even if you aren’t planning to step away soon, use your upcoming annual planning session to establish actionable steps that will move more of your company into the green zones of your 9-Box Grid. There’s a high likelihood that many of these improvements will be tied to KPIs that are going to affect your growth targets for next year as well.
One BIG bold dot that every CEO should have in the top-right green square is a successor. Even if retirement isn’t on your radar, life happens. Who’s going to take over if you develop an illness? How are you helping that person develop the leadership skills they’ll need to fill your shoes?
And if you do get to leave on your terms? Some of the BIGGEST companies in the world have botched leadership transitions. Think BIG and do better.
See the BIG Picture
When you’re holding a hammer, everything looks like a nail.
And a CEO who’s too reliant on a 9-Box Grid — or any one tool — risks viewing their people and processes in a very narrow way.
For example, some of your most creative workers might land in reddish quadrants because, by some measures, their productivity might be “low.” But is that employee lazy? Or is she methodically working through an innovation that, given time, patience, and resources, will ramp up company-wide productivity?
The rigidity of a matrix might also lock the CEO into a specific way of thinking or analyzing. Faced with 9 possible outcomes, choices, grades, or solutions, the CEO might simply check the box that agrees with their preconceptions and fails to challenge their assumptions. In this way, the 9-Box Grid might reinforce blind spots rather than help the CEO see them.
It might also be worth asking, “What’s outside the box?” A top-right, green-green revenue stream might not seem like an ideal source of extra investment — it’s already in the optimal box! But where could that initiative take your company if you poured even more fuel onto the fire?
Your company, your people, and your ultimate goals are much BIGGER than any one grid. No matter what tool, technique, or philosophy you use to analyze your business, remember that the first answer is almost always too simple. Before firing, hiring, or recalibrating, take in all the data. Reflect on your vision and your own performance. Run your thinking past your leadership team, mentor, or CEO coach.
And then, commit to the decisions that will Make BIG Happen on the chart that matters most: the one measuring your company’s growth and profitability.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 53.5% during their time as a client, more than three times the U.S. average, and a revenue CAGR of 26.2%, nearly twice the U.S. average.
Learn more about executive coaching | Meet our world-class coaches
