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DownloadHow do you better organize your priorities to make stronger decisions backed up by data? With this framework, you'll learn how to use the top decision-making tools like decision matrix and Pareto analysis, Fishbone and Kano diagrams, Eisenhower, Action priority, and Rapid matrices, OODA loops, DMAIC model and Delphi Method which you can download and customize to your needs.
When you make decisions, emotions, ego, and bias often get in the way. With these tools, you can be more organized with your decision process to better dissect a complex problem or turn a brainstorm session into a digestible dataset. Learn how to make decisions you can back up with a chart, a graph, a matrix, or a weighted table alongside how companies like Apple, Ford, Sony and Microsoft make decisions. Plus, learn about the toughest decision General Dwight Eisenhower had to make during World War 2 and how you can use his mental model for your own important decisions.
So you have a tough decision to make with a lot of competing factors. How do you make the right call without relying on gut instinct?
Over the last 20 years, Sony's Playstation and Microsoft's Xbox have been neck and neck for the top-selling game console with each new generation. But both companies made decisions they had to walk back this year: Xbox decided to raise the cost and charge gamers the same price they would pay for a whole year of its Xbox Live Gold service, only now they would only get six months. Playstation also angered fans when it decided to shut down the legacy Playstation network stores, also ultimately deciding to walk back the decision.
To avoid a decision that seems smart based on cost analysis but could cost you a lot more in brand equity, use a decision matrix analysis to use an analytical approach to your decision options. (Slide 3)
A simple decision matrix on the left lists the criteria to make a decision alongside a score for each potential solution. A weighted matrix on the right lets you value different criteria based on their level of importance.
For example, if cost isn't as important as service or vice versa, each can be weighted lower or higher as needed. If the cost scores high on a decision but the rest of the criteria is weighted lower, it will bring the entire score down, which could lead to a different decision depending on what's most important.
Once all these weighted scores are tallied up, you can use a graph visualization to see how they all stack up. (Slide 4)
So you know how to make an informed decision. But how do you decide which decision will have the most impact on your company?
Coined by Italian economist Vilfredo Pareto, the Pareto principle states that for many events, 80% of the effects come from 20% of the causes. This means a minority of inciting incidents lead to a majority of outcomes. For example, in 2018, 93% of all EV sales came from just 12 models, of which the Tesla model 3 sold 4x as many units as its next closest competitor. Tesla not only led the electrification of the industry but changed its peers' business models. In addition to going electric, Ford announced earlier this year it will permanently reduce the range of vehicles carried on dealership lots and transition to a build-to-order model. Ford is taking the Pareto principle to heart and will spend less on promotions, reduce manufacturing costs and complexity, and invest more in the models' buyers really want.
Pareto analysis is a simple decision-making technique to assess competing problems and measure their impact. In this case, the 80-20% rule can be translated into decision-making as it forces you to look at what causes what and the impact of those causes.
In a table or survey format, you can identify and list a series of problems that contribute to a particular outcome. You then score the problems based on their frequency of occurrence, percentage of the whole, and level of impact. In a graph visualization, group problems together to see which problem would be the most impactful to solve. Decision made. (Slide 6)
During your Pareto analysis, you may find it important to identify the root cause of each problem that you identify.
For example, a new report from accounting firm Grant Thorton identified nearly one million job vacancies in the UK. Half of these jobs were in the food and drink sector, industries that typically rely on an immigrant workforce from the EU. This labor shortage has created a supply chain crisis where the government blames the pandemic and businesses blame Brexit, which left many holes in the British labor market without the workers to fill them. So which of these is the root cause?
To identify root causes, you can use a fishbone diagram, also called a root cause and effect diagram. A fishbone diagram begins with a problem statement that is written on the right, or the head of the fish. Then, contributing causes are added to the bones of the fish, with smaller bones that branch off from the larger issues that add additional context or contribute to the issue. (Slide 8)
Once all the contributing factors are listed, this root cause discovery analysis can be used to compile the results and weight them according to their relative importance with another decision-making tool like Pareto.
In the case of the UK labor shortage, Grant Thornton's research found that since the start of the pandemic, 1.3 million foreign-born workers had left the UK. While the pandemic was the root cause, the government's current post-Brexit immigration policies have not done enough to offer short-term visas to foreign workers that could solve the problem, and everything from supermarkets to meat processors to farmers and truckers now pay the price.
You have the root cause and the impact of a decision. But what about when you want to make decisions about what features to include in a product?
This year, Apple unveiled the iPhone 13 with some pretty impressive video features, including a new low-light sensor and AI-powered rack focus feature. While both sound niche, Apple had a big customer segment in mind: the creator economy. Apple likely made the decision to capture the creator economy with these new features and take market share from competitor brands. Since TikTok announced it has 1 billion monthly active users, Apple seems to want to position its iPhone 13 as being the creative tool of choice for all those potential creators.
To decide what product features to focus on for your next product launch, you can use a Kano Diagram to help your decision-making. Survey potential users with key questions to ask that draw out insights on potential features. Ask respondents to answer whether they would like, expect, tolerate, dislike, or be neutral on a feature. Create a table of responses with the number of answers for each. (Slide 10)
Then, collate these responses in a table that you can plot on the Kano diagram. The features with high functionality and high user satisfaction should be your main features to focus on. (Slide 12)
With so many urgent priorities demanding you make a decision, how do you prioritize which decisions to make?
As President, Dwight Eisenhower was known for the wars he didn't fight. But on May 30th in 1944, then Supreme Commander of the Allied Forces, Eisenhower was faced with the greatest decision he ever had to make. With a little less than a week before the landing in Normandy, British Air Chief Marshal Sir Trafford Leigh-Mallory came to him with an analysis that they should call off the mission because casualties of the glider troops could be as high as 90%. Of 18,000 men, only 5,00 would survive — a cost so high that the mission would be doomed before they reached the ground. But in Ike's words, "The success of the landings on the beaches might well turn on the success of the paratroopers behind the lines." So how did he solve the decision?
Founded after Eisenhower, the Eisenhower Matrix is a decision-making matrix for productivity that separates tasks that need to be done immediately, scheduled, delegated, or deleted. In following Eisenhower's own decision-making process, you can quickly arrange tasks by whether they are urgent or whether they are important. Dwight did this so only important and urgent matters came across his desk. If you divide your tasks into urgent and important, you can quickly see which tasks to devote more thought to and be more deliberate about and which others to handle quickly without spending too much time on. (Slide 13)
As Eisenhower was quoted: "I have two kinds of problems: the urgent and the important. The urgent are not important, and the important are never urgent."
For more tools to increase your productivity, download this presentation. You'll gain more variations and visualizations to help plan every type of productivity, with daily, weekly, and monthly views.
So what did Ike decide to do? He reviewed the process for the invasion countless times over the next few days. When it came down to decide, he weighed the cost of sending his men into D-Day without doing everything he could do to prevent the Germans from bringing up reinforcements, and he couldn't permit that cost either. So he let the order stand. And, as he later told a group of student journalists, "The airborne did their job. And, I am happy to say, the casualties were only 8%.
For more Decision-Making Models like an action priority matrix, OODA loop, RAPID matrix, DMAIC or Delphi Method that you can download and customize with your data, you can download and enjoy this framework.
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