Making the right decisions, especially ones that have a direct impact on your bottom line, can be tough. It's never as simple as writing down a list of pros and cons. Numerous aspects have to be considered. Their varying importance has to be taken into account. When stakeholders participate in the decision-making process there is probably a lot of bias and emotion involved.
Arguably the best way to do important and complex decisions is using the decision matrix technique.
It's exceptionally powerful when you have to choose the best option and need to consider many criteria or when you need to allocate limited resources to multiple choices.
By extensively evaluating your choices and quantifying the process, you'll be able to completely remove emotion and guesswork from the decision process. This enables rational and objective decisions every time.
Moreover, the decision matrix allows a clear structure that you can reference in discussions, meetings, presentations, or when you need to justify your decisions.
The weighted decision matrix is a powerful quantitative technique. It evaluates a set of choices (for example, ideas or projects) against a set of criteria you need to take into account.
It also is known as the "prioritization matrix" or "weighted scoring model". No need to get confused.
There are several types but two main categories: The weighted and unweighted one. The unweighted decision matrix assumes all criteria have the same importance while the weighted one applies different weights.
The decision matrix is extremely useful, specifically when you have:
Many choices (such as different features, projects, and campaigns)
Multiple decision criteria to consider (such as costs, risk, and customer value) with
similar or varying levels of importance
Here's a step-by-step guide to set up both an unweighted and a weighted decision matrix. To make it even simpler, let's use an example:
You're trying to figure out which product feature your team should develop next, but there are plenty of criteria that need to be considered. Start by creating a weighted decision matrix.
1. List different choices
Start by listing all the decision choices as rows. Don't forget any relevant choices, since these rows will form the foundation of your decision matrix.
In our example they are:
Adapt product to the French market
Develop mobile app
User onboarding 2.0
2. Determine influencing criteria
Brainstorm what criteria will affect those decisions (like customer value, cost, effort, and effectiveness, for example). List these criteria as columns.
3. Rate your criteria
Rate each of these criteria in the columns using a number (the weight) to assess their importance and impact on your decision. Establish a clear (and consistent) rating scale for each one (for example, 1, 2, 3, 4, 5 leading from an insignificant to greater impact). This helps to calculate the relative importance of each criterion.
4. Rate each choice for each criterion
Evaluate your different choices against the criteria. While using the same rating system (in our case, from 1 through 5), rate each criterion individually. For example, if you think your mobile app has tremendous business value, give it a 5. (Keep in mind: The values for each choice don't need to be different. Equal weighting is perfectly acceptable.)
For each of these values, you have to make sure that higher values represent more preferable options. For example, a high ROI should lead to a high Business Value score because a great ROI is beneficial to your business. On the other side, for instance, high development costs should result in a low Costs Value because high costs are negative.
5. Calculate the weighted scores
Multiply each of the choice ratings by their corresponding weight.
6. Calculate the total scores
Sum it up for each of the choices and compare the total scores.
7. Make your decision
The choice with the highest score is usually the one you should prioritize.
For a weighted decision matrix to be effective, you need to know how to assign weight to your criteria. We already know that no two criteria will have the same level of importance, so how do we quantify that importance to make informed prioritization decisions?
The criteria you include in the weighted design matrix will vary from product to product.
However, certain aspects, like cost management and ROI, will be consistent throughout.
Say you have a new software product in development. Your criteria would likely look something like this:
Ease of Use
For each of these criteria, you need to identify the most important aspect of the product. To do this and give weight to these criteria, you can use a percentage system to identify the most important aspect. Let’s assume that ease of use is the most important criterion for the product. You’ll end up with a result like this:
Ease of use (40%)
This clearly indicates that ease of use is the main priority. With this example, you should consider each criterion, but the weighted system emphasizes ease of use. After all, what’s the point in packing a product full of great features at a great price if the customer can’t figure out how it works?
You can use the same system with any criteria you choose. Simply start with 100% and assign percentages that reflect the importance of each criterion.
The short answer? No.
Many businesses do use Excel for prioritization because they’re familiar with it and already use it for other tasks. While the program has a wide range of great tools and benefits that can aid prioritization, it’s not the best choice.
For starters, it’s not a purpose-built tool. It simply wasn’t designed to handle prioritization. There are prioritization frameworks you can run in Excel, but you would be far better off with a dedicated prioritization platform (hint: like airfocus). It’s also challenging to keep an Excel spreadsheet updated, especially when you’re trying to collaborate with team members.
To create an effective and accurate weighted decision matrix, you need a purpose-built platform for prioritization and collaboration. A cloud-based platform that smoothly guides your prioritization efforts with purpose-built templates for weighted decision matrix, ICE, RICE, WSJF, and more.
airfocus offers you absolutely everything you need for easy and effective prioritization. We know flexibility's importance, which is why we built the first and only modular product management platform. Whether you’re looking for a simple weighted decision matrix to get you started or if you need something a little more heavy-duty, airfocus is here for you. We have templates, priority poker, user insights, OKRs, and everything you need to standardize your prioritization efforts and make better decisions as a united, collaborative team.
Follow the same steps as for the weighted decision matrix while skipping the third step ("3. Rate your criteria"), that is:
1 - 3. List your choices, determine influencing criteria, and rate each choice for each criterion.
In the unweighted decision matrix, you don't have to define weights for each criterion, so skip Step 3.
4. Calculate the total scores
Instead, each criterion carries the same level of importance. Hence, after scoring your choices, just add up these scores for each one.
5. Make your decision
Again, the choice with the highest score is likely going to be your best option.
Key takeaways "How to set up a Decision Matrix"
Firstly, list your different choices as rows and use your criteria as columns. Then, decide if you want to build a weighted or an unweighted decision matrix.
If you're going to create a weighted decision matrix, add a weighted score to each of your criteria, depending on how important it is, and calculate an overall score (based on the weighted scoring) for each of your choices.
If you want to create an unweighted decision matrix, you will pursue the same approach with the only difference that all criteria hold the same weight (all are of equal importance).
You will be able to get started with a weighted decision matrix now. Before you go ahead, check out these three essential tips to help you avoid common pitfalls:
1. Remove all unnecessary choices
Before you start creating your weighted decision matrix, identify what sort of attributes you think a winning choice requires. Does it need to be a certain amount? Should it be quick or easy? Does it need to align with a certain goal? This way you will quickly eliminate unnecessary options.
2. Rate each criterion separately
When it comes to considering the first criteria, ignore the rest. This will help you make an objective decision, putting these simple criteria into perspective. You'll also be able to make a more unbiased decision when it comes to the score by treating each criterion separately from the others.
3. Keep the Decision Matrix up to date
External realities (like a new competitor), as well as internal goals and conditions of an organization (budget cuts), can change quickly. So, watch out for changes and update your decision matrix regularly to keep your priorities up to date.
The weighted decision matrix helps you to plan, and to communicate your decisions. It will add a whole new angle to your strategic planning process. Also, make sure all the relevant criteria are taken into consideration before making a decision.
If you don't want to create a decision matrix from scratch, feel free to try the airfocus Scoring Board. The airfocus Scoring Board allows you to combine different value types (such as currencies or project hours). Moreover, it enables you to visually map your priorities on a chart and transform your priorities into an actionable roadmap at the click of a button.