Stop Jumping to Solutions!

Business leaders are paid to make decisions and to ensure that those decisions are implemented in an appropriate and timely manner. To do so, executives must clarify and determine their objectives, explore possible options, and evaluate which options are aligned with their goals. In our work with senior executives, we find that most of them are very good at decision making if the objectives are clear, and if the choice is between a set of specific, predefined options. However, when presented with complex decisions, executives tend to home in quickly on a couple of options, list what they see as the pros and cons, and spend the bulk of their time calculating — or deliberating about — how the competing courses of action stack up. (See “About the Research.”)

Executives rarely take the time to frame decisions thoroughly. Rather than exploring the full scope of options, they stick to the obvious ones and use a limited set of criteria. Unfortunately, once decisions are framed this way, the outcome is frequently suboptimal.

Many of the concepts and frameworks designed to help executives generate better choices are too complex or too specific to apply in day-to-day decision making. As a result, managers typically resort to a mix of intuition and analysis, often using a classic decision matrix — with options on one axis and criteria on the other — to test the relative merits of a few solutions.1 This type of decision matrix is a powerful tool; it allows for the comparison of different options using the same set of predefined criteria.

However, we have found that executives don’t exploit the decision matrix to its full extent. They use it primarily to provide quantitative support for one course of action over another, focusing their time and energy on evaluating a given set of options in the decision grid of the matrix. In our experience, though, the real value of the matrix isn’t just as an evaluation tool but also as a process tool that helps executives extend their decision frame beyond the obvious options and criteria and to think “out of the box.” (See “The Decision Frame and Out-of-the-Box Thinking.”)

By visually integrating the three aspects that are critical to making strategic choices — options, criteria, and trade-offs — the decision matrix provides executives with a tool that does more than simply help them evaluate a given set of options. It also supports them at three key stages in the decision-making process: (1) framing key strategic questions and reformulating options and criteria, (2) making concrete choices, and (3) engaging in dialogue with key stakeholders and communicating solutions. (See “Three Ways to Use a Decision Matrix.”)

A Ubiquitous Problem

The term “satisficing” was coined nearly 70 years ago by social scientist Herbert A. Simon to describe the tendency of decision makers to settle for the first alternative that meets the minimum requirements rather than finding the optimal solution.2 Individually and collectively, people have difficulty passing up the first reasonable idea; they start analyzing the pros and cons instead of remaining in exploratory mode.

The impulse to “dive in” makes sense for decisions that are urgent, low stakes, and reversible. But many executives use the same approach for making weightier decisions that involve high complexity and long-term impact3; they often don’t differentiate enough between different types of decisions.4 Important business decisions, according to John Donahoe, former CEO of Ebay Inc., are distinct from everyday decisions “because once you make them, you can’t unwind them.” For other decisions, “you’re better off making [them] quickly, even if the decision is not the perfect one, and then adjusting down the road, rather than taking too much time.”5

Strategy is about managing difficult trade-offs around scarce resources, with many competing demands and high degrees of uncertainty.6 In turn, the quality of strategic decisions critically depends on having discerning and well-thought-through options and criteria. However, executives typically focus on too narrow a set of options and criteria without taking out-of the-box possibilities and conflicting stakeholder interests into account. One study found that in seven out of 10 cases the decision makers considered just one possibility.7 The failure rate for these decisions was more than half, whereas when decision makers considered two or more options, the failure rate was less than one-third.8

Where Decisions Go Wrong

When executives look at complex problems, they try to focus on the essentials and to screen out irrelevant distractions. But determining the most important factors and the best ways to respond varies depending on the frame adopted. For example, a marketing specialist is liable to perceive a situation and the key stakeholders quite differently from someone working in finance; each person is likely to consider different criteria and options that will ultimately influence the choices he or she makes. Put differently, the options-criteria frame sets the context for the decision. However, executives tend to treat this frame as a given; when they get locked into a suboptimal frame they lose perspective, which undermines the quality of their decision making.9 More concretely, executives are prone to develop myopia with regard to both the options and the criteria under consideration.

