4 decision-making models to apply in your business
By: Emily Finlay
Your job requires you to make dozens of key decisions every day. Some of these decisions might involve only you, but others require input from additional members of your team.
No matter what the situation is, the right decision-making model can help you and your team better understand and analyze a situation better so you can make the best choice in terms of how to address or resolve it.
Decision-making models are processes intended to break down a problem you’re facing, help you and your team identify possible solutions, and guide you to the most effective outcome.
For example, if your team is trying to determine which project management method would work best for your next assignment, you could use a decision-making model to evaluate potential techniques and pick the best one.
Just as there are many ways to approach a challenge, there are also many types of decision-making models. In this article, we’ll take a closer look at four types of decision-making model you can apply to business decisions in order to make choices that lead to better outcomes.
1. The rational model
When the stakes of a decision’s outcome are high, the rational model can be an effective way to work through your options.
This model uses a series of steps focused around data, logic, and analysis (rather than personal opinion or intuition). These steps are designed to help you understand the challenge, define the factors that influence your decision, and compare solutions to find the right one.
For example, if you need to cut back on your department’s spending to meet a new budget, for you could use the rational model to determine which areas make the most sense to trim back on, whether it’s your technology budget, team outings, or making staff reductions.
Steps for following the rational model include:
- Define the problem and desired result. What challenge are you are trying to solve? What result do you want to achieve by making a decision?
- Identify the factors involved in your decision. Determine what specific details you’ll need to consider. For example, are there budget areas you can trim down on that will have little impact on your team, or will you need make vital cuts that may significantly impact morale, which you’ll have to prepare for?
- List your potential solutions. Use the information from the first two steps to identify potential solutions to your challenge, and loop in relevant team members to help you narrow down your list to the most viable options.
- Assess the potential impact of each decision. Vet your potential solutions by thinking about the impact and/or consequences they may have, whether it’s on an individual employee, a team, or the company as a whole. Your ideal solution should have minimal negative impact while still achieving your desired result.
- Make and implement your decision. Using the results from your analysis, determine which option you believe to be the correct one. You may need to loop in key stakeholders and/or executives for approval, but once everyone has signed off, implement your decision and monitor the results.
The rational model isn’t one of the quickest decision-making models out there, so be sure you have enough time to work with before opting to use this model.
2. The intuitive model
Rather than relying on an in-depth analysis, the intuitive model uses pattern recognition to identify the option that will yield the best results. It uses your past experiences with similar goals or challenges to guide you to the right choice.
For example, if you need to assign a task with a short deadline to an employee, you would identify which employee performed best on similar assignments in the past to make your decision.
The intuitive model supports your gut decisions by helping you understand why you’ve chosen a specific solution and what you can expect from your decision based on similar scenarios.
In a survey by Lumen, 89% of managers said they had sometimes used intuition to make decisions, while 59% said they often relied on intuition.
Steps for following the intuitive model include:
- Define the problem. Determine what challenge you need to overcome and/or problem you need to solve with your final decision.
- Identify similar past situations. Take a moment to think about any similar previous experiences you’ve encountered, and what choices or decisions you made—or what factors you used to make them—to resolve the issues.
- Recognize potential biases. Decision-making can be prone to certain biases, such as authority, confirmation, and framing. To ensure your decision is free from certain tendencies or inclinations, solicit feedback from others you trust, and take a moment to reflect on past decisions and how they turned out before you move forward.
- Choose the best solution. Equipped with the information you’ve gathered, make the decision that is most likely to lead to your desired outcome.
- Implement your decision. If your decision had to be made quickly and/or you were not able to involve your team, let them know what you decided (and why) before implementing the changes.
Unlike the rational model, this process can be completed quickly, making it a good choice to use when you need to make a fast decision.
3. The recognition-primed model
The recognition-primed model works similarly to the intuitive model. Rather than just going with the solution that feels best, however, this technique adds an extra step.
Once you’ve identified a solution based on your past experience, you then run a mental simulation of this decision.
The more experience you have with the particular challenge you’re facing, the easier it is to use this model.
In addition to helping you identify the most important parts of the problem, this past experience can prompt you to look for options that are more likely to resolve the challenge.
For example, you can use this model to decide if you can take on a project with a tight deadline. By thinking through the times your team completed projects with similar time constraints, you can determine if you’re capable of meeting these new demands.
Then, you can run a simulation of how you expect the project to go to identify any potential challenges or roadblocks before they occur, which can help make the process smoother and enable you to meet your deadline.
Steps for following the recognition-primed model include:
- Define the problem. As always, you need to know what you need to achieve or resolve before you can determine the right solution.
- Identify similar situations. Think through previous situations that are relevant to the current challenge. How did they turn out? What unforeseen issues did you run into?
You can also review information from past scenarios and the data behind the outcomes, if you have the time.
- Map out multiple solutions. Based on how these past situations unfolded, come up with a few potential solution options.
- Run a mental simulation for each solution. For each option, identify the potential results, impact, and complications/challenges that are likely to occur, eliminating any that won’t work or making necessary adjustments.
- Decide on and implement your solution. Time to see how your solution works in reality! If you weren’t able to involve your team in the process, explain your decision to them and why you made it.
4. The creative decision model
You may not have the real-world experience needed for the last two models. If that be the case, the creative decision model may be a better option.
With this model, you don’t create solutions based on past experiences. Instead, you come up with imaginative ideas and new ways of dealing with a situation, or you decide to try a solution you may have thought of previously but haven’t yet tried.
For example, if you want your team to be number one in sales revenue next month, you could offer incentives to your employees for hitting certain targets, or work with marketing to come up with an exclusive promotional deal.
Steps for following the creative decision model include:
- Define the problem. Since this is an unfamiliar challenge, make sure you’re very clear on the result you want to achieve. Meet with your team to fully outline the problem, and consider consulting with more experienced colleagues to better understand the challenge you’re up against..
- Consider all factors. Do your research to understand every possible factor that might impact this challenge and any potential solution. See if you can identify similar situations that your coworkers may have encountered, what decision was made, and what the result was.
- Identify a viable solution. Decide which decision is the best one for this particular situation.
- Implement your decision. Once your solution is in effect, monitor the outcome to measure how well your idea performed and inform future decisions.
Create better decision-making models with MindManager
MindManager® can be an extremely useful tool for creating decision-making models in your workplace.
It’s an easy-to-use productivity and collaboration solution that enables you to map out every step of the decision-making process visually so you can better understand what factors must be considered in making a choice.
You can create decision-making models in MindManager in several ways:
- Use a mind map to identify the factors you need to consider when making your decision and to understand how each one might affect the desired outcome. Similar templates include radial maps, right maps, and concept maps.
- Develop an idea map to keep track of potential solutions that you brainstorm with your team. Similar templates include onion diagrams, funnel diagrams, and matrix diagrams.
- Create a flowchart to simulate your solution and visualize how it will work in practice. Similar templates include timelines and Kanban boards.
MindManager’s co-edit feature allows multiple people to work on the same diagram simultaneously, allowing you to evaluate all options collaboratively to make quicker decisions.
Creating a visual map of your decision-making process also provides you with a digital template that you can use as a model in the future.