5 decision-making models to try if you’re stuck
Beware of the biases that can lead to bad decisions
Decisions, decisions. By some estimates, we make 35,000 conscious choices daily.
That number might even be inching upward thanks to the rise of flatter organizational structures, which decentralize decision-making. Instead of top leaders making every call, employees at all levels have the power to make more decisions, and they are more likely to happen collaboratively.
All of this means good decision-making skills are more important than ever. However, making high-quality decisions, and making them efficiently, isn’t easy. If your team struggles to decide even where to order lunch, you know this firsthand.
But what if you had a toolkit to help you make better and faster decisions? And we're not talking about a Magic 8-Ball and a coin to flip. These tools are called decision-making models. Several models have been identified, but none of them is foolproof. You'll want to draw on different models in different situations.
Besides becoming familiar with decision-making models, you should also get to know the biases that can lead you to make bad decisions. If you've decided you're ready to dive in, let's get started.
Rational decision-making model
Do you need to make a complex, high-stakes choice? Are you making this decision with other people? Are there strong emotions around the different options? And do you have the time for serious thought and research?
Then you’ll probably want to consider using the rational decision-making model. It has six steps:
- Define the problem
- Identify the criteria you will use to judge possible solutions
- Decide how important each criterion is
- Generate a list of possible alternatives
- Evaluate those alternatives
- Determine the best solution
(Some sources identify additional steps, such as testing your solution before fully implementing it.)
The rational model counteracts a lot of the factors – like faulty assumptions – that can lead us to bad decisions. It can minimize risk and uncertainty. This model is also one you can use on your own or as part of a team.
However, it's not the best model to use when you're under time constraints or in a fast-changing situation. It's also important to remember that you won't always have all the information you need to use this model. And, even if you do, going through the full process isn't efficient or necessary for some decisions.
Bounded rationality decision-making model
And that sets us up to talk about the bounded rationality model. You may have also heard this model called "satisficing." Instead of rigorously seeking the best possible decision, you're just looking for a "good enough" decision.
You can use bounded rationality when you don't have enough time or information to follow the full rational decision-making model. Sometimes it's better to have a good enough decision sooner vs. a "perfect" decision that's delayed. And it burns a lot less mental energy and other resources.
To help you deal with all the information you have to process and all the decisions you have to make in a day, your brain likes to take shortcuts.
Vroom-Yetton Decision-Making Model
There's no one ideal process for making decisions. Instead, the best process to use will change based on your situation.
That's the idea behind the Vroom-Yetton decision model (sometimes known as Vroom-Yetton-Jago). The first part of this model uses seven yes-or-no questions. Here's an example: "Is team commitment to the decision important?"
Your answers to the questions then guide you toward one of five decision-making processes to use. Options range from making the decision based on what you know now without consulting your team to reaching a group consensus with your team.
The flexibility of the Vroom-Yetton model is one of its strengths. Anyone at any level can use it, and it can work even if you're in an unfamiliar situation. However, it doesn't consider personal factors for the decision-maker, the questions may not be precise enough for some situations and it may not work as well for larger groups.
Intuitive decision-making model
You might be surprised to learn that even when you make a decision intuitively or instinctively, you're still following a decision-making model. Intuitive decisions can happen almost instantly. But that doesn't mean they just pop into your head. Your brain is actually doing lightning-fast pattern recognition. It's quickly reviewing everything you've learned from similar past situations to help you make a decision in your current situation.
Researchers have found that an intuitive decision-making model yields good results when you're dealing with areas where you have a lot of expertise or experience. But going with your gut is less effective and efficient when you're in an unfamiliar circumstance, like a new job. This is because you don’t have enough experience to quickly recognize patterns yet.
An interesting side note here: Sometimes a decision that we think is rational and logical is actually a lot more intuitive. If you've considered additional options only to go back to your initial choice, you may have been following the retrospective decision-making model.
Recognition-primed decision-making model
The recognition-primed model has a lot in common with the intuitive model. Here's how it works:
- The decision-maker recognizes a pattern in available information.
- They then pick a course of action and run through that "action script" in their mind.