Option Myopia

Too often, executives accept the initial framing of a problem, whether it was generated by themselves or by others. They are typically not even aware they have framed the problem in a particular way. Instead, they just look at a situation, analyze it, and arrive at one or two plausible solutions — unwittingly closing off other possibilities.

Consider the example of a global business services company that had operations in Australia.10 The country manager for Australia wanted $20 million from headquarters to pursue a new business opportunity there. When the investment proposal was turned down, the manager considered resigning but was persuaded by her team to explore other ways of going after the opportunity, such as partnering with another organization. She ultimately proposed a management buyout of the Australian operation, which was approved. Within a few years, the multinational decided to buy back the flourishing Australian operation and gave its management team a more prominent role in the region.

As the Australian example suggests, framing the initial decision too narrowly (as “invest” or “don’t invest”) led to a straight rejection and could have had dramatic consequences in terms of missed growth opportunities and loss of management talent. A better framing would have been “How can we pursue this opportunity in ways that are acceptable to headquarters?” Fortunately, things worked out. In many cases, “either-or” framing (which is perhaps the most frequent frame in executive decision making) short-circuits conversations about available options and reduces decision quality.11 Adding one more option can prevent teams from becoming polarized and enrich the discussion by making people feel less inhibited about criticizing the preferred option.12

Criteria Myopia

Decision makers often exacerbate a narrow frame by omitting key criteria or discounting their value. In addition, they typically focus on objectives of direct importance to them, brushing aside goals that are important to other stakeholders. But inappropriate self-interest is a frequent contributor to flawed strategic decisions.13

Shell U.K. Ltd.’s decision in 1994 to sink its Brent Spar drilling platform in the North Atlantic rather than tow it back to shore offers a case in point. After studying what to do with the old rig, Shell U.K. concluded that disposal was not only the least expensive but also the best option from an environmental and an industrial health and safety perspective. However, Shell’s decision makers didn’t appreciate the importance of public perceptions and emotions — they viewed the issue as a “Scottish” or “U.K.” problem rather than as a broader environmental issue.14 After receiving weeks of media criticism, Shell reversed its decision and agreed to tow the platform to Norwegian shores. Had Shell executives sought input from a broad range of stakeholders beyond the U.K. and Norwegian governments at the beginning, they might have recognized the risk of reputational damage sooner.

Opening Up the Thinking Space

To illustrate how the decision matrix can be used to stimulate out-of-the-box thinking, let’s examine how an executive might evaluate a job offer or promotion within his or her existing company — something we have worked on with hundreds of executives. When presented with a new opportunity, most executives start by weighing the professional issues — the proposed pay, title, and responsibilities, especially if there is no need to relocate. In the process, though, many fail to think about other aspects of staying put versus switching jobs that could influence both how successful they will be in the new job and their overall satisfaction with life.

Don, for example, was weighing an opportunity to become CEO at an electric utility company in New Zealand against remaining in his current role of chief technology officer at the company. (The details of this example have been disguised.) At first, Don viewed the decision as just a question of whether or not to accept the promotion, but after he visualized his matrix of options and criteria and discussed the choice with colleagues, several other options surfaced, including leaving his current employer and working at another local company, relocating to a different geographical area, and exploring job opportunities outside the corporate sector. As he considered these options, additional criteria emerged. Thinking about leaving the company brought into focus the personal benefits of his current situation that he would forfeit if he left; leaving New Zealand raised questions for family members. Whereas Don was initially stuck with a myopic option set and unclear about what he wanted, introducing new options and criteria allowed him to step out of his overly narrow framing. Out-of-the box thinking is not just about coming up with fresh options but also about gaining clarity on key evaluation criteria.

