How a decision matrix clears the path to easier choices

You're the project manager at a tech company, and it's your job to decide whether to prioritize a new product feature or to improve current functionality. The new feature would improve the user experience, but the updates would increase the app’s security. 

What if there was a tool to simplify this complex decision-making process? Enter: the decision matrix. This matrix is a decision model that removes the guesswork from tough choices by providing a structured way to weigh your options to find the best possible outcome.

What is a decision matrix?

Decision matrices are structured tables designed to help you make better decisions. You might also hear people call it by other names like "decision grid," "problem selection matrix," or "grid analysis." But all follow the same format, weighing which factors are most important and scoring each option in a table. 

The labels of the matrix will change depending on the type of decision you need to make. But generally, they present the options on the X axis, across the top, and the criteria along the Y axis, on the left.

The criteria are accompanied by a weight that assigns a level of importance to each. Then, you score the options on a set scale, like 1–5. To reveal your best decision, multiply the score by the weight for each and find the sum of each column.

A hiring decision matrix might look something like this:

That means that Candidate A has the highest score after finding the sum of each total: 

0.4 (education) + 0.3 (work experience) + 1.25 (soft skills) + 1 (technical skills) + 0.5 (salary expectation) = 3.7 

The resulting "weighted score" identifies the winner, making you more decisive with less bias. Forget about gut feelings or rolling the dice and let the option with the highest score be the go-to choice.

What can you use the decision matrix tool for?

Versatility is the name of the game with a decision matrix. You can apply it across the board — whether you're wrestling with the launch of a new product, fine-tuning project management workflows, or diving into opportunity analysis. Virtually any tricky issue with multiple moving parts, like varying criteria or numerous stakeholders, is an opportunity to use a decision matrix. 

How to use a decision matrix

Surprisingly, 58% of businesses base at least half of business decisions on gut feelings rather than data. However, top-performing companies make 60% of their decisions based on hard data, while underperforming companies rely on gut feel for 70% of their choices.

If you’re aiming for more structured and reliable outcomes, a decision matrix is a great way to join those top performers and circumvent analysis paralysis. Here is a step-by-step how-to so you can create a decision matrix template to put you on the right track:

Brainstorm evaluation criteria

With a clear set of standards, you’re better equipped to compare diverse options. Kick off the process by listing crucial factors tied to your decision. Consider your objectives, the people the decision affects, and any limitations like budget or time. These criteria are the cornerstone of your decision matrix, laying the groundwork for later evaluations. 

For any project, ask yourself: How long will this take? How much will this cost? What are the benefits?

Discuss and refine the criteria

Next up, share the list with your team and anyone else with a stake in the decision. Solicit their views to fine-tune your criteria list and guarantee team alignment. By engaging with others at this stage, you chip away at biases and develop a more resilient decision-making framework. Plus, you'll likely discover factors that slipped through the cracks thanks to others’ diverse perspectives.

Assign the weighting of each factor

Decide how important each of the criteria is and assign a weight as a team. The weighting greatly affects your final outcome, so it’s important that all stakeholders are aligned on what matters most. 

For a hiring decision, you might ask: Is it finding a top performer, or is it finding a junior employee with a lower salary expectation? Are you urgently filling the role or waiting for the perfect fit? These insights lead to more accurate weightings and better decisions. 

Identify your options

It's time to find creative solutions. Note down all conceivable courses of action to tackle your problem. Don’t just fixate on the immediate solutions — flag any potential hitches or underlying issues that might come into play. A comprehensive list of alternatives gives you a fuller picture, equipping you to navigate unforeseen challenges. 

Sometimes, this comes predetermined, like a list of candidates. But if you’re thinking divergently about how to cut costs on a new project, any idea might be fair game. 

Draw the matrix

Once you’ve nailed down the criteria and options, craft your matrix. Programs like Excel are great for this task, but you can also create a simple table in a document or on paper. Line up your evaluation criteria in the far left column and place your potential outcomes across the top. You've now sketched the blueprint for your decision-making matrix.

Evaluate choices against criteria

Now, roll up your sleeves and rank the alternatives. Generally, you'll deploy a numerical rating scale, like 1–5 or 1–10, to quantify how each option aligns with your criteria. The higher the number, the better the fit. Watch these numeric ratings turn the tangled web of possibilities into straightforward, actionable data.

Calculate the total score

Multiply the rating for each alternative by the assigned weight. This step amplifies the usefulness of your decision matrix by highlighting what’s really pivotal.

The highest total score determines the most favorable course of action based on your criteria and their importance.

