What is the MacMillan Matrix
This strategy grid, developed by Dr. Ian MacMillan, is specifically designed to assist nonprofit organizations to formulate organizational strategies. There are three assumptions underlying this approach: the need for resources is essentially competitive and all agencies wanting to survive must acknowledge this dynamic given that resources are scarce, there is no room for direct duplication of services to a single constituency — this is wasteful and inefficient mediocre or low quality service to a large client population is less preferable to delivering higher quality services to a more focused population. These assumptions have implications that are difficult and painful for many organizations and individuals. It might mean terminating some programs to improve core services and competencies, giving programs and clients to more efficient, effective agencies, or competing aggressively with those programs that are less effective or efficient. MacMillan’s matrix examines four program dimensions that guide placement on the strategy grid and indicate implied strategies.
Alignment with Mission Statement: Services or programs that are not in alignment with the organizational mission, unable to draw on existing organizational skills or knowledge, unable to share resources, and/or unable to coordinate activities across programs should be divested.
Competitive Position: Competitive position addresses the degree to which the organization has a stronger capability and potential to fund the program and serve the client base than the competitive agencies.
Program Attractiveness: Program attractiveness is the complexity associated with managing a program. Programs that have low client resistance, a growing client base, easy exit barriers, and stable financial resources are considered simple or “easy to administer.”
Alternative Coverage: Alternative coverage is the number of other organizations attempting to deliver or succeeding in delivering a similar program in the same region to similar constituents.
The MacMillan Matrix provides ten cells in which to place programs that have been reviewed in terms of these four dimensions. Each cell is assigned a strategy that directs the future of the program (s) listed in the cell (e.g., aggressive competition, joint venture, orderly divestment, etc.).