What is a Decision Matrix?
A Decision Matrix is, as its name implies, a Matrix that helps people decide which option among several they should choose.
- It is generally used to make an objective decision about something.
It evaluates the different options by analyzing the factors considered most important to decide which alternative would be the best.
How do you create a Decision Matrix?
The Key to developing an effective Decision Matrix is Choosing the Right Metrics to be evaluated.
Based on our experience, we suggest using OSBE Metrics:
- Equally Important.
Objective: Metrics should evaluate Characteristics, not Opinions.
- Avoid to Quantify Subjective factors.
For example: Instead of asking “Is he Tall?”, you can ask “Is he taller than 1.85 m?”
Singular: Metrics should evaluate Unique and Defined Factors.
- Evaluating Complex concepts, end up being Inaccurate and Subjective.
For example: Instead of asking “Is a powerful car?”, ask for “+ 300 horsepower?”, “+ 8 V?”, etc.
Binary: Metrics should be able to be evaluated just with 1 and 0 values, when possible.
- Yes/ No, Have/ Not Have, offer much more Objectivity than Rankings.
For example: Instead of asking “Is it a fast Computer?” ask “Does it have + 12 GB of RAM?”.
Equally Important: All the Metrics considered should be Equally Important.
- Weighting the factors is usually done subjectively.
For example: Avoid Metrics of little importance and break down those that are very important into several factors.
Standard Decision Matrix.
The best way to understand How to create an effective Decision Matrix is through a practical approach.
That is why we have prepared many Examples so that you understand how to do it:
Decision Matrix Examples
We have chosen 5 examples of different situations where a Decision Matrix can be of great help.
Since a Decision Matrix can be as large as you want, we have used reduced Matrices so that we can focus on what is important:
- The Metrics and How the Matrix was built.
Starting a YouTube Channel - Decision Matrix example
In this example we’ll imagine that you are decided to start your own YouTube channel.
- However, you are not sure what Topic to focus on.
There are 4 Topics you love.
- However, you’re not an expert in some of them.
Also, becoming an expert on certain topics can be more difficult than others.
After some research, you decide to elaborate a Decision Matrix:
We are aware that some of these Metrics seem not to be Singular, or Objective.
But it is just the name we had to use.
- Let’s explain them in more detail:
Expert: If you know the Subject deeply. It is a Yes or Not Question.
- You consider yourself to be an Expert if you have received Professional training.
Like it: If you are passionate about the Topic or you are Driven by its profitability.
- You consider that you like a Topic if you dedicate more than 1 hour a day to it, for pleasure.
Profits in 3 months: If the Topic, on average, can be profitable in less than 3 months.
- According to your research.
< 50 Channels: It evaluates numerically if there are not a lot of Competitors.
- This number could be 50 channels with less than 100K subscribers on average.
Easy: If the estimated time it would take to master a subject is less than 30 hours.
- Although it seems a Subjective Metric, it is not.
After evaluating all these Metrics, you are sure what your YouTube Channel will be about:
- Movies Reviews.
Opening a Restaurant - Decision Matrix example
In this example, we’ll imagine that you want to Open your own Restaurant.
- The problem is: You don’t know what kind of Restaurant to Start.
You are an experienced Cook but you don’t know what to Focus on.
- If you want a successful Restaurant, you need to be Specialized.
After some research, you decide to develop a Decision Matrix:
Let’s explain the Metrics employed:
Expert: You consider yourself to be an expert if you have cooked those dishes professionally.
- In a Restaurant.
Adapted: If the Restaurant you own or plan to Rent can cook those dishes with the current Kitchen.
- Some dishes, are easier to cook than others; Pizzas need big ovens while Burgers don’t.
Cheap Kitchen: Whether the necessary kitchen utensils are cheap or not.
- Kitchen Costs can skyrocket.
Only in Town: If it would be the only Restaurant in Town specialized in that type of food.
- You Plan to Open the Restaurant in a Small Town close to a big city.
