The Decision Matrix Tool: When you’re faced with more complicated decisions, it’s not always easy to get it right first time. This article will help you make better decisions, so you can focus more on implementation and less on dealing with the sense of being stuck.
Sometimes we have to make decisions based on an array of options.
- Perhaps you need to choose between purchasing one IT system to another.
- Or between three candidates that could be great for your job vacancy.
- Or indeed, you have to choose between three different improvement projects to undertake this year. Which is the biggest bang for buck?
The list is endless… and so too are your options. It can be hard to make the right choice for you and your teams.
Quick Tips Before We Carry On
We need to keep our decision making fairly swift, so we can prevent over thinking… and so we can get things done.
Mulling over for too long introduces doubt and over-analysis. This then slows us down and prevents effective decision making.
It’s also important to follow a decision-making process as best we can. Something like the following will help:
Step 1: Stop giving yourself Analysis Paralysis.
Step 2: Don’t sleep on your decisions
Step 3: Look ahead: 10 minutes, 10 days, 10 months, 10 years – is this still a good decision?
Step 4: Write Your Problems Down
Step 5: Identify the pros and cons
Step 6: What happened before? Any reference to draw upon?
Step 7: Use your Close network for grounding
Step 8: Trust your gut (5 second rule)
For more on these steps, I’ve written an article to help you understand these 8 steps.
Keep it Simple…
That being said One of the most simplest but effective decision matrix tools is The Weighted Average Decision Matrix. This can help you quickly and easily compare different solutions and ideas – all within a couple of minutes.
It’s the simple and silent companion every leader should use to make informed and objective decisions… in a logical way, and which ticks most of our pointers above.
The Weighted Average Decision Matrix
This decision matrix tool can be hand drawn or used as a spreadsheet. (Download yours, here)
Here’s an example:
The Decision Grid is split into a number of columns:
- Question or Problem Statement – This is the thing you need to fix; the item you’re mulling over…
- Decision Making Factors – think of these as important, must have items that you’d like to measure your decision around
- Weighted Score – For each factor, you need to provide an individual score or weight. Not all factors are as important as each other. Some may be more important than others. By weighting each one, you can give them a heavy compound score, to help provide impact
- Options – this shows you the different options you’re comparing
- Total Score for Each Option – Allowing you to see the total score, based on the weighted scoring of each factor. The option with the biggest score, wins!
Here are the steps:
Decision Matrix Tool, Step 1: Be Clear with the Problem
Enter your decision or question in the decision box.
Be specific in your statement, so it’s clear what the question or problem is.
In our example, we’re contemplating whether to overhaul our old machine or purchase a new one, in view of improving production output.
Decision Matrix Tool, Step 2 – Decision Making Factors
Now we must brainstorm the selection criteria for our decisions.
In a nutshell, what are the factors that will help guide us to the right decision? Or, what things are critical success factors that we need to meet?
If you don’t know, brainstorm them with your team. Don’t create hundreds of factors. When you boil it down, you’ll normally find up to a handful of them.
In our example, the factors that would play a big impact in our decisions, are:
- How quickly can we make a return on the original investment? The faster the better!
- Customer delivery – How will each option have an impact on customer delivery performance?
- Cashflow – How will each option leave us in terms of cash in the bank, once we invested?
- Capability to deliver new products – In essence, the more the capability to increase the product range, the better – to aid future growth.
Decision Matrix Tool, Step 3 – Add the Options
Now it’s time to compare the different options available to us.
These are the solutions to the problems. They’re the things that we’re labouring on which to choose.
Add them in the Options row.
In our template, you can have several different options.
In our example, we’ve included two options:
- Whether we buy a new machine that we’ve already researched and identified, OR
- Overhaul the old machine. In other words, give it a complete strip down and refurbishment.
Decision Matrix Tool, Step 4 – Weight Each Decision Factor
Some factors will have more importance than others.
And for this reason, we need to create weighted scoring.
Start with the first decision factor and score it on a scale of 1 to 5.
If it’s high importance, score it a 5.
If it’s a low relative importance, rate it a 1….
And of course, anywhere in between.
Try not to give each decision factor the same weight, so score them in relation to each other and which are the more important (And less important, too).
If you find that the scores are all the same, broaden your weighting scoring to 1-10, and ensure that each factor is accurately scored, as well as showing different weights.
The bottom line is: you want to create some priority amongst the factors, and then see how they fair against each option.
Decision Matrix Tool, Step 5 – Add Scores for Each Option
Now, we must score each option against each of the decision factors.
Do this by simply scoring each decision factor from 1 to 5 in accordance to its impact from each option.
- 1 being a low impact
- 5 being a high impact
And again, add any number in between.
In our example…
We rated the return on investment from buying a new machine as high (score of 5). In other words, it should pay back the investment fast – or much faster than the other option of refurbishing the machine (which we scored as a 3).
Decision Matrix Tool, Step 6 – Choose the Highest Score
Once we’ve got scores against all the factors and for each of our options, the next step is to select the highest score as the winner.
In our example, the new machine purchase looks to be the better choice. It scored 60 as opposed to 56 for refurbishing the machine.
In this case, it’s probably worth spending the money to buy a new machine and reap the rewards.
The Swiss Knife of Decision Making
What this decision matrix tool allows us to do is measure the options against what’s important. And to do it in an objective and pragmatic way.
Take the complexity out of things – decisions are easier to come by, when you simplify things.
This grid allows you to remove the noise and focus on what really matters.
You can do this for career choices, too. For instance, which is the best job to take or which employee to choose from a list of candidates…
In fact, from cars to purchase, to projects to choose, this is a tool that can help you make informed decisions, whilst avoiding the typical biases and overcomplication that nearly all of us are guilty of falling into, from time to time.