Although Don’s initial impulse was to accept the promotion, he ultimately decided to remain in his current job, with new responsibilities, additional autonomy and flexibility, and better compensation. The emergence of fresh options and differentiating criteria helped him realize that, with a few tweaks, his current position provided the best trade-offs among multiple criteria.

By structuring and visualizing the option and criteria spaces, Don was able to clarify his thinking and identify what he wanted. At the same time, he came to understand that certain career aspirations didn’t align with his personal goals. Most importantly, he saw that there was no silver-bullet solution that addressed all of his issues and that whichever option he chose would entail difficult trade-offs.

Don’s decision-making process around these difficult trade-offs is representative of what happens in other situations where decision makers attempt to take into account a broad range of views that need to be expressed, integrated, and evaluated. While the decision matrix is no panacea, its systematic structure and visual layout provide powerful perspectives for reflecting on, sharing, and debating the critical trade-offs and choices inherent in any difficult decision — be it at home or at work.

Systematically Expanding the Decision Frame

While the decision matrix is commonly used to visualize trade-offs with existing options and criteria, it also can provide a structured approach for looking beyond the obvious solutions and criteria. To expand the decision frame in a systematic way, executives need to understand two concepts: mental buckets and golden cuts. (See “Expanding the Decision Frame.”)

Create mental buckets. One effective way to expand your thinking is to ask: “What if neither of these options were available?”15 Presented with this question, a person we worked with who was considering two job offers replied: “I’d become a mountain guide.” This response opened up a new category of possibilities — a mental bucket of “noncorporate” jobs. So what started as an offhand response gave rise to a new set of career options that came to include becoming a teacher, coach, civil servant, or entrepreneur.

Mental buckets are vehicles for clustering similar ideas into related yet distinct categories. While brainstorming is a common way for teams to generate lots of ideas, at some point, ideas need to be organized. Categorizing them into mental buckets helps to spot gaps and overlaps — in terms of both options and criteria.

The aim, on both axes, is to develop both breadth and depth. In the job switch example, the option buckets could start with corporate versus noncorporate jobs and break down the options from there. And the criteria buckets could be divided into financial versus nonfinancial objectives before itemizing the different variables. Through our work with executives, we have learned that the cognitive act of creating new mental buckets (for example, noncorporate jobs) serves to stimulate creativity. Executives have much more difficulty coming up with a similar range of ideas when starting with a blank slate and no guiding structure.

New options are likely to lead to new criteria. For example, the possibility of noncorporate jobs highlighted factors such as time with family and job security that had previously not been part of the equation. Interestingly, the “mountain guide” suggestion brought the ideas of “fun” and “independence” into the discussion.

To be clear, the goal of adding mental buckets isn’t to create an overly complex grid of options and criteria but to take a more systematic approach to establishing the key choices. You may ultimately conclude that it doesn’t make sense to think about noncorporate jobs. Even so, you may choose to maintain some of the new criteria you were able to identify.

Identify the “golden cut.” In Don’s job example above, there were different levels of choice. First, there was the dichotomy between corporate and noncorporate jobs. Then there were decisions about staying with the company or moving on, and whether to remain in the current job or take some other job in the company.

Every decision process for an important strategic decision should begin by examining the most difficult trade-off, something we call the golden cut. We ask people: “Where do you feel the most torn?” or “What dilemma is most difficult to resolve?” For an executive contemplating a job switch, different first cuts might open up vastly different option spaces, such as staying in the current industry versus entering a new industry, remaining in the same geographic location versus moving to a new location, or continuing to work versus early retirement. To find the golden cut, decision makers may need to reframe the problem by moving either up or down a level to identify the underlying tension. For example, in the job search example, one level away from the corporate versus noncorporate decision is the choice between having a job and not having a job — which might be relevant for an executive envisaging early retirement or for someone who has sold his or her company.

