Is it a headache to make important decisions in your business? We know how you feel. The average business leader spends close to 40% of their time on business decisions—and most of that time is wasted.
Thankfully, we’ve got something that can flip the script for any business leader. You can stop pulling out your hair and save more time using a decision matrix. (A what now?)
Stay with for the next couple of minutes, and here’s what you’ll learn:
- What is a decision matrix?
- Why do you need a decision matrix?
- When should you use a decision matrix?
- How to create a decision matrix in 7 easy steps
By the end of this post, you’ll understand everything you need to know about to make the right decision every time.
What is a decision matrix?
A decision matrix is an opportunity analysis tool that uses weighted criteria to evaluate and choose between multiple options. In other words, it is a tool that helps you weigh up the best options, assess the important factors, and make the right choice based on logic, not emotion.
Other names for a decision matrix include decision grid, problem selection matrix, Pugh matrix, solution matrix, grid analysis, weighted decision matrix, criteria rating form, and criteria-based matrix.
So, apart from having more aliases than a spy, a decision matrix is a useful business tool. The big question is: how does it work? (Spoiler alert: It has nothing to do with Keanu Reeves).
In a nutshell, your team brainstorms key criteria, then applies weighted scores to each option based on relative importance. This method helps you take a logical approach to determine the best decision (based on the highest score).
Why do you need a decision matrix?
Sometimes, leaders get frozen in paralysis in analysis, bewildered by 37 half-baked ideas from the last meeting.
It doesn’t matter how pretty and colorful the intern makes the Excel spreadsheet look if you’re still stuck. In the end, you need to cut the noise and get total clarity on the best road forward.
Here are six benefits of using a decision matrix:
- Offers more clarity. When you use a decision matrix, you have one source of truth instead of many. This structure and clarity in your decision-making process allow your team to focus and close the planning-to-execution gap in real-time.
- Enhances team alignment. You have a system that keeps everyone on track to approach their work in a way that aligns with your organizational goals. Put simply: you get fast, impactful action and better outcomes.
- Improves collaboration. Instead of a small group of cult leaders making all the big decisions, you give everyone a voice. Everyone in your company should be involved in decisions (even if some ideas sound like they were born at Friday night’s office party)
- Better informed decisions. The democratic approach to strategy and decision-making opens the table to more valuable employee feedback. You can get input from multiple perspectives and source great ideas from many people instead of just a few.
- Faster progress. If you want to keep up with your competitors in this fast and frenzied world, your organization needs to act fast. Innovation is driven by quick, confident decision-makers (not like those painfully slow-thinking trees in Lord of the Rings).
- High-ROI activity. Just like a decision tree or the Eisenhower matrix, this decision-making tool is a low-cost activity you can perform quickly and easily. Despite its simplicity, it helps you make a quick final decision that makes the most sense.
At its core, a decision matrix is a human-centric approach to business. The pressure is on the problem, not the people—and no one’s left out.
When should you use a decision matrix?
The decision matrix is not for every little dilemma you face. It’s most effective when you need to pick between several similar options, but it won’t make sense with some types of decisions.
For example, suppose you’re choosing between chicken wings and vegan sausages for the company BBQ. In that case, you won’t need to roll out the multi-attribute utility theory.
If you’re unsure about whether the problem warrants this approach, ask yourself the following questions:
- Will we compare multiple, similar options?
- Will we need to eliminate the alternatives to make one final choice?
- Will we need to consider a variety of important criteria?
If you answered “hell yeah” to each of the questions above, the decision matrix makes sense.
This decision analysis framework establishes a baseline to help you make the right choice based on the most critical factors. And you can trust the results of these decisions because, well, you made the rules.
Ultimately, this approach brings you to the most logical choice, so you don’t make choices based on emotion.
How to create a decision matrix in 7 steps
If you want to drive game-changing innovation, you need to start with a step-by-step blueprint that makes it easy for your people to make critical decisions. Here are seven steps to create a decision matrix:
1. Identify the contenders
What is the problem? Who or what are the potential solutions?
