Making big and difficult decisions is never easy to come about. We all must have, in one way or the other been there; difficult considerations such as Quit my job? Buy this stuff? Marry Him/her? Start this business or not? Etc. However, we mull over possible challenges and personal circumstances which could impact on the critical decisions to make- finances, family obligations, self-belief, and so on.
In doubt of our own feelings, we seek advice and analyze available information over and over again, all in the hope of making the right choice in your life.
As Lance Ng coined it,” At the end of the day, life is complicated. But we should try to simplify it as much as we can, not least because it gives us clarity and peace of mind”.
When choices can be weighed against two or more criteria, I use a simple method to quantify the pros and cons. I scribble a simple scorecard on a piece of paper based on the possibilities and my desired outcomes. When you have a tough decision to make, you’re probably used to compiling a list of pros and cons, phoning a friend, or flipping a coin. These approaches may work when determining what color to paint the new apartment or where to go for dinner, but they probably aren’t best when it comes to important business decisions.
When you’re faced with multiple choices and countless variables, a decision matrix can clear up confusion about the options and highlight points that may factor into the final call. This quantitative method can remove emotion as well as confusion to help you guide your business effectively. Unlike a simple list of pros and cons, a decision matrix allows you to place importance on each factor.
Stuart Pugh, professor and head of design at the University of Strathclyde, first created the method to help in selecting design alternatives, but the tool has evolved to a general decision-making aid. Also known as the Pugh method, grid analysis or the multi-attribute utility theory, a decision matrix helps remove subjectivity to make a sound conclusion.
Creating a Decision Matrix
Decision matrices can help you select the best option, but also in prioritizing tasks, problem-solving or even crafting arguments to defend a decision you’ve already made.
List your decision alternatives as rows, and the relevant factors affecting the decisions
– such as cost, ease and effectiveness – as the columns. Then, establish a ratings scale to assess the value of each alternative/factor combination. Be sure that the rankings are consistent. For example, if you’re looking at pain points, be sure each issue is worded so it gets more points the worse it is.
Next, multiply your original ratings by the weighted rankings to get a score. All the factors under each option should then be added up. The option that scores the highest is the winning choice or the first item to work on. You can get a whiteboard or piece of paper and freehand your matrix, but several websites have templates. Here are a few:
Decision matrices can be used in a variety of situations, such as determining the best way to expand or to tackle a customer service issue. Here we use a decision matrix to determine the best location for a new restaurant:
In this example, a restaurant owner is considering four locations. She listed the factors she finds important and assigned weights that reflect how important she considers each aspect to be. Rent is a factor, but she’s decided market share, which determines how likely she is to get customers and regulars, is the most important issue. She also values someplace closer to her home so she can visit quickly if there are problems, but it’s a nice-to-have feature, not a vital one. Also important is the employee base – she wants to set up where she can find reliable workers. She did not consider floor plan, because she found all of them basically equal and intends to remodel anyway.
When the restaurateur ran the numbers, Locations 3 and 4 come up as close winners. However, looking at the individual numbers helped solidify her decision. Location 3, while the most expensive, offers the greatest opportunity to find qualified employees and attract diners. Thus, not only is it the best by overall score, but the individual factors she values help her justify the increased rent.
A decision matrix is not the only decision-making tool available. Sometimes, a simple pros and cons list works. However, for a decision where you have multiple options and diverse features to consider, a decision matrix can shed light on the best choice.
Although this decision tool is insightful, it’s important to still listen your gut feeling. MindTools suggests comparing the matrix winner against your intuition’s choice.
“If it’s different, consider why that is and reflect on the scores and weightings that you applied. This may be a sign that certain factors are more important to you than you initially thought,” a MindTools video on decision matrices advises.
A simple table listing all the options and consideration factors makes it easy to tally the pros and cons of the choices. Even if one choice doesn’t clearly come out on top, the process forces you to think about what is important to you in terms of priorities and how each option stacks up. At the very least, it helps you to eliminate bad choices.
Sometimes there aren’t clear negative or positive impacts to the factors being considered. Sometimes they carry potentials of varying degrees. In such situations you rank them from lowest to highest potential with a simple score range — 1 to 3 or 1 to 5.
The decision matrix method may seem like common sense but you’ll be surprised by how much it helps to clear the cloud in your head once you sit down and scribble it out.
“The key to this process is to be truly honest with yourself about what matters and keep the scoring system as simple as possible. Once you’ve added up the scores, the option that suits you and your circumstances the most usually becomes quite clear”. By Lance Ng.
Another method propagated by Lance Ng is called Thought Experiment. When the decision involves a single, life-altering change, you use this method called a ‘thought experiment’ in Philosophy classes. It clears the confusion and helps make a better choice. He detailed all in ‘’6 months left to live’’ instances as follow;
“The Tibetans have a saying, “In thinking about death, you’ll learn how to live.” It is very true. We are often confused by choices only because we think we have time to do more. But if we didn’t, the priorities in our lives become very clear.
So I sit down in a quiet place and imagine I’m told by a doctor I have six months left to live. You have to make this ‘thought experiment’ very real psychologically. You have to generate all the emotions of realizing you are doomed and that you have very limited time left on earth. Then you ask yourself the question: do I still want to do this?
If the answer is yes, the choice is clear. No matter what restrictions you feel due to your circumstances or obligations, you will find a way to make it happen. Why? Because you want to die with no regrets”
This method is appropriate if you are making decisions such as:
✔️Do I want to marry this person?
If you find yourself wanting to spend as much time as possible with your partner even when you are facing death, you know he/she is the right one for you.
✔️Should I make this career change?
Steve Jobs worked until the day he died. There is no greater passion for a job than that.
✔️Do I move to Paris and learn how to bake?
Thought Experiment Justification
Now or later, Most of us assume we have time left to fulfil our dreams. But life can often be shorter than we think.
Keep in mind please; making life changing decisions by assuming you have a limited lifespan left doesn’t mean you should forsake all moral, ethics and personal responsibilities. It is not an excuse to buy an automatic rifle and put holes in everyone you’ve felt has wronged you. Or leave your family behind without a word and blow your savings in Las Vegas.
It is simply a psychological method to ask yourself, “If I didn’t have all the time left in the world, what is important to me? What do I want to do most with my remaining time?”
In short, this method is about one word: PRIORITIES.
Do You Need Accounting Help?
Consistent up to date and cleaning of accounting records for sound business decision making, may be posing some difficulties when you are preoccupied with other business functions. Is it time to consider independent professionals because of certain technical complications that could occur along the line? It could also be daunting, time-consuming procedures. Not recording correctly and poor monitoring can cause complications and confusion.
we @Fritznoble assist our clients on the best available options that suit their businesses...Reach out/ Outsource With Us… If Accounting works are bothering to you, then it’s time you outsourced your accounting and bookkeeping requirements, this will help you concentrate more on core competencies of your business; with a team of professionals to help.
Social media Connections
Visit here, for more business tips.