- If the action script seems like it will work, the decision-maker moves forward. If it doesn't seem like it will work, the decision-maker either tweaks the script or ditches it and starts over with a new script.
Like the intuitive model, the recognition-primed model works best in situations where you can draw on deep experience or expertise. In those cases, it's an especially handy model to use when you're under time pressure.
Common decision-making biases
Now that you know a variety of decision-making models, deciding should be a snap, right? Well, not quite. To help you deal with all the information you have to process and all the decisions you have to make in a day, your brain likes to take shortcuts. Sometimes those shortcuts are helpful. But sometimes they can lead to really lousy choices.
Be alert for these common mental biases any time you make a decision. Even just knowing that they exist and that you are vulnerable to them can help you make better decisions.
Confirmation bias means paying attention to evidence that confirms your beliefs – and ignoring anything that doesn't. Let's say you're helping choose someone to fill a new position at your organization. The process is down to the two finalists. Based on their resumes, you prefer Candidate B over Candidate A. But you're keeping an open mind.
Or are you? During their interviews, confirmation bias could cause you to pay attention to anything that shows Candidate B is an amazing fit for the role, while ignoring possible red flags. Meanwhile, during Candidate A's interview, you gloss over answers that point to them as the better choice, while seizing on any information that could be a bad sign.
Confirmation bias causes us to seek out information that supports our existing views. But it also encourages us to interpret information in a way that proves we're right. Thanks to confirmation bias, two people with different beliefs could draw different conclusions from the same set of statistics.
To outsmart your confirmation bias, seek out people and information sources that challenge your opinions, even if you're already sure that "all the evidence" supports what you want to do. You might be surprised that things aren't so cut and dried.
The availability heuristic leads us to make decisions based on how easily something comes to mind. For example, if your friend just went through a long flight delay with an airline, the availability heuristic could cause you to avoid that airline for your upcoming business trip – even though it actually has a better on-time record than the carrier you ultimately choose. Because you can quickly recall your friend's experience, you overestimate how likely future flight delays are with that airline.
The availability heuristic can really trip us up because our thoughts feel like reality. But you will make better decisions when you can pause, second-guess yourself, and see if there really is information that supports your perceptions.
The survivorship bias causes us to make decisions based only on examples of success – all while assuming that we have the full story.
A common example of the survivorship bias is using other organizations' success stories to decide what your organization should do. Sure, Company A may have succeeded wildly by using a particular strategy, and everyone is singing their praises. But what we hear less about is that Companies B, C and D used the same strategy and now they're out of business.
To avoid survivorship bias, train yourself to be more skeptical. Before making a decision based on success stories, ask yourself whether those stories are taking only the "survivors" into account.
Confirmation bias causes us to seek out information that supports our existing views.
Anchoring bias causes us to use an initial piece of information to make subsequent judgments. For example, the initial price offer sets the course in a negotiation. But even being exposed to an arbitrary and random cognitive anchor can affect your choice. In one study, participants spun a roulette-style wheel and then were asked to guess the percentage of U.N. countries that are in Africa. Those who got a high number on their spin guessed higher percentages.
The anchoring bias is another good reason to slow down your decision-making process when possible. By being aware of how vulnerable humans are to this bias, you have a better chance of recognizing when you need additional information.
We all know the power of first impressions, but we often overlook just how powerful they can be. We think we're hiring a contractor because he's intelligent and organized. However, we might just be assuming all of that because he's tall or has a firm handshake.
That's the halo effect in action. It works in reverse, too. If someone spills wine on you at a networking event, you're probably going to put less stock in the opinions they share later.
Stay vigilant to your brain's efforts to save labor with the halo effect. When you're making a decision, ask yourself whether you are basing it on a first impression. What additional evidence do you have for believing or doubting that impression?
Need more decision-making tools?
Before we wrap up, we want to leave you with a few more resources that can help you make decisions with others.
- We love using the DACI framework for creating urgency and accountability with group decisions, no matter which decision-making model you're using.
- If you find that your group decision-making is getting off track, we've got some tips for getting things moving again.
- You can also use Confluence's decision template to improve communication around decision-making with your team.
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DACI: Decision documentation template
Effectively guide your team in making informed group-decisions