How to use a weighted decision matrix

What is a weighted decision matrix?

The weighted decision matrix helps individuals and organizations make objective decisions by considering various factors and assigning weights to prioritize these factors. 

• Scenario: A company is considering different suppliers for a crucial product component. The decision makers must evaluate price, quality, reliability, and customer service. Each factor is assigned a weight based on its relative importance to the company’s goals and objectives.
• Key factors: Price may be assigned a weight of 40% because the company is particularly cost-sensitive. Quality may be assigned a weight of 30% because the component’s performance is critical to the product’s functionality. Reliability may be assigned a weight of 20% because the company values suppliers who consistently deliver on time. Customer service may be assigned a weight of 10% because the company wants to work with suppliers who provide excellent support.
• Result: Once the weights are assigned, the decision makers can evaluate each supplier against these criteria and assign scores accordingly. The scores are then multiplied by the corresponding weights and summed up to obtain a total score for each supplier. The supplier with the highest total score is deemed the most suitable choice.

The importance of a weighted decision matrix

So, why does your team need a weighted decision matrix? Well, decision making lies at the heart of every organization, guiding strategies and influencing outcomes. It involves assessing available options, evaluating potential consequences, and selecting the most advantageous course of action. 

According to a 2023 Oracle survey, which involved over 14,000 participants from 17 countries, 74% of respondents reported a 10-fold increase in daily decisions over the previous three years, with 78% overwhelmed by data from numerous sources. 

Business decisions have wide-ranging implications, impacting day-to-day operations, long-term goals, and overall profitability. Effective decision making enables companies to seize opportunities, mitigate risks, and stay ahead of the competition. Conversely, poor decision making can result in missed opportunities, wasted resources, and even business failure. That’s why mastering the art of decision making is so crucial for any business leader.

The 3 components of a weighted decision matrix

What are the best ways to effectively maximize the weighted decision matrix? It all comes down to three key components:

1. Identify the alternatives

Let’s say you’re a business owner deciding on a new service. Your alternatives might include services catering to various customer needs or market trends. Another example could be when considering the courses of action for a company’s expansion plans; the alternatives could range from opening new branches in different locations to exploring partnerships with existing businesses. Each alternative brings advantages and challenges, making it vital to consider all possibilities.  

Here’s how to approach it:

• Start by jotting down every potential option, no matter how “out there” it may seem.  
• Align your alternatives with your company’s strategic objectives.  
• Bring in perspectives from different team members, stakeholders, or even customers.  
• With your list of options, do some digging.

Wrike’s Board view feature can be especially useful when identifying alternatives for your decision matrix. You can create a dedicated Kanban board, where each column represents a different category or criterion important for your decision. For example, if you are deciding on software solutions, columns could include criteria like cost, user-friendliness, integration capabilities, and customer support. Team members can add comments, attach files, and vote on each card. This interactive aspect ensures that all perspectives are considered, making it a comprehensive tool for group decision making.

2. Determine the criteria

This stage identifies the attributes that will guide your decision, whether you’re choosing a new vendor, deciding on a project approach, or selecting new software for your business. Consider all the possible factors that could influence your decision initially. List everything that comes to mind, from cost and time efficiency to scalability and user support. At this stage, more is better — you’ll refine your list to the most critical points later.

For instance, if the decision involves selecting a supplier for a manufacturing company, the criteria could include factors like:

• Price competitiveness
• Product quality
• Delivery reliability
• Customer service

By defining clear criteria, decision makers can ensure that all aspects important to the decision’s success are considered.

Always make sure your criteria are measurable. Vague criteria lead to subjective assessments, which can undermine the objectivity of your matrix. Instead of generic terms like “cost-effective,” specify what cost-effective means numerically, such as “under $10,000 initial cost.” Measurable criteria make the later stages of scoring each option straightforward and defendable.

You can use an analytics board in Wrike to generate detailed reports on different aspects of your projects or operations. For instance, if one of your criteria is project performance, you can use analytics to pull historical performance data on similar projects. This information can help you identify which performance metrics (like completion time, budget adherence, or quality scores) should be included as criteria in your decision matrix.

3. Assign weights to each criterion

For this stage, you need to guess less and think more about what factors align with your business strategy. Begin by revisiting your business or project goals. What’s most important for this particular decision? 

If you’re choosing a new software system, perhaps integration capability with existing systems is more important than the upfront cost. A common approach uses a numerical scale, like 1-10, where 10 represents the highest importance. Each criterion is assigned a weight based on its importance to the success of the decision. For instance, if timely completion is essential for your project’s success, you might assign a higher weight to the “project timeline” criterion.

This isn’t a one-person show! Get input from various stakeholders who will be affected by the decision. This helps ensure that the weights reflect a comprehensive view of what’s important to the business. 

Custom workflows in Wrike allow you to standardize the process by which criteria are weighed across different decisions, with a separate status for each stage of the process. This is particularly useful in larger organizations where multiple teams or departments may use the decision matrix independently. Standardizing this process ensures consistency and fairness in evaluating decision criteria across the organization. You can also automate parts of the weight assignment process based on predefined rules that reflect your business priorities.

