You have to make an important decision as a CEO, but you’re faced with multiple options. Create your own decision matrix, an evaluation grid that will allow you to analyze all the possibilities and make a thoughtful choice to ensure your organization’s viability.
6 easy steps
If you want to use a decision matrix, this means your company is at a crossroads and you’re examining several possibilities. The purpose of this first step is to determine all the options to consider.
For example, you’re planning to open a satellite office in the United States, but you’re trying to choose among several States. You are considering three that are especially dynamic: California, Florida and Texas.
Once you’ve identified all the options, you must determine some key criteria to distinguish each of them. In other words, what are the most important factors in your analysis that will have an impact on your company’s success?
For example, to choose the State where you will establish a satellite office, you could adopt the following criteria: the number of potential customers, the average rent for commercial premises, or the workforce’s average level of education.
Now that you’ve decided on your key criteria, the time has come to determine the importance of each one by assigning percentages. Why? Because you don’t give each criterion the same weight. You must therefore analyze them subjectively according to the company’s reality.
For example, in this project to inaugurate a satellite office in the United States, you might decide that the number of potential customers is the main criterion and assign it a weighting of 50%. The rent for commercial space would rank second and be weighted at 30%. The remaining 20% would go to the workforce’s average level of education.
Attention! Make sure that the weightings of your criteria add up to 100%.
4. Searching for data
This step documents the options considered. You must find reliable and objective data for each of the chosen criteria.
For example, by opening a point of service in the United States, you want to expand your clientele, which is composed essentially of law firms. You then will want to know how many law firms are established in each of the three preselected States. During a search, you will discover that California has 56,550. There are 43,065 law firms in Florida and 33,930 in Texas.
Once you have collected data, you may assign a score to each option considered. This evaluation must be done for each criterion you defined.
Concretely, if you study three options, we recommend you assign a score of 3 to the best option and a score of 1 to the least satisfactory option.
For example, based on the number of law offices established in each State, California would obtain a score of 3, Florida 2 and Texas 1.
6. Calculating the results
You’re now at the step where the Excel spreadsheet does the job for you. It will multiply the weighting of each criterion by the score you assigned to each option.
For example, based on the number of law offices found in each preselected State, California will obtain a result of 1.5 (3 x 50%), Florida 1 (2 x 50%) and Texas 0.5 (1 x 50%).
Finally, Excel will calculate the sum of the results for each option. This will give you a quick and objective idea of the option that best suits your company.
Similar tools and resources
Good practices for optimizing your operations
Optimizing inventory management, maximizing logistics services and reducing your ecological footprint. These good practices will help you improve your operations.
Establishing your online presence
In this section, you will find resources and advice to help boost your online business and enhance your presence on the Web.
Third-party logistics services
E-commerce logistics can be a complex puzzle, but a third-party logistics service provider (3PL) can make your life much easier.
Everything you need to know about delivery
Offering high- quality and efficient delivery is crucial when it comes to retaining your customers. Advice for flawless operation.
Evaluate whether your business is mature enough for international e-commerce
This tool will help you determine whether your business is ready for international online sales, or whether you need to review certain elements first.
Business plan template and useful start-up documents
The business plan is a tool that allows the entrepreneur to structure their project. This plan is developed by identifying the company's mission, the vision and values of the entrepreneurs, the product or service offer, market analysis, competitive analysis, marketing strategy, financial forecasts, etc.
Specialized organizations and resources are available for entrepreneurs who want to do business abroad or explore new markets.
Marketing and commercialization
The essence of marketing is to understand your customers’ needs and develop a plan that responds to those needs.
Sustainable development: Tips and advice for improved eco-responsibility
Is being an eco-responsible business a passing fad or a new way of thinking about our role? The answer lies in the facts!
Depending on your industry, the proper location can be a strategic decision. PME MTL experts help entrepreneurs look for locations suited to their needs.