How to Use the Payoff Matrix to Prioritize Solutions

Are you new to the Process Improvement role?

Do you want to learn some tips from a Master Black Belt with over 20 years of experience?

In this article, I’m going to show you how to use a simple tool to prioritize the improvements generated from the Improve phase of your Lean Six Sigma project. The tool is called a Payoff Matrix and it helps prioritize your improvements according to their benefit if implemented and the resources needed to implement.

Below is an example of a completed Payoff Matrix:

Before we can prioritize improvements …

Before we can prioritize the improvements, we must make a comprehensive list of the improvements. These improvements must be actionable items that mitigate the root causes that you uncovered in the analyze phase.  Actionable items are problems that we can implement a tangible fix.

Below is an example of an improvement list written on a flip chart during a Lean Six Sigma project team meeting:

Setting the Stage for Improvement Prioritization

Before we can prioritize the improvements, we need to draw the the Payoff Matrix. I like to draw the Payoff Matrix on a flip chart to get engagement from the whole team.

Let me take you through the steps to drawing the Payoff Matrix:

Step #1, With a blue marker draw cross-hairs in the middle of the flip chart (like the one pictured below)

Step #2, With a red marker, draw cross-hairs in each of the four sections (like the one pictured below)

Step #3, Along the X axis draw the Low to High Resource line. Along the Y axis draw the Low to High Benefit line (like the one pictured below)

Now that the Stage is Set we can start Prioritizing Improvements 

Now that we have drawn the Payoff Matrix, we can start populating and prioritizing improvements. Use your teams list of improvements. Start with improvement #1. Place the #1 on the payoff matrix according to the benefit of implementing the improvement and the amount of resource to implement. Move on improvement #2, #3, etc.

What is the Meaning of the Four Quadrants?

• “Quick Win” Quadrant: These are improvements that are easy to implement and have a relatively high benefit. This is the quadrant that should be the priority when implementing Lean Six Sigma project improvements.
• “Filler” Improvements: The improvements in this quadrant will individually have less effect but cumulatively could have a large effect.
• Do we have the Time and Money?: The improvements in this quadrant are costly in time and/or expense. These improvements are were we have to evaluate the risk of giving up the resources and the reward gained.
• “Kill It”: The improvements in this quadrant have little effect and are costly. These improvements are either tabled or we can decide they are not worth pursuing.

Below is an example of a Payoff Matrix on a flip chart:

What did you think? Did this article help you and your team to effectively prioritize your solutions? Please share your thoughts in the comments below.

About the Author, Kevin Clay, President & CEO of Six Sigma Development Solutions, Inc.

Kevin Clay is a Six Sigma Master Black Belt and a Lean Master Practitioner. Kevin brings over 20 years of operational experience into the classroom. He has a wide range of Lean and Six Sigma project experience in industries such as manufacturing, food processing, residential and commercial construction, insurance, banking, healthcare, etc.

Kevin has taught Public Lean Six Sigma Green Belt and Lean Six Sigma Black Belt Certification Training courses all over the world. Some of the locations he currently teaches are: Albuquerque, New Mexico | Anchorage, Alaska | Atlanta, Georgia | Austin, Texas | Boston, Massachusetts | Calgary, Canada | Charlotte, North Carolina | Chicago, Illinois | Cincinnati, Ohio | Cleveland, Ohio | Columbus, Ohio | Dallas, Texas | Denver, Colorado | Detroit, Michigan | Dubai, UAE | El Paso, Texas | Fort Smith, Arkansas | Honolulu, Hawaii | Houston, Texas | Indianapolis, Indiana | Jacksonville, Florida | Kansas City, Missouri | Las Vegas, Nevada | London, England | Los Angeles, California | Louisville, Kentucky | Memphis, Tennessee | Mexico City, Mexico | Milwaukee, Wisconsin | Minneapolis, Minnesota | Montreal, Canada | Nashville, Tennessee | New Orleans, Louisiana | New York City, New York | Northwest Arkansas | Orlando, Florida | Philadelphia, Pennsylvania | Phoenix, Arizona | Pittsburgh, Pennsylvania | Portland, Oregon | Raleigh, North Carolina | Salt Lake City, Utah | San Diego, California | Seattle, Washington | St. Louis, Missouri | Tampa, Florida | Toronto, Canada | Vancouver, Canada | Washington, DC

Kevin also works with many organizations onsite at their facilities to provide Operational Excellence to these companies all over the globe.

One of Kevin’s favorite courses to teach is the Lean Six Sigma Yellow Belt course because it gets everyone in the organization engaged in simple root cause analysis and bring many small rapid improvements to the organization. 

One of Kevin’s favorite quotes is:

"The master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his information and his recreation, his love and his religion. He hardly knows which is which. He simply pursues his vision of excellence at whatever he does, leaving others to decide whether he is working or playing. To him he's always doing both." -Zen Buddhist

You can contact the Author Kevin Clay of at kclay@sixsigmadsi.com or 479-739-4940