Make the final decision

This is the culmination of your decision matrix method. Choose the option that tallies the highest score. You’ve systematically assessed all critical factors, accounted for different perspectives, and used an analytical approach to arrive at this point. Your final decision now rests on a solid, number-backed foundation.

If you find that the highest-scoring option isn’t what you expected or what your team feels is the best course of action, reevaluate your weighting and try again. But if everyone agreed on the weighting before you started scoring, you likely just had unrealistic expectations for the outcome. 

Decision matrix considerations

Research shows that 50% of decisions in organizations fail. It’s unrealistic to find the perfect option every time, but the right decision-making process will improve your chances of rising above that statistic. Here are a few considerations to keep in mind to avoid mistakes in your decision-matrix analysis:

• Biases: Your decision matrix is only as good as the data you put into it. Beware of subjectivity and cognitive biases that could tilt the scales. Are team members inclined to rate options more favorably based on personal preferences? Clear-cut criteria keep biases at bay and foster a more accurate evaluation.
• Criteria rating form: Consistency is key. Use a standardized form to rate each option against your chosen criteria. This guarantees everyone uses the same yardstick when rating options. It also makes the decision-making process more transparent and easily understandable, as everyone’s taking the same approach.
• Stakeholder input: Don’t make your decision in a vacuum. Gather information from all relevant parties, including team members and stakeholders. Their insights can bring different perspectives you may not have considered, contributing to a more rounded, robust decision.

Decision matrix examples

Whether you're running a business, managing a project, or even making personal choices, a decision matrix offers a reliable way to navigate tough decisions. To illustrate how a decision matrix solves real-world dilemmas, here are some everyday examples: 

• Business decisions: You’ve got multiple pricing strategies on the table. How do you pick the winner? A decision matrix sets the stage. Map out your criteria — think market demand, competition, and cost. Rate each strategy against these criteria and apply weighting factors to the ones that matter most. Voila! You've got a total score for each strategy. The one with the highest score becomes your go-to pricing approach. A decision matrix eliminates the guesswork and makes the choice almost obvious.
• Project management: Imagine you’re looking to improve your management skills in a tech project. With a decision matrix, you won't have to rely on hunches. Create your matrix and populate it with criteria like functionality, low cost, and team impact. Score your options, apply weightage, and add them up. The option with the highest score offers the most balanced solution, one that accounts for different factors and keeps everyone happy.
• Personal choices: Assume you’re in the market for a new car. Rather than flipping a coin or following a friend's advice, break out a decision matrix. List your must-haves and nice-to-haves: mileage, safety features, aesthetics, and price. Assign scores based on how each car model meets these criteria. Don't forget to weight the scores based on what's most important to you. Add up the scores, and there you have it — a car that ticks most, if not all, of your boxes without breaking the bank.

A decision matrix isn't just a fancy grid. It's your shortcut to making choices you won't regret.

Decision matrix alternatives

Though a decision matrix serves well in most situations, it isn't the only decision-making style. Sometimes, you'll find other methods better suited to your specific needs, especially if you’re dealing with subjective options that are hard to score. Below are some alternatives worth considering.

• Eisenhower matrix: If you have a ton of tasks and need help figuring out where to start, meet the Eisenhower matrix. This one is simple, unlike a weighted decision matrix, which focuses on multiple criteria. It divides tasks into four categories: urgent and important, important but not urgent, urgent but not important, and neither. This way, you know what to tackle first and what to delegate or defer. It's particularly handy for sorting through a hefty to-do list or prioritizing tasks in a pinch.
• RACI chart: If you’re managing a project and need to sort out team roles and responsibilities, you need a framework clarifying who’s calling the shots and doing the legwork. That’s when a RACI chart comes into play. RACI stands for Responsible, Accountable, Consulted, and Informed. Fill this out to see who should perform actions, who needs to sign off on them, and who should stay in the loop on that progress. It's great to eliminate “I thought you were handling that” conversations that no one wants to have.

Knowing when to use other tools like the Eisenhower Matrix or a RACI chart helps you make the best decisions tailored to the situation at hand, so stay open to using several different methods until you find what works best. 

Bring it all together

In a world of choices, a decision matrix is your north star, guiding you to the best decision. You gain a 360-degree view of your options by considering all relevant factors. This handy tool doesn't just simplify complex scenarios; it gives you confidence and clarity. 

When you use a decision matrix, you're not gambling with outcomes. Instead, you're making calculated moves based on a range of essential criteria, from pricing strategies in business to choosing the best workflow in project management. 

So, the next time you find yourself at a crossroads, professionally or personally, don't stress. Remember: a decision matrix clears the path and points you in the right direction.