How to make good decisions is subject to many books, articles and guidelines. We are taking decisions probably every single minute during the day. Nonetheless, the process of good decision making often still seems difficult and intuitive. This is especially true when all alternatives have a catch. Below method can help you to make the right decision – in your project as well as in private.
Collecting All Facts
One does not need more than a sheet of paper and a pencil to write down everything that may be relevant to a decision. That’s why the method is also called Consider All Facts (CAF). List all influencing factors in one column. In a second column, sort all factors into three groups according to their meaning with the most important ones on top of the list. Another column is for notes and ideas. The method provides an overview of open questions, however, does not give usually answers.
Pro and Cons List
Collect all pros and cons in a table with three columns. List in the first column everything that speaks in favor of a decision. Counter arguments go to the second column, and arrange ideas and questions in the third column.
Decision Matrix
The easiest way to compare alternatives is again a tabular overview. Provide a separate column for each alternative and write them one by one in the column headers beginning from the second column. Then determine evaluation criteria for options and include a short option description in the first column, each option in a separate row. Note points or grades in the columns how well each criterion is met. Aggregating all values gives an overall grade for each decision alternative.
Cost-Benefit Analysis
This analysis is a decision matrix in which a weighting is given to the individual evaluation criteria – depending on their importance. List mandatory criteria at the top of the list. Eliminate all options that do not meet one or more disqualifier criterion. The other criteria are weighted with percentages. Then multiply the points by the weight and sum them for each alternative.
Decision Tree
With a classic decision tree the results of different decision alternatives can be evaluated according to their statistical probability. The basic question is always: what happens if …?
One can also create a set of questions that have to be answered “yes” or “no” for each individual option. As soon as one “no” is recorded, the specific option is ruled out.
Scenario Analysis
The scenario analysis attempts to forecast future developments. At first the best and the worst case scenarios are developed. In between, a small number further scenarios with average values make sense. In this way, a picture of the future can be developed quite well.