Here is a guide to assist in making decisions. This approach is followed by all organisations and businesses when they are about to embark on major projects or undertakings.
There are always many ways or alternatives to achieving a set of goals. The ability to identify different alternatives and choosing the 'best' alternative requires discipline, creativity and structured analysis.
Many people make decision mistakes because they lack discipline and do not properly identify and evaluate alternatives before doing things. Their 'Just Do It' approach is dangerous and can be costly later.
Each alternative has costs/benefits and risks that should be properly understood and compared against other alternatives in a structured manner. The guide here provides some structure to that analysis and decision making.
Only when one do a good job understanding different alternatives can one make good and effective choices - i.e. attain Level 3 in life. (http://cckplanetblog.blogspot.com/2012/01/2-pieces-of-paper-for-life.html)
Another helpful tool is 'Question 3 Levels Down' when trying to find things out or understand things better (http://cckplanetblog.blogspot.com/2012/01/question-3-level-down.html)
STEPS TO FOLLOW:
1. List out the end goal(s) i.e what one wants out of the project or undertaking
2. Identify alternative ways/paths to achieve those end goal(s)
3. Determine other evaluation criteria that are important to making the right decision. It includes consideraions like costs and benefits (see notes below)
4. Evaluate how well each alternative perform against or meet each evaluation criteria (as compared to other alternatives)
TEMPLATE OF ANALYSIS TABLE FOR DECISION MAKING:
Evaluation Criteria .............. Alternative 1 ........Alternative 2 ........ Alternative 3
GOALS:
- goal 1 .............................................. Hi ............................. Hi .............................. Med
- goal 2 .............................................. Med ......................... Med ........................... Low
TANGIBLE COSTS / BENFITS ($) :
- cost 1 ................................................ ? .................................. ? ............................... ?
- cost 2 ................................................ ? .................................. ? ............................... ?
- benefit (income) 1 ........................... ? .................................. ? ............................... ?
- benefit (income) 2 ........................... ? .................................. ? ............................... ?
NET COST / BENEFIT .................... ? ................................. ? ............................... ?
INTANGIBLE COSTS / BENEFITS :
- intangible cost 1 .............................. Hi ................................ Med .......................... Low
- intangible cost 2 .............................. Low ............................. Hi ............................. Med
- intangible benefit 1 ......................... Med ............................. Med .......................... Low
- intangible benefit 2 ......................... Hi ................................ Med ........................... Hi
RISKS:
- risk 1 ................................................... ? .................................... ? ................................ ?
- risk 2 ................................................... ? .................................... ? ................................ ?
Explanation of Terms:
Goals - the ultimate aims or objectives of the undertaking (always start with the end in mind).
Alternatives - different ways or paths that will accomplish the goals.
Tangible costs/benefits - things that you can put a monetary value to e.g cost of food or accomodation, fees, income etc.
Intangible costs/benefits - things that you cannot put a monetary value to but is nevertheless important to be considered in the decision making. Since you cannot put a value to an intangible item, assign a 'relative score' for each alternative (relative to the other alternatives).
Opportunity Costs - value of something you forgo or give up on if you pick an option. E.g. if you spend $100,000 on something instead of investing it, your opportunity cost for spending that money is the investment income you'd forgo (if you have invested that money instead of spending it)
Risks - potential risks associated with an alternative. See Understanding and Managing Risks http://cckplanetblog.blogspot.com/2012/01/life-is-all-about-understanding-and.html
Evaluation Criteria - the goals, cost/benefit items and risks that one has to consider and analyse as part of the decision making process. Each alternative is evaluated in terms of its impact on or ability to meet each evaluation criteria.
Why Do People Do Analysis Using Such a Tool?
Thoroughness: to capture all inputs & views - there are always many things (evaluation criteria) to consider when making major decisions. In addition, there may be different views or inputs from many people either because they have 'interests' in the undertaking or because one has consulted others for their views. It is not possible for one to remember everything. Putting all those different input/views on paper ensures that all input are not 'forgotten' as one progress with analysis work. (One's precious brain resources are better used on information gathering and analysis work instead)
Framework for comparing alternatives - the template provides a framework to make sure that the decision maker evaluates how each alternative perform against every evaluation criteria so that a 'fair comparison' can be made. Some times unstructured decision makers apply a criteria to some alternatives but do not apply it on others resulting in unfair comparison or incomplete analysis.
Avoid confusion - because there may be many goals, alternatives, evaluation criteria and input (from many people) involved in a big project, the tool ensures that all are captured and considered. That way, the analyser or decision maker would not be confused (or 'gabra') every time something 'new' comes along (like some one giving a new input). If an important new input is received, the decision maker can quickly review the new input against what is existing in template to see if it is already captured/addressed. If not, new input is added and evaluated.
Easy Review - With all key evaluation criteria, findings and comparisons put in one piece of paper, it is much easier to review one's analysis work when required. That includes reviewing it with other people with interests in the project (one does not need to talk and talk or repeat one's findings again and again with different people)
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