If when placed on the matrix, the project turns out to be a drive, then the project is to be cherished. If the project is placed as a drain, it should be discarded.
This should only occur if the projects have been classified correctly in a sound framework. Core competencies have to be clearly understood and mission stated with clarity.
If a project is determined to be a distraction or dilution, this is more problematic as they lack a fit on one of the dimensions and at first sight they should be discarded to prevent long term damage. There is the temptation to do nothing about projects falling in these two quadrants because:
1. Although they are not perfect, they do have a fit on one of the dimensions and either help fulfil the mission or they use and strengthen the core competencies.
If there is a fit with mission (Dilutions) firms often continue with the project although it doesn’t utilise the core competencies and when this happens there is a neglect of the required competence and it will eventually stop making a contribution to the mission.
If the project builds and relies on core competencies (Distractions) but doesn’t fit the mission of the firm, then there will be a distraction of management from the central purpose, concentration will be taken away from the focus and the firm will lose its competitive edge.
2. Many distractions and dilutions make a significant contribution to turnover or profit. Firms in this position often ignore the fact that the project does not have a fit with the mission or with the core competencies.
3. Projects falling in these quadrants often get support from people within or without the firm who have a vested interest in their continuation. Distractions often get support from those people who are experts in the core competence and who derive esteem and recognition from their position – they rarely see that there is no fit with the mission and they often have a very strong voice in the organisation.
Distractions and Dilutions must be turned into Drives.
If this occurred, there would be no likely loss of strength in discarding or rejecting the project and the short-term financial gains would be achieved without damaging the strategy in the future.
There are two ways to convert a distraction or diversion into a drive.
1. The project could be developed in some way so that it overcomes its lack of fit regarding the mission or the core competencies.
If the project is a distraction (lacking fit on the mission) it could be separated out into a different distinct subsidiary, which could then have its own mission without distracting from the parent unit. The important factor is that time is given to assess the project. If it grows and does well, the original mission of the organisation may have to be modified to incorporate it, but if it remains a distraction it can be sold off.
If the project is a dilution and fits the mission but does not strengthen the core competencies, an organisation will often continue to back it. It must be converted to a drive. One way of doing this would be by joint venture or some other type of alliance where the partner supplies the core competencies. A new product can be pursued by involving research and consultants to gain core competence in the area that is missing.
2. The framework of the matrix could be modified so that the lack of fit on the missing dimension is overcome.
If a project fits the core competencies but not the mission – the mission must be closely analysed. It sometimes happens that the mission needs to be modified. If the competence is really core then a product that depends on it ought to fit the mission.
Likewise if a project has a fit with the mission but is not using the core competencies, the definition of the core competencies should be examined. Competencies should be core if they permit a project using them to contribute profitably to fulfilling the mission. If they are not, then is the mission correct?
These examples demonstrate how, by using the MCC matrix, an organisation is forced to examine the definitions of core competence and mission. If they are properly defined and analysed then there is a natural synergy between the two but if they are not – the positioning of projects on the matrix will pick this up.