It’s not easy to go from idea to implementation, so it’s crucial to establish a baseline of options. As a rule of thumb, limit the options to five, so you can drill down on the best alternatives.
For this example, let’s pretend you have three social media influencers to choose from to promote your new product—a pocket-sized, Bluetooth-enabled, hot dog grilling machine.
2. Define criteria
When comparing options, you need to know what factors matter most. What criteria will help you judge each option? What will influence the outcome?
With your three influencers, the initial criteria may include:
- Cost
- Audience size
- Engagement rate on social media platforms
- Views on hot topics like social good and environmentalism
- Opinion on the ketchup vs. relish debate
3. Build your matrix (or use a decision matrix template)
Here’s the fun part. Draw a decision grid:
- The columns represent the options you need to choose between (e.g., three influencers)
- The rows represent the evaluation criteria (e.g., cost, audience size, engagement rate)
If you’re making many big decisions—which you probably are—it can be a pain to draw up a framework from scratch every time. The most effective way to create a decision matrix is with an innovative platform that enables access for everyone on your team at any time.
You can use our decision matrix template to get started quickly. Or you can fiddle around drawing clumsy grids in Powerpoint if you want everyone to roll their eyes and snigger at your awkward attempts to make it look professional. Your choice.
4. Determine the weighting system
Now, assuming that you’ve come to your senses and have a nice, shiny template at your fingertips, we can move forward. (If you’re still fumbling around, we can email you the rest of this guide to catch up with the class in your own time.)
When you’re quite ready, the next step is to develop a system to weigh your variables. Don’t worry, you won’t need to go on a diet.
You could rank every factor from 1-10 if there is a lot of variation between the options. If not, a smaller scale like 1-5 will do just fine.
Let’s take a closer look at our influencers:
- Benji offers bargain rates. He has a thriving Instagram channel, but his production is slightly shoddy. It might be a poor tech stack, but it doesn’t help that he always has his mouth full when shooting videos.
- Sheila is a tad more expensive, but the price tag comes with a big reach across her YouTube and Insta channels. She’s also great at driving engagement. That said, it’s hard to believe she eats any hotdogs, so it might not seem like a genuine partnership.
- Kaia is a top-tier influencer with a massive following on TikTok and YouTube, with connections to many competitive eaters in Major League Eating. They have the highest rates and best engagement.
Step 4: Determine the weighting system
Provide enough points on the scale to get specific. But keep in mind if you overthink this part of the process, you probably don’t have clearly defined variables in the first place.
5. Add weight to the variables
Now it’s time to assign a weight to all the variables, which will give you the potential total scores of your decision matrix. Some variables might be more important than others, so they have a higher weighting factor.
For instance, if you’re strapped for cash, the budget might be a big concern. So, you assign a weight of 5 to the cost variable, whereas engagement could be less of a priority so that you could assign a lower number, like 3 or 4.
Step 5: Add weights to the variables
6. Multiply the weighted scores
Once you assign a weight to each consideration in the matrix and rate every option, it’s time to tally up.
For each of the three influencers in our example, we can multiply the weight by each variable (e.g., cost, engagement, audience size).
This approach ensures that the more important considerations are being given more weight, which will ultimately help you select the best fit for the campaign.
Step 6: Multiply the weighted scores
7. Calculate the total scores to make the final decision
After you multiply the weighted scores, add up all considerations for each option. We can do this final calculation to pick the best of the three influencers in our example. At this point, you should come to a clear, logical conclusion about which is the right choice.
Whether you’re looking for a new agency or the right influencer to promote the Pocket Dog 3000, a decision matrix is an effective way to make the right choice.
Step 7: Calculate the total scores
Approach complex decisions with our decision matrix
When you approach complex decisions in your business, you need concrete evaluation criteria, not subjectivity. You must resist the urge to run with emotional impulses and guesswork and instead be a cold, calculated killer strategist.
A decision matrix can empower your team members with an easy-to-use workflow that helps them stay on track to hit your company goals. If you want to make your vision happen, you need to bring simplicity to every interaction.
