A decision matrix is a practical tool for making informed choices by comparing options based on predefined criteria.

Suited for business leaders, managers, and decision-makers, these matrices are essential for optimizing resources and minimizing risks.

This article covers an easy guide to walk you through creating and effectively using a decision matrix for your business.

Stay tuned!

The decision matrix is a tool that promotes the decision-making process, evaluating and prioritizing the best choices through multiple alternatives. It’s a simple business and management instrument that allows a multi-criteria decision analysis, primarily used in business strategy and product development.

It consists of rows and columns that include options and criteria, which turn into decision matrices after having all the data to be evaluated to make a final decision.

This document is part of the MAUT (Multi-Attribute Utility Theory) tool, which embraces multiple solutions to help businesses make decisions without negative consequences.

The decision matrix process follows three steps:

1. List in the columns all your options submitted to evaluation criteria.

2. Identify each option and give them an important factor.

3. Give a weighted score according to the essential criteria.

After this, you will find the best solution for your issues and reduce decision-making time response.

You should use decision matrices only when you need help to make a final decision when a problem is presented.

But this doesn’t apply to all sorts of issues. For example, you wouldn’t prepare a matrix only to determine how many apples you need for the week, do you?

Here’s a good decision matrix example:

You watched a movie saga with a friend and want to decide which is the best. You prepare a simple decision matrix that includes the columns with the movie names and rows with their attributes like:

• Direction

• Script

• Soundtrack

• Quality

• Cohesion

The tool should look like this:

You evaluate them in 1-5 criteria, where one is the worst and five is the best.

After discussing the movie attributes and giving a score to each movie, you sum each column's value and end up with the final score. The final results show that Movie 2 is the best option in the saga based on your preferences.

Asked Questions Before Setting Up a Matrix

There are a few questions you should consider when building your decision matrix. For example:

• Are you going to evaluate multiple options?

• Are they similar to each other?

• Will you have to erase choices if they aren’t the best for your business?

• Are multiple criteria necessary to make a decision?

You need a decision matrix if you’ve answered yes to at least one of the questions above. 

Check the benefits and drawbacks of using decision matrices before you start preparing yours for decision-making processes.

The decision matrix method removes the burden of uninformed business decisions, but it still has drawbacks that you should consider as a business owner.

Before starting your decision-making process, you should know about the six types of decision matrices.

Let’s break them down.

Simple Decision Matrix

The simple decision-making matrix uses numerical scores to compare multiple alternatives. It's a to-do list that uses columns and rows with a scoring system to separate important factors. 

Eisenhower Matrix

The Eisenhower matrix is an urgent decision-making table that uses time and task management elements to prioritize activities.

This decision matrix analysis bases its solutions on four types of urgency and importance. Those are: 

This decision-making tool ensures you have enough time and effort left to focus on the tasks with important criteria while delegating to others or planning ahead of time.

Analytical Hierarchy Process (AHP)

This tool takes sound decisions to a new level of complexity. It compares an existing conclusion, options, and certain criteria while adding a deeper analysis level.

The AHP follows a pair comparison methodology, which allows stakeholders and decision-makers to make specific considerations while understanding their goals better. Compared to other tools with weighted scores, it doesn’t give you a final decision.

Instead, it opens the way and gives equally important choices so you make the call based on your goals. 

Weighted Decision Matrix

A weighted decision matrix adds more difficulty to the decision-making process. There are more than four categories, each with a weight and score assigned. The best decision has more weight and a score at the end.

When you use a decision matrix like this, you must consider multiple scenarios and backlogs that include: time, impact, reach, and effort. This translates into better decisions.

Pugh Matrix

A Pugh matrix analysis – AKA a problem selection matrix – includes a referential element to your evaluations. This makes it a more accurate analysis.

This tool also prepares a benchmark that you use to compare the other options and choose the one with more scores. 

Decision Tree

The decision tree matrix is a complete analysis that uses sequential dependencies to find a solution. This tool showcases different decisions to make and aligns them to outcomes in a tree-like shape.

Each node is a weighting factor and a choice stakeholders can make, while the branches are consequences of those actions. 

Building a decision matrix table with a predetermined scale or multiple choices. It’s not difficult, but it requires you to follow seven easy steps:

1. Identify an objective: Establish a clear goal you want to evaluate. This can be a project’s final result, a choice, or any other thing subjected to evaluation.

2. Set up criteria for the decision grid: Set up evaluation criteria and measures to find the best decisions.

3. Assign a score to the selected criteria: Give relative importance to help you determine and calculate different choices.

4. Choose a scale: Determine a scale to find priorities and object suitability. It can be qualitative (good, bad) or quantitative (1-10) rank.

5. Analyze different factors: Measure each possibility according to your criteria and grid. Allow stakeholders to give them a scale and evaluate their options.

6. Find the best option: After having a value for each possibility, sum the total score based on your selected scale. This will be the last step before you make a final decision.

7. Find the final choice: This is the last step. Do a final review with stakeholders, count the numbers, find the highest score, and make the right decision.

The decision matrix follows a straightforward process. Still, it will help you boost productivity and make important decisions before applying it to your business.
 

Now that you know how to create your matrix to start evaluating different options, you need a productivity tool to make it.

There are plenty in the market, but if you have a Windows computer, you already have one installed that you probably have ignored: Microsoft Office.

The Microsoft Office 2021 suite offers you tools like Excel and Word to help you with your daily job tasks. You can prepare various documents and use charts, formulas, colors, and fonts to make your matrices more intuitive. This will reduce decision-making time as you find better ways to present information.

You need an official license to use this software. That’s why RoyalCDKeys brings you MS Office CD keys at a low cost. This allows you to start building solution matrices for your business and pay peanuts for a software license worth $250 on the official website.

A decision matrix analysis template allows you to reduce the time creating your document from scratch while focusing on what matters most: considering all the options available to make an informed decision.

That’s why we’ve brought different options you can use on your evaluations:

Template #1

Weighted Decision Matrix Template - Download Link

Template #2

Unweighted Decision Matrix Template - Download Link

Template #3

Decision Pugh Matrix Template - Download Link

The decision matrix has emerged as an essential tool for making well-informed choices in a structured organization. As you integrate it into your decision-making process, it will turn into a more reliable instrument to speed up your projects.

The matrix's strength lies in its simplicity and adaptability. Continually refine the criteria and remain open to feedback to ensure that your decision matrix remains a relevant and powerful ally in achieving your organization’s objectives.

We have provided you with helpful templates to download to evaluate many criteria and make the best choice for your business. Use them!