The golden cut helps frame our reflection, ensuring that we don’t get distracted by secondary issues. For example, one executive deliberating a job change developed a sophisticated set of criteria based on the mental buckets of financial and nonfinancial goals. Only later did he realize that his first cut was misplaced — it didn’t reflect the requirements of his family, particularly his wife. He proceeded to develop a set of higher-level mental buckets, one for his own criteria and another for his wife’s. This allowed him to reconsider his perspective on the relevant decision criteria.

In our experience working with senior managers, the ability to shift perspectives up and down is not the norm. When making strategic decisions, executives often take the first cut for granted, thereby depriving themselves of the opportunity to break out of their current frame and combat myopia.

Identifying the golden cut is vital — not just for framing decisions but also for engaging with key stakeholders. For instance, if you start a conversation about a potential new job using financial versus nonfinancial criteria, you might get instant pushback from family members who fear that their perspectives are not being considered. If, on the other hand, you first point out that there are both family-related and personal objectives that need to be taken into account, it might lead to a more constructive conversation around different options and their respective trade-offs. Being mindful about choosing and communicating the first cut on the criteria dimension is likely to create more openness and willingness to engage; the relevant criteria will be highlighted at the beginning rather than as an afterthought.

Beyond helping executives structure and reflect on complex dilemmas, the decision matrix helps draw out external input so that executives don’t get stuck in their own perspective. The matrix offers a structured way of soliciting and gathering input.

The Performance Payoff

Visualizing options, criteria, and trade-offs in a decision matrix and broadening the decision frame by pushing option and criteria spaces in systematic ways doesn’t guarantee better outcomes. But it does force executives to reflect on how they go about making consequential decisions. More specifically, by helping executives work through their challenges in a more structured and systematic way, using a decision matrix to expand the decision frame can enhance decision making at three levels: clarifying your thinking; engaging your team; and generating buy-in from the larger organization.

Clarifying Your Thinking

Using a decision matrix contributes to problem solving by rendering your thinking visible.16 Articulating poorly defined thoughts and committing them to paper helps executives capture and organize their thinking and declutter their minds. To this end, the matrix provides decision makers with an effective way to store relevant information so that they can devote their cognitive resources to the critical task of evaluating the relative merits of different options.

Scholars have noted the importance of visual cognitive artifacts (such as mind maps, SWOT analyses, and decision matrices) that extend the capacity of the brain to process information.17 The decision matrix encapsulates the essential elements of strategic decision making. It incorporates the relevant options and criteria and shows, in a structured way, how they compare with one another and what the various trade-offs are. Once this underlying strategic logic becomes evident, it is easier to review and, if need be, reconfigure the frame by adding or changing options and criteria.

Having worked out the relevant options and criteria, you can employ the decision matrix in a classic way. The goal isn’t to quantify each option to the decimal point but to make sure that the priorities are organized correctly and that the reasoning is robust. A good way to do this is to score the options against each variable, with a plus or a minus sign for expected positive or negative outcomes and a zero or a question mark for neutral or unknown outcomes. The scores signify a presumed causal relationship between the various options and the various criteria — allowing decision makers and other interested parties to think through why particular choices are expected to lead to particular outcomes. The underlying goal of this exercise is not so much to come up with an actual number but to test the soundness of the causal relationship that links a specific option to certain criteria.

Engaging Your Team

Beyond helping executives structure and reflect on complex dilemmas, the decision matrix helps draw out external input so that executives don’t get stuck in their own perspective. The matrix offers a structured way of soliciting and gathering input. It can serve as a starting point to share your preliminary options and criteria, to explore issues outside your own awareness, and to clarify what needs to be true for each option to be the best choice. When used that way, the matrix accelerates the transition from individual to collective sense-making. It offers an efficient way for others to grasp the scope and crux of the problem and to verify that everything important has been considered. The matrix provides an antidote to self-censorship by maintaining a clear record of the factors considered and the presumed connections between choices and outcomes, enabling people to push back on any assumptions that are unfounded or incomplete.