Popular: You consider it Popular if the Interest on Google Trends is higher than 50 in that region.
- Comparing the interest in the 4 types of food with each other.
- If you are interested in How to do this, check our “How to use Google Trends” Page.
After comparing the results obtained, you are decided:
- You’ll open a Restaurant specialized in Ribs.
e-Commerce - Decision Matrix example
In this example we’ll imagine that you are planning to start your own e-Commerce Site.
- Again, the problem is: What to Focus on.
In the Past, you have bought and sold some of those items as a hobby.
Now, you want to start your own Business.
Therefore, you decide to develop a Decision Matrix, to make the best decision:
Expert: If you have ever obtained more than $1,000 in profits in the past with that Product.
- Buying and Selling it.
Like it: If you dedicate more than 1 hour per day to that item for pleasure.
- Learning new things, trends, etc.
Easy: If you would have to dedicate more than 30 hours to learn How to operate in that Market.
- Where to buy, sell, best suppliers, travels if necessary, etc.
Less than $3.000: If you would need less than $3,000 to Start operating in that Market.
- It is your maximum desired budget.
Margin > 10%: If the average Margins in that Sector are higher than 10%.
- You do some research to find out this.
Your Decision Matrix is clear:
- You should create a Site specialized in T-Shirts.
Buying a House - Decision Matrix example
In this example we will assume that you are thinking of buying a House.
- * I personally developed a Decision Matrix to do it. Not joking.
After seeing a dozen houses, you hesitate between 4 of them.
That is why you decided to develop a Decision Matrix:
> 120 sq meters: You are planning to have children so, you need space.
- 120 sq meters is the minimum you need.
Big Kitchen: You consider a Big Kitchen if it has more than 15 sq meters.
- The Kitchen tends to be the heart of a Home so, you value its Size.
< 1km to the City Centre: You want your Home to be close to the city centre.
- You want to be able to walk downtown.
< $300 K: This is your maximum desired price.
- This is the maximum amount of money you would like to spend.
Parking: If the Home has its own Garage.
- There are many Parking lots near the 4 Houses but your own Garage is a good point.
After careful thought, the Decision Matrix helps you make the final decision:
- You’ll buy House number 2.
* In Real Life you would only need One Metric: The House your Wife likes the most.
- Just Kidding… Well… No.
PlayStation 5 vs Xbox X - Decision Matrix example
In this example, let’s imagine that you don’t know which game console to buy:
- The PlayStation 5 or the Xbox series X.
Therefore, you decide to use a Decision Matrix:
Full Retro: You consider the console Full Retro if its old games are 100% compatible.
- You have the PlayStation 2, the Xbox, etc. So Retro-compatibility is welcome.
Power: The most powerful Game Console will get a 1.
- The Least powerful machine will get a 0.
Controller: The Game Console with the Controller you like the best will obtain a 1.
- The other will get a 0.
Design: The Game Console that combines the best with your TV cabinet will obtain a 1.
- The other will get a 0.
Catalog: You have listed your favorite Game franchises.
- If the console is expected to release a title of at least half of them, it will score a 1.
As you’ve probably noticed … We’re not exactly experts on current Game Consoles.
- The last Game Console I personally owned was a PlayStation 2…
Also, “Controller” and “Design” Metrics are pretty Subjective.
However, you get the point: According to these Metrics, you should buy the Xbox series X.
- Not sponsored, by the way.
A Decision Matrix is a Matrix that helps people decide which option among several they should choose.
- It evaluates the different options by analyzing the factors considered most important to decide which alternative would be the best.
The Key to developing an effective Decision Matrix is Choosing the Right metrics to be evaluated.
Based on our experience, we suggest that your Metrics be:
- Objective: Metrics should evaluate Characteristics, not Opinions.
- Singular: Metrics should evaluate Unique and Defined Factors.
- Binary: Metrics should be able to be evaluated just with 1 and 0 values, when possible.
- Equally Important: All the Metrics considered should be Equally Important.