How to Use a Decision Matrix
As with many business decisions, you have to decide between several options, and each option has many variables, how do you best do it. Unfortunately, we decide due to emotion and then use logic to justify our decision. However, to get the best choice, a Decision Matrix is a useful tool in many situations.
How does a Decision Matrix work?
Determine the Factors Influencing your Decision.
First, determine the variables that are influencing your decision. For example, we are looking to buy a Midsize SUV from the 2019 line up (their comparative scores are from US News and World Report) we may decide that the deciding variables are:
In the case of a potential employee, it may be leadership, teamwork, specific skills, etc.
Next List your Alternative Options
Here we list the alternatives we are deciding between. In the case of our SUVs, let say we are choosing between Hyundai Palisade, Mazda CX-9, Toyota Highlander, and Volkswagen Atlas.
Then prepare a matrix as shown below with the Factors down the right and the Alternatives Across the top.
Weight the Factors
Now weight factors influencing the decision so that the total weighting comes to 100. For illustrative purposes, I am going to weight the elements as follows:
Performance – 25%
Interior – 10%
Safety – 15%
Reliability – 20%
MSRP – 15%
MPG – 15%
We allocate half of the weighting value to the first alternative regardless of what it is. This step is done to prevent anchoring and get a better spread across the options. Thus, The Palisade would have a score for Performance of 12.5. Next, we would look at the Mazda CX-9. The Mazda has a much higher performance than the Palisade, so it must score between 12.5 and 25. For argument’s sake, we will give it a score of 21.3. Next, we look at the Highlander, which has a lower performance than the Palisade. We know it must score between 0 and 12.5. However, it is not that bad, so that we will give it a score of 8.7. Finally, we will look at the Atlas. The Atlas is worse than the Palisade, so it must score below 12.5; however, it is also worse than the Highlander, so it must score below 8.7. However, as it scores only just below the Highlander, let’s give it a score of 8.
Next, we turn to the Interior. Like before, the Palisade gets a score of 5. The Mazda is worse than the Palisade, so we shall give it a rating of 4.2. The Highlander is worse than the Mazda, so we shall give it a score of 3.6. The Atlas is the best car concerning the Interior and is far ahead of the Palisade so we shall give it a rating of 8.5
Continue down and across for each factor, to complete the decision matrix. However, please note that concerning costs, i.e., MSRP and MPG, I have inversed them as we would want the lowest prices to have the highest score. As a result, the final product would look something like this:
As we can see, the Mazda received the highest score, and so that is the best car for us to buy using our weightings. If we used different weighting, we would obtain different results.
Good luck with your decision making.