How to Make Good Decisions

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Many books articles and other guidelines have been written about the decision making process. We are taking decisions probably every single minute during the day. But the process of making decisions still seems to be often difficult and intuitive, especially when all alternatives have a catch. Below methods can help 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

The list of pros and cons can also be created as a table with three columns. In the first column everything that speaks in favor of a decision is listed up, in the second column are the counter-arguments, and in the third column ideas and questions can be arranged.

Decision Matrix

The easiest way to compare alternatives is again a tabular overview. Provide a separate column for each alternative. Then determine evaluation criteria for the options. Then note points or grades in the columns that show 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. Criteria that must be met are listed at the top of the list. If a single disqualifier criterion is not met by one option, such option shall be eliminated. 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 with. 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.

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