Decision Matrix

Decision Matrix Overview: How to Create a Decision Matrix. You likely face dozens of personal and business decisions every day. But what do you do when you can’t decide between several good options? A decision matrix can clarify the pros and cons of complex decisions and help you make an informed choice.

What Is a Decision Matrix?

A decision matrix is a grid of information organized in columns and rows that allows you to compare options mathematically. This data-driven decision-making tool lets you break down complex problems to make informed decisions.

This matrix type is also known as a decision grid, grid analysis, multi-attribute utility theory, opportunity analysis, problem selection matrix, or Pugh matrix.

How Does a Decision Matrix Work?

A decision matrix works by listing each option in a row, then the critical factors influencing this decision in a column down the side. Factors get assigned a numbered score under each option, with the value depending on their level of importance. You then tally up the numbers to determine the highest score among your choices and make a final decision.

For example, suppose you want to rent an apartment, but you’re having trouble deciding between several choices, each with unique pros and cons. Across the top of the grid, you would write the names of the apartments. You would write the main factors impacting your decision in a column down the side. Factors that are important to you may include rent, location, square footage, and parking. You would then assign a weighted score to every factor under each apartment, giving more or less weight to the factors based on how important they are to you. The last step is to add up the numbers to determine a final numerical score for each apartment.

When to Use a Decision Matrix

There are many decision-making approaches, including simply weighing the pros and cons of each choice in your head. The decision matrix method is the most helpful tool to use when:

  • There are more than two options. If you need to select one choice from several similar options, a standard pro-con list won’t work. A decision matrix allows you to consider multiple options at the same time.
  • You can quantify it. If there are several important, quantifiable factors to consider, a decision matrix can help. Since you have to assign each option a numerical rating, it might not be the best choice for decisions that are difficult to quantify.
  • You need to be objective. If the right decision requires a logical or analytical approach without subjectivity, a decision matrix is a good option.

How to Create a Decision Matrix

Follow this step-by-step guide to create a decision matrix:

  1. Identify the options. Before you begin building your decision-making tool, you’ll need to narrow down different decision options. Make a list of three or more comparable options.
  2. Identify contributing factors. Brainstorm and define the different factors that are important to you and will influence your decision. Read more about different brainstorming techniques.
  3. Create a decision matrix grid. Draw your decision grid or use a decision matrix template. Write each option in a row at the top of the grid. In a column down the left side, write each factor or variable that will influence your decision. Draw rows and column lines, creating a grid of blank squares under each option and to the right of the important criteria.
  4. Rate each of your factors. Create a criteria rating form by giving each evaluation criteria a numerical scaled value. If you have fewer options, use a smaller rating scale, with a baseline of one up to five, where five is best. You can expand the scale if you have many options, perhaps from one to ten, where ten is best. Score the contributing factors under each potential choice.
  5. Add weight to each factor. If one factor is more important than another, add weight in the form of a numerical value to that factor. Assign a weighting factor number (for example, between one and three or one and five), depending on the number of options. For example, suppose you’re making a matrix for apartment hunting; the cost of rent might be more important than parking in your matrix analysis. In this case, rent would get a weight value of three, while parking might be assigned a lower number like one or two. If you have a flexible budget and parking is a must, you might give it a higher weight.
  6. Multiply the weight and rate under each option. Multiply the factor rate by the added weight to create a weighted decision matrix. Repeat this for each factor. There should be a number in each box on the grid when complete.
  7. Calculate the total score. Add up the multiplied weighted scores under each column for every option. The total will give you a final numerical value for each option and a guide to making the best decision for your needs.

4 Alternative Decision-Making Methods

A decision matrix is not your only choice in decision analysis methodology. Other decision-making methods include:

  1. Eisenhower matrix: An Eisenhower matrix, also called an urgent-important matrix, is a decision-making process designed to help you prioritize your tasks based on urgency. The Eisenhower matrix uses a box with four quadrants, each representing the urgency or importance of a particular task.
  2. Force-field analysis: Use this problem-solving method to determine the root causes of a problem by identifying forces around the issue. You’ll divide the forces into driving forces (those favorable to the solution or goal) and opposing forces (which are unfavorable and stymie the solution or goal).
  3. Pareto analysis: Pareto analysis is a valuable tool when there are many possible solutions to a problem or problems, and you need to choose the one that will have the maximum benefit to excel and improve workflow. Also known as the 80/20 rule, the Pareto principle hypothesizes that twenty percent of causes determine eighty percent of consequences.
  4. SWOT analysis: SWOT stands for strengths, weaknesses, opportunities, and also threats. This method divides internal factors you can control, listed under strengths and weakness, from external factors you don’t control, listed under opportunities and threats. Use this method when planning with team members or in project management. Learn more about how to use SWOT analysis.