The 3 steps to using a weighted decision matrix

How do you use the weighted decision matrix to facilitate decision making? It’s as easy as 1-2-3.

1. List down the options

First things first, gather your team! Decision making is often best as a team sport. Bring together people from different departments or areas of expertise. Each person can offer unique insights or options that you might have yet to consider on your own. This brainstorming session is your chance to throw out every conceivable option, no matter how left-field it might seem.

Next, make sure to frame the discussion around your end goal. What are you trying to achieve? Whether choosing a new IT system, selecting a marketing strategy, or deciding on a new product launch, having a clear goal in mind will help focus your list of options and ensure they are relevant. Ask questions like: 

• What are we really aiming to improve? 
• Who are the stakeholders involved?
• What are the timelines for the project?
• What does success look like for this project?
• What are the potential risks associated with this project?
• Are there external factors or trends that could influence the project?

As you list these options, start categorizing them based on cost, feasibility, or time to implement. This preliminary categorization can help when you need to assign weights and scores in later stages.

2. Score each option

Assign scores based on how well each option fits each criterion. The scores can be assigned on a numerical scale, 1 to 10, or through qualitative descriptors, such as poor, fair, good, or excellent. For example, if cost-effectiveness is a criterion, an option that is the least expensive while still meeting all your needs might score a 10, while a more expensive one might score lower.

Whenever possible, base your scores on objective data. If one of your criteria is the speed of implementation, look at historical data to see how long each option has taken to implement in similar situations. This approach removes much of the subjectivity and makes your decision more defendable.

3. Calculate the weighted scores

After scoring each option against the criteria, the weighted scores need to be calculated. This is done by multiplying the score of each criterion by its assigned weight and summing up the weighted scores for each alternative. The result quantitatively represents each option’s overall desirability based on the defined criteria.

For instance, if you evaluate different project proposals based on cost, timeline, and feasibility, you would assign weights to each criterion based on their relative importance. Then, you would multiply the score of each criterion by its weight and calculate the weighted score for each proposal.

Advantages of using a weighted decision matrix

Using a weighted decision matrix can shine a light on your decision-making process, especially when you’re faced with several good options and need a clear way to determine the best one. The weighted decision matrix helps you:

• Lay out your options in a structured format, making it easier for everyone involved to see why certain decisions are made
• Break down complex scenarios into a series of smaller, straightforward evaluations
• Facilitate consensus by using a quantitative approach to evaluate options
• Prioritize what’s most important to your project or organization, ensuring that the most significant elements are considered appropriately
• Reduce bias by focusing on established predefined criteria and weights before assessing the options
• Build trust and confidence internally (employees) and externally (investors)
• Provide a clear audit trail explaining why a particular option was selected over others

Potential limitations of a weighted decision matrix

While a weighted decision matrix is a powerful tool for rationalizing complex decisions, it has limitations. Understanding these potential drawbacks can help you better prepare for and mitigate them in your decision-making process. Let’s discuss some of these limitations:

Subjectivity in weighting and scoring

Despite its structured approach, assigning weights and scores can still be subjective. Different team members might have varying opinions on the importance of criteria or how well an option meets these criteria. This subjectivity can influence the outcome, potentially leading to biased or skewed results.

Complexity with too many options or criteria

The matrix can become overly complex and challenging to manage when there are too many options or criteria. This complexity might make the decision-making process cumbersome and overwhelm decision makers, potentially leading to analysis paralysis, where no decision is made due to an overload of information.

Overemphasis on quantifiable information

The matrix relies heavily on quantifiable data for scoring options. There’s a risk of oversimplifying the scenarios by reducing them to numbers. This focus might lead to the undervaluation of qualitative factors, such as team morale, customer satisfaction, or brand reputation, which are harder to quantify but equally important. This can lead to missing important nuances, especially in complex decisions where the context and subtleties play a significant role.

Inflexibility to change

Once the weights and scores are set, the matrix does not easily accommodate changes that might arise from new information or changing business environments. This rigidity can be a drawback in dynamic sectors where flexibility and adaptability are key.

How to make better decisions using Wrike

If you’re managing multiple projects with numerous variables under consideration, choosing workflow automation software like Wrike ensures that every decision you make drives your projects toward success. Everything from project timelines to resource allocation is centralized. This makes it easier to assess different options as you have all the necessary information at your fingertips. You can quickly compare different project scenarios, check status updates, and gather input from all stakeholders in one place.

Communication lags often delay decision making. Wrike cuts down these delays by enabling real-time collaboration. Team members can discuss, vote on options, and provide feedback directly within the platform. You can customize your workflow, set up stages for each decision point, and automate notifications for each step. 

Within Wrike, you can easily create folders for each decision or matrix. These folders can serve as a place to store decision criteria, option evaluations, and even your final decisions. And when it comes to the other documents and processes your business uses regularly, we have you covered with ready-built templates. 

This decision is an easy one — start your free trial of Wrike today.