Breaking down the 5 decision-making models

Decisions, decisions, decisions: 5 decision-making models

Making effective decisions is a critical leadership quality. However, settling on the best course of action is often easier said than done. When instinct and reasoning alone aren't enough to pinpoint the best decision out of your available options, it can often be helpful to utilize a decision-making model.

A decision-making model works by walking you through the decision-making process — and there are several such models available for you to choose from.

To help you improve your problem-solving abilities and make better decisions, let's take a look at five proven decision-making models and when you should use them.

Defining decision-making models

Decision-making models are frameworks designed to help you analyze possible solutions to a problem so that you can make the best possible decision. Because different decision-making models take different approaches to this goal, it's important to match the model with your unique situation and leadership style.

Given that only 20% of team members say that their organization excels at decision-making, most organizations and team leaders have a lot of room to improve in this area. If you want to improve your decision-making approach, mastering the five decision-making models is a great place to start.

The 5 main decision-making models

There are five main decision-making models designed to help leaders analyze relevant information and make optimal decisions.

Once again, each of these models takes a unique approach to decision-making, so it is important to choose the model that will work best for you and your unique situation. With that said, let's take an in-depth look at each model and the situations where each one is most applicable.

1) Rational decision-making model

The rational decision-making model involves identifying the criteria that will have the biggest impact on your decision's outcome and then evaluating possible alternatives against those criteria. The steps of the rational decision-making model are:

  • Step #1) Define the problem: You'll want to start by identifying the issue you are trying to solve or the goal you are trying to achieve with your decision.
  • Step #2) Define criteria: The next step is to define the criteria you are looking for in your decision. For instance, if you are deciding on a new car, you might be looking for criteria such as space, fuel efficiency, and safety.
  • Step #3) Weight your criteria: If all of the criteria you define are equally important to you, then you can skip this step. If some factors are more important, you will want to assign a numerical value to your criteria based on how important each factor is.
  • Step #4) Generate alternatives: Having defined and weighted the criteria you are looking for, it's time to brainstorm ideas and develop a few alternatives that meet your criteria.
  • Step #5) Evaluate your alternatives: For each possible solution you come up with, you should evaluate it against your criteria, giving extra consideration to the criteria you weighted more heavily.
  • Step #6) Choose the best alternative: After evaluating all possible alternatives, select the option that best matches your weighted criteria.
  • Step #7) Implement the decision: The next to last step in the rational decision-making model is simply putting your decision into practice.
  • Step #8) Evaluate your results: It's essential to evaluate your results anytime you make a decision. Looking at your decision from a retrospective point of view can help you decide if you should use the same decision-making process in the future.

When to use this model

The rational decision-making model is best employed when you have numerous options to consider and plenty of time to evaluate them. One example of a scenario where this model might prove useful is choosing a new hire from a pool of candidates.

2) Bounded rationality decision-making model

Sometimes, taking action quickly and choosing a "good enough" option is better than getting bogged down in searching for the best possible solution. The bounded rationality decision-making model dictates that you should limit your options to a manageable set and then choose the first option that meets your criteria rather than conducting an exhaustive analysis of each one. Going with the first option that meets your minimum threshold of requirements is a process known as "satisficing." While this may not be the best process for every decision, a willingness to satisfice can prove valuable when time constraints limit you.

When to use this model

The bounded rationality decision-making model is best employed when time is of the essence. It's the best model to use when inaction is more costly than not making the best decision. For example, suppose your company has encountered an issue causing extended downtime. In that case, you may want to use the bounded rationality decision-making model to quickly identify the first acceptable solution since every minute wasted is costly.

3) Vroom-Yetton decision-making model

The Vroom-Yetton decision-making model presents seven "yes or no" questions for a decision-maker to answer followed by five decision-making styles for them to choose from. It's the most complex decision-making model on our list, requiring decision-makers to utilize a decision tree to arrive at the right decision-making style based on their answers to the model's questions.

Check out this helpful resource for a complete breakdown of the Vroom-Yetton decision-making model and a copy of the decision tree template you will need to use.

