My Decision Matrix

Have you ever had to make a decision with too many options or factors to consider all at once? Or perhaps you’d like to be more objective about your choices. Or maybe you need to document your decision to make it more defensible later on (“your honor, this chart shows why Grape Nehi is clearly superior to Orange”). Whatever the reason, you may find that a simple decision matrix is all you need.

I’ve been using various forms of my decision matrix to make both personal and professional decisions for as long as I can remember. In recent years, I discovered that my method is very similar to portions of a Kepner-Tregoe Matrix (“KT Matrix”). If you’re interested in a much deeper understanding of their techniques, I wholeheartedly recommend The New Rational Manager by Charles H. Kepner and Benjamin B. Tregoe. It’s a fantastic book.

Anyway, I’ve found myself using my decision matrix in more and more situations recently, and people have started asking for copies of the spreadsheet. I re-formatted it a bit, added some simple instructions, and I’ve been e-mailing it to anyone who asks. I’m sure someone with more spreadsheet skills could improve what I’ve created, and if anyone would like me to share their improved version, please contact me directly.

To use the decision matrix, I recommend the following steps (whether you’re doing this alone or with a group). By the way, you’ll get the most objective decisions by writing down your results on paper or a whiteboard before entering them into the spreadsheet. If you use the spreadsheet, it’s too easy to see the options jockeying for position.

1. Of the options you’re considering, decide which attributes can be used to help make a decision. You can include as many attributes as necessary. For example, if you’re considering multiple vendors, you might use attributes like Cost, Reliability, Company Size, Expertise, Process Familiarity, etc. If you’re doing this as a group, make sure everyone agrees what the attribute means. It’s often helpful to include a few more words, like: “Process Familiarity – how well does the vendor understand the way we do things at our company?”
    
2. For each attribute, assign a relative weight that is greater than zero. In my decision matrix, the range of numbers doesn’t matter; it’s the relationship between those numbers that matters. For example, if Cost is assigned a weight of 8 and Expertise is assigned a 4, you’re saying that Cost is twice as important as Expertise in your decision. Naturally, lower weights are less important than higher weights, and it’s okay if multiple attributes share the same weight. In that case, you’re saying that those attributes will be treated equally. In group situations, the discussion about the relative importance of these attributes can be very enlightening, and it’s a fantastic way to build consensus.
    
3. While this step is optional, I find it extremely useful. I like to “test” the weights by turning them into sentences. And if I’m in a group, we test these sentences aloud. I’ll say something like: “So, we’re saying that it’s three times as important to work with a large Company Size than it is to receive a low Cost?” Or: “Reliability is really only half as important as Expertise?” For anything that sounds wrong, this is a great opportunity to adjust the relative weights.
    
4. List all of your options. In the example I’ve been using, this would be the vendor names. Then, for each attribute, assign a score from 0-100 to each option. I highly recommend scoring all options for an attribute before moving to the next attribute, because it’s much easier to imagine the attribute, then score each option relative to one another. Of course, if you don’t know all of your options yet, this can’t be done (for example, if you’re using this technique to interview candidates for employment, you may need to score each attribute for the candidate while on the phone). Scores don’t have to be perfect, and 0 can mean bad/low confidence/not applicable/failure/etc., while 100 can mean great/high confidence/guaranteed/etc.
    
5. Enter your results into the spreadsheet. Here’s an example decision matrix that my wife and I used to select a lot of land years ago:
   
    
   Add the attributes as columns. In this example, attributes are listed in columns B through H. If you need to insert new columns, be sure to update the formulas in row 10 and in the Score column. I don’t like that this step requires manual manipulation of the formulas, and I’m hoping that someone can improve the spreadsheet to make this step easier and more maintainable. Then, add the relative weights from step 2 above the appropriate attributes in row 9. Last, add all of your options and scores from step 4.

And you’re done! If everything worked correctly, the best option (according to your attributes, weights, and scores) should be the option with the highest overall score in the last column. Often, there are additional factors that can’t easily be included with attributes alone, so the final decision maker should really use this data as good advice. Perhaps best of all, you have a defensible document that summarizes which attributes of your decision were important, how they relate to each other, and how each option was scored.

Download my Decision Matrix Excel spreadsheet (21.5KB), and start making objective, defensible decisions!