# Decision Matrix Analysis

Do you ever feel a bit overwhelmed when you have to make an important decision? Don’t worry – you certainly aren’t alone. Making big decisions is the hardest part of being in a management position, and making good choices is usually what separates the successful managers from the rest.

As you are probably aware, the best way to make an important decision is to work through the various options at hand one by one, weighing each based on a number of factors before coming to a conclusion. That style of decision making is commonly used in business, and it is represented in the Decision Matrix Analysis model.

Rather than using a pre-designed matrix – which may or may not be appropriate for your needs – you are going to create your own matrix when using this model. That way, the matrix will be completely customized to your needs, and it will be certain to help you land on a successful conclusion.

The process might sound like a lot of work upfront, but it is actually relatively quick and easy to perform. Once you have a little bit of practice in building this kind of matrix, you will likely return to it time and time again in order to make your big decisions.

## Getting Started

The first thing you need to do in order to assemble your matrix is to collect a list of the various options that you have for the decision. For instance, if you are trying to decide on a location for a new office that you are building, you could list all of the potential locations as rows on the left side of your matrix. You aren’t trying to eliminate anything at this point in the process, so go ahead and list all of the potential options – even the ones that you don’t think are going to work out in the end. Keeping an open mind is one of the best things you can do when trying to make decisions.

So, for the purposes of this example, let’s imagine that you have five potential locations in mind for your new office. The matrix will then be created with five rows, one for each of the locations that you may pick. Once this initial step is completed, you can move on to finishing off the rest of the matrix.

Obviously, you are going to need some columns to intersect with your rows if you are going to create a proper matrix. The columns, in this case, are going to be the various factors that you are going to use to influence your decision. You can have as many factors as you would like, but you should try to develop at least three or four if you are going to have a matrix that will tell you something about making the right decision.

Continuing with the example of a location for your new office, there are plenty of potential factors that may influence the decision. For instance, you could rate each location for how far it is from the freeway, as proximity to main roads will make the location easier to access for employees, suppliers, etc.

Also, you will want to consider cost, as various locations are likely to come along with different price tags. Other factors which may play a role in your thinking are the facilities that are available at each location, the lease terms that would be in place, and more. Compile a complete list of all of the factors that you want to weigh, and use those as the columns across the top of your matrix to complete the model.

## Putting It to Use

The only reason to make a matrix such as this is to actually put it to use in making your decision. Now that the rows and columns are assembled properly, you are going to place a score in each box as a way of coming up with an overall rating for each location. You can use a scale that makes sense for your purposes, such as 1-5 or 1-10. While you are free to organize your matrix in any manner that you see fit, most people will use higher numbers to indicate a positive attribute. So, for example, a cost score of 5 on the 1-5 scale would mean that the location offers a great value.

Go through and fill out the entire matrix, carefully giving a score to each location for each of the factors that you have weighed. Once finished, you can then decide how you would like to weight each column based on its importance. So, if the cost of the project is the highest priority, you may decide to multiply the cost column by three in order to weight it appropriately. On the other hand, if the length of the lease is not something you are particularly concerned with, you may decide to skip using a multiplier in that column.

To finish off your use of this model, you are simply going to add up the scores that you are left with when all is said and done. As you would imagine, the highest score is going to win.

Of course, that doesn’t mean you absolutely have to pick the location that scores the highest in your matrix, but you will want to have a good reason if you are going to skip over the highest-scoring option for another pick. At the very least, having a completed matrix to present to your superiors or even other team members is a great way to get the discussion started on which option may be best for your needs.

The Decision Matrix Analysis method is one of the best tools available to help you make good choices – and it couldn’t be easier to use. Once you have sketched out one or two of these models in preparation for a big decision, you are likely to make more and more of them going forward.

#### Key Points

• A decision matrix is a list of values in rows and columns that allows an analyst to systematically identify, analyze, and rate the performance of relationships between sets of values and information.
• It can be used when the decision must be made on the basis of several criteria and a list of options must be narrowed to one choice.
• It is useful for looking at a large number of decision factors and assessing each factor’s relative significance.
• For example, where there are X alternative options that each need to be assessed on Y criteria, the resulting matrix will have X rows and Y columns.
• Each of the criteria will be assigned a score, which can then be summed in order to produce an overall numerical score for each option.
• A further refinement is to weight each of the criteria depending on its relative importance.

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