Tools for decision-making
How can you map out tough business decisions? Download a free tool that can help you lay out the options.
Not all problems have a clear solution. Some decisions you will need to make about your business are likely to have uncertain outcomes or may be risky.
Decision trees are excellent tools for helping you to choose between several courses of action.
They break down a problem into a number of points, or nodes, from which you can evaluate the outcome of different courses of action.
How decision trees work
A decision tree is a diagram of nodes and connecting branches.
- Nodes indicate decision points, chance events or branch terminals.
- Branches correspond to each decision alternative or event outcome emerging from a node.
A decision tree consists of three types of nodes:
- Decision nodes, shown as squares.
- Chance nodes, shown as circles.
- Outcome nodes, shown as triangles.
How to build a decision tree
To build a decision tree, start with the decision you are considering. Draw a small square to represent this towards the left of a large piece of paper.
Decision trees break down a problem into a number of points.
From this box, draw out lines towards the right for each possible solution, and write that solution along the line. Keep the lines apart as far as possible so that you can develop your options.
At the end of each line, consider the results. If the result of taking that decision is uncertain, draw a small circle.
If the result is another decision that you need to make, draw another square.
- Squares represent decisions.
- Circles represent uncertain outcomes.
Using the decision tree tool
This free PDF takes you through building a decision tree and assessing different options. It can be used by organisations of any scale or sector.
You can complete it on your own for work or personal decisions. You can also do it with a group. The time needed will depend on the problem or decisions you are looking at.
For larger decisions, you may need to allow one to two hours.
Download the Deciding Between Options tool