6 MIN READ
Personal Ansoff Matrix
Gauging Risk in Your Career Decisions
Do you have a burning ambition to try something different?
It's not unusual, these days, to have more than one career. In fact, according to the U.S. Department of Labor, the average American has at least 11 jobs between the ages of 18 and 46.
Famously, Jerry Springer, Martha Stewart and Arnold Schwarzenegger all took a chance, and gave up successful careers to do something dramatically different – and struck gold! But, for every success story, there are many more who didn't quite make it.
So, before you take the plunge, it's a good idea to take a moment to investigate your options and their associated risks. This article explores a career-related use of the Ansoff Matrix, which helps you to assess those risks and take some of the guesswork out of planning your career.
About the Tool
The Ansoff Matrix was first published in the Harvard Business Review as early as 1957. It is a strategic planning tool developed by mathematician H. Igor Ansoff to help organizations assess the risks of adopting a particular strategy. It highlights four ways a business can grow, and helps you to think about the risks inherent in each of them.
With a little adjustment, you can also use the matrix to think about your career. The amended model shown in figure 1 below outlines four possible career choices: Expert Development, Functional Skills Development, Industry Transfer, and Retraining.
Figure 1: The Ansoff Matrix – Career
The Personal Ansoff Matrix helps you to assess risks by providing a framework that you can map your options against. Starting at Expert Development, the risk of each choice increases as you move either horizontally or vertically through the matrix.
Expert Development is a relatively low-risk option because you're simply Building Expertise in your current role, while Functional Skills Development, in the lower-right-hand quadrant, has a higher risk, as you're shifting functions and learning new skills to apply to a new role in your existing organization.
Industry Transfer also presents a risk, because it involves applying your current skills to a new industry. Retraining represents the highest risk of all, because you're entering a new industry and building entirely new skills, and you can't take advantage of previous knowledge and experience.
Using the Ansoff Matrix to analyze your career choices improves your understanding of the risks associated with each option. This helps you think about these risks, develop a plan for dealing with them, and make the best choice for your situation.
Let's see it in action:
Andrea is an accountant. Her present employer is planning on downsizing several departments and she is concerned that finance might be one of them. She is considering changing industries and is looking for a position in an environmental agency.
Andrea risks being laid off if she stays in her present job, and moving to a new industry sounds exciting. She plots her two options on the Ansoff Matrix: 1) stay where she is, and 2) transfer industries. Then, she brainstorms the risks associated with each choice.
Moving industries definitely presents a higher risk. While Andrea's experience of managing budgets and supervising a small team has given her plenty of transferable skills, she knows little about the financial management of non-profit organizations, and she would probably have to take a lower grade – at least in the beginning.
After thinking about it carefully, she decides to stay with her current organization. However, she also decides to start volunteering at an international development charity in her spare time. The experience would strengthen her application if she did lose her job further down the line, and it would also give her a greater breadth of experience, which could make her more valuable to her present employer.
How to Use the Tool
Follow the three-step guide below to analyze the risks associated with particular career decisions with the Ansoff Matrix.
Step 1: List Your Options
Start by making a list of the career options you're considering. Then, conduct a PEST Analysis or SWOT Analysis to make sure you've fully explored them. Our article on Identifying Career Opportunities has tips and strategies that can help you explore all your options.
Step 2: Download the Worksheet
Download our Personal Ansoff Matrix template. Plot the options you're considering on it.
Step 3: Analyze and Mitigate Risks
Look carefully at the matrix. Which of your options presents the most risk? Which is the safest one?
Once you have a better idea of the risks, draw up a contingency plan to manage the ones you're most likely to face.
Now stop and reflect upon how you feel about each option. Which one appeals to you most? Is it worth the risk?
If you're having trouble weighing risk versus reward, tools like Decision Trees, Paired Comparison Analysis or Decision Matrix Analysis can help you identify which option is best for your situation. Additionally, our article 'Cautious' or 'Courageous' can help you better understand your propensity for risk.
The Ansoff Matrix was originally developed to provide organizations with a quick and easy way to assess the level of risk of different growth options. It can also help you analyze the level of risk associated with different career decisions.
The matrix has four quadrants: Expert Development, Functional Skills Development, Industry Transfer, and Retraining.
To use it, make a list of the career decisions you're considering, and put them into the appropriate quadrants. Next, look at each one carefully, and make a list of the specific risks it presents. Then weigh up risk vs. reward to make your decision.
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