When to use this model

The Vroom-Yetton decision-making model was specifically designed for collaborative decision-making and is best employed when you involve multiple team members in the decision-making process. In fact, one of the main objectives of this model is to determine how much weight should be given to the input from a leader's subordinates.

4) Intuitive decision-making model

Have you ever heard that it's often best to go with your gut? While making decisions based only on instinct may not seem like the best idea to those who prefer a more careful and logical approach, there are plenty of instances where going with your gut is the best way forward.

For example, if you don't have much information to consider, instinct may be the only tool for finding the best solution that you have available. Likewise, trusting your instinct can often yield the best results in cases where you are already deeply experienced with the matter at hand since nothing hones instinct better than experience.

When to use this model

The intuitive decision-making model probably shouldn't be the first model you turn to when you need to make a decision, but there are instances where it can be useful. We've mentioned a couple already, including cases where there isn't enough information for you to make a more informed decision and instances where your own experience is more reliable than the available information.

The intuitive decision-making model can also be useful in cases where you don't have a lot of time and need to make a decision quickly.

5) The recognition primed model

The recognition primed model is similar to the intuitive decision-making model in that it relies heavily on the decision-maker's experience and instinct. However, the recognition primed model is a little more structured than intuitive decision-making and includes the following steps:

  • Step #1) Analyze available information to identify possible solutions: The first step in the recognition primed model is to brainstorm possible solutions based on your available information.
  • Step #2) Run scenarios through your head: For each possible solution, run the scenario through your head and see how it plays out.
  • Step #3) Make a decision: The recognition primed model dictates that the solution that leads to the best possible outcome when you visualize it in your mind is the solution that you should choose.

When to use this model

Like the intuitive decision-making model, the recognition primed model works best in instances where:

  • You don't have a lot of information available.
  • You trust your instinct and experience.
  • Time constraints are a factor.

With that said, using this model effectively does require a certain degree of creativity and imagination since you will have to visualize the outcome of each possible solution.

A note on decision-making biases

Anytime you are faced with an important decision, it is essential not to let biases get in your way. Biases might be rooted in prior experiences, but that doesn't inherently mean that they are grounded in facts. In many cases, avoiding biases is also key to making an ethical decision since biases can sometimes cause you to mistreat certain people and their ideas.

Understanding the different biases

Preventing biases from getting in the way of your decision-making skills starts with identifying the types of biases you need to be aware of, including:

  • Confirmation bias: Confirmation bias entails favoring or focusing on information that confirms your pre-existing beliefs and ignoring information that runs counter to those beliefs. While it's important to trust your own experience and beliefs, you don't want to subconsciously favor information just because it aligns with what you already believe to be true.
  • Availability bias: Information that is easily accessible in your memory often gets undue weight, and this is known as availability bias. One example of availability bias is overestimating the likelihood of an event just because you can remember a similar event happening to you in the past.
  • Survivorship bias: Survivorship bias entails focusing only on the solutions that have generated success in the past. While it's important to consider past results, ignoring possible solutions just because they are unproven will place unnecessary constraints on your decision-making process.
  • Anchoring bias: Anchoring bias is the tendency to "anchor" yourself to the first piece of information you learn. Information should not get extra weight just because you have known about it for longer, and new information can be equally important to consider.
  • Halo effect: The halo effect occurs when positive experiences with or impressions of one aspect of a possible solution cause you to view the entire solution positively. Rather than being blinded by the positives, seek out and consider the negatives as well.

Define your decision-making process with Range

A lot goes into making good decisions, and the decision-making models we've covered in this article can serve as excellent tools for helping you find the best possible solution to any challenge.

No matter which model you go with, communication, collaboration, and organization are key to making good decisions.

With Range, leaders and team members alike are able to effortlessly organize their ideas, communicate back and forth, share important information, and make collaborative decisions. If you want to get started using powerful team management software to organize your decision-making process, sign up for Range today.

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Understanding the 5 decision-making models
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