By engaging with others who have different perspectives, decision makers can root out biases and blind spots. When organizations begin applying the decision matrix, for example, it’s often the case that one option seems way better than the others. This prompts people to inquire: “Why isn’t this already happening?” At this point, we often find that an important stakeholder has a concern that wasn’t even on the initial list of criteria. This highlights the importance of spelling out not just the anticipated benefits but also the negative impacts different stakeholders might incur. The matrix supports open conversations around the key options and criteria. Not only does it help executives capture and discuss these insights in a structured and integrated way, it also keeps the debate on track and restricts people from circling back to the same old points. It allows you to say, “We already discussed this trade-off — but we decided to dismiss it.” It helps to keep everyone on the same page and builds a sense of participative involvement that is important for understanding, buy-in, and cascading the message to others.

With more complex decisions, different stakeholders are likely to disagree about what the best way forward would be. In such situations, jumping directly to the solution will create conflict and resistance.

Generating Internal Buy-In

Beyond enriching the quality of decisions and sense of involvement, the decision matrix can also be useful for communication. Having worked through the matrix, it’s often easier for decision makers to advocate a particular course of action knowing that, on balance, the choice was carefully considered.

The idea isn’t necessarily to present the matrix publicly. However, if you can familiarize yourself with its underlying logic, you are going to have a much easier time explaining your strategy and dealing with potential objections.18 Decision makers are often taken aback by the opposition they meet when they announce big decisions; stakeholders may doubt that other options were properly considered. The matrix enables decision makers to share a sense of the deliberations and the way the decision matured. In particular, it offers different communication options, depending on how controversial a decision is and how much pushback is expected.

For relatively straightforward decisions where low opposition is expected, leaders can directly present their chosen option and explain why the decision was made. This approach can be conveyed quickly, as it only focuses on the option that was selected. However, with more complex decisions, different stakeholders are likely to disagree about what the best way forward would be. In such situations, jumping directly to the solution will create conflict and resistance. It is better to first outline the most relevant options, discuss the trade-offs, and only then explain why a specific option was chosen. Although some people may continue to disagree, this approach underscores that decision makers have considered a broad range of options and that the pros and cons of each option were acknowledged and sincerely debated. A sense of fair process increases the likelihood that critics, while potentially still disagreeing with the final outcome, will at least understand and respect why a particular decision was made.

In cases where opposition is likely to be heated, the decision maker can approach the matrix from yet another angle — this time using the criteria axis as a starting point. Explaining the criteria and candidly highlighting their inherent conflicts and tensions — for instance, meeting short-term targets and securing long-term growth — helps people recognize from the outset that there may not be any easy answers or options. By presenting the conflicting criteria in unvarnished terms and by getting agreement on these conflicts, it becomes much easier to engage in meaningful debate about the different options.

Even in situations where the decision ultimately proves incorrect, the matrix provides a record of the core thinking. It reminds people of the options and arguments that were considered. The visual documentation of the matrix lays out the relevant options and criteria and explicitly spells out the driving logic. This information is critical for understanding where things went awry: Did you forget options, miss out on important criteria, or go wrong in the evaluation? Pinpointing why a decision didn’t lead to the desired outcomes is a first important step for making better decisions in the future.

A good decision does not guarantee a good outcome, but using the decision matrix wisely does help to push the odds in your favor. Having a tool for expanding perspectives, removing bias, finding creative compromises, and achieving buy-in increases the chances that you will get it right.

On the other hand, executives should be careful about turning every decision into a major project. You don’t need to use a decision matrix to expand the decision frame to make short-term operational decisions — for the effort required, the payoff will be too limited. But for decisions that are strategic and ambiguous, and where internal alignment is important, expanding the decision frame can stimulate creative thinking, and the matrix can clarify which priorities, criteria, and trade-offs make sense. Used this way, a decision matrix can be a structuring tool, a problem-solving tool, and a communication tool, all rolled into one.