Decision-making models can be useful in giving teams ways to think about decisions more consciously. Here we give you 7 decision-making models that can be used to inspire your team, or generate productive discussion about how to make decisions effectively.
So far this month in our blog posts, we’ve been asking the important question of how we make decisions: What goes into these decisions? What do we think about? What assumptions are we making? What are we taking into account? And what are we potentially leaving out?
The truth is, people have different ways of making decisions, some of them based more heavily on experiences, feelings, or discovering new ideas. And by looking at these different ways of making decisions, we can learn from them and think more critically about our own methods and hidden biases.
Actually, in our blog post on the “decision-making process” we offered a basic method for reaching a decision that was overwhelmingly based on the “rational decision-making model” (see below). What does that say about the way that we think about decisions? And perhaps by focusing too much on rational methods, we leave out other important factors of decision-making like sense, feeling, and intuition.
So that’s why it’s important to look at some different models of decision-making. They can make us think a little differently and maybe get us unstuck from whatever decision-making box we’ve been in. Which of course, might lead to making some unexpected or exciting decisions that we wouldn’t have made otherwise.
In the following post, we’ll look at the seven most widely known decision-making models. Some of them are full models, with concrete steps and practices to follow. Others, however, may be more abstract or simply fill in the gaps from other models. Either way, these models should help give us a better sense of the variety of decision-making methods available to all teams.
7 Decision-making models
1. The rational decision-making model
While the rational decisions-making model is the most commonly known decision-making method, it is not necessarily the most simple or easy-to-use. This is because it works best in situations that are high-stakes and have a high level of complexity. It also requires a lot of time to go through each step carefully, which is not always good when you have to make quick decisions.
However, what the rational decision-making model does do is allow team members to come together around an objective process. It can therefore neutralize many of the stronger emotions that arise when making tough decisions on a team.
The basic rational decision-making model is as follows:
- Define the problem
- Find criteria and information you will use
- Weight the information and criteria
- Come up with possible alternatives
- Evaluate these alternatives
- Determine the best solution
- Review the decision
As you can see, this process is mostly similar to the one we presented in our earlier post. You can also see that the rational model is very straightforward and goes step by step through determining and evaluating each aspect of the decision.
2. The bounded rationality model
The bounded rationality model mostly challenges some of the assumptions of the rational model, and seeks to fill in some of the gaps that it leaves open. “Bounded rationality” comes from economics, and seeks to explain situations where individuals do not always think in completely rational ways.
While thinking rationally might be a goal or ideal, it’s simply not what most of us can be expected to do all the time. This is because, according to this theory, we don’t always have enough information to make completely rational decisions, or because we are under certain time constraints that limit our thinking.
As a result, we tend to do something called “satisficing”. This basically means that we make the “best decision we can”, and not the necessarily most optimal one. For example, let’s say you’re trying to find a web designer to work with, and you’re under a deadline to hire one very soon.
You don’t know about web design, and you don’t have the time to learn about the ins and outs of the industry. So you hire the best web designer you can find in the time you have (and also based on your budget constraints). They may not be the best web designer for you, but you have to make the decision that is “just good enough” given the constraints you face.
It’s important to point out here that the problems bounded rationality poses can be addressed somewhat by having more people with you, like in a team. There are more resources, knowledge bases, and perspectives to draw from and pool together, which means that together you can move closer to a more optimal solution than you could have alone. Of course, teams also face limitations, and so bounded rationality is still a useful way to think about decision-making.
3. The Vroom-Yetton decision-making model
The Vroom-Yetton model can be described as a model that helps you “decide how to decide”. It’s a systematic way of figuring out the right way to make decisions on your team. The assumption here is that not all decision-making styles are right for every situation, and that teams should use different styles to make different kinds of decisions.
The Vroom-Yetton decision-making model starts with seven yes-no questions that teams should ask themselves before embarking on a decision-making process:
- Is the quality of the decision important?
- Is the team commitment to the decision important?
- Do you have enough information to make the decision on your own?
- Is the problem well-structured?
- If you made the decision yourself, would the team support it?
- Does the team share organizational goals?
- Is conflict over the decision likely?
Based on the answers to these questions, teams are led to four possible options:
- Autocratic 1: One person makes the decision, without any input from the rest of the team.
- Autocratic 2: One person makes the decision, but gets some specific information from other team members.
- Consultative 1: One person ultimately decides, but talks with team members individually and gets their opinions. There is no group discussion.
- Consultative 2: One person makes the ultimate decision, but they get their team members together for a group discussion beforehand.
- Collaborative: The team works together to reach a consensus, where the team makes a decision that they can all agree on. Managers’ roles are facilitative.
For teams that are stuck on a problem and don’t know how to proceed to find a decision, this model might be very useful. But there are limitations. Some of the questions can be vague in their wording, and the model does not take into effect things like team dynamics. Also, the range of options is limited, and weighted heavily towards one person making the decision. There are certainly a wider range of decision-making and leadership styles available.
4. Intuitive decision-making
Intuitive-based decision-making models are ones that don’t use conscious reasoning as their basis. Instead, intuitive decision making relies on feeling, pattern recognition and past experiences or judgements. There is some research that suggests that this type of approach to decision making can be just as effective as more rational or analytical methods. However, the key is that intuitive approaches require more experience, which means that newer employees or team members may not be able to utilize intuitive models that well.
However, if your team makes their decisions together, then combining different levels of experience can produce intuitive decisions that are likely to be effective. Also, as we have argued before, mentoring and training can significantly help to spread the experiences and institutional memories of older team members, and therefore teach less experienced team members to make more intuitive decisions.
5. The recognition-primed decision-making model
The recognition-primed decision-making model in a way combines intuitive and rational approaches to decision making. Like the intuitive model, the recognition-primed model starts with recognizing patterns and drawing on experience. However, later on it emphasizes rational thinking to analyze how well the decision has worked so far, and to make necessary improvements.
The steps of the recognition-primed model are as follows:
- Recognize a pattern in the information.
- Pick a course of action and create an “action script”.
- If the action script looks good, move ahead; if not, tweak the script or go back to the beginning .
Here, an “action script” is a sort of mental simulation of how things might turn out if you pursue a certain course of action. I’m sure we’ve all done something similar before, where we’ve mapped out what we think will happen. Of course, this may not be based on reality, and that’s why it’s important to go back and revise the action script if it turns out not to match reality in some way.
On teams, using the recognition-primed model can be a good way to brainstorm different decision-making outcomes together. The benefit here is that it allows team members to use their imagination a little bit, which could help break them out of old patterns or ways of thinking and lead to new ideas.
6. The retrospective decision-making model
The retrospective model also combines intuitive and rational thinking, and attempts to analyze why people stick to certain options, even when confronted with other alternatives. The model finds that we often come up with an “implicit favorite” when making a decision. The choice of this favorite is in turn based on our intuition–our feelings, experiences, values, etc.
As a result, even if we search for other options or alternatives, our mind may be anchored to this implicit favorite. Furthermore, while other options may clarify the benefits and negative qualities of the implicit favorite, we are still more likely to choose it in the end. In this way, we may think we’re making a purely rational decision, when in fact we aren’t.
This model is particularly enlightening when it comes to how we tend to fixate on some choices over others. While it doesn’t necessarily provide a step-by-step path forward, it can be useful in understanding other team members’ perspectives. Specifically, when some team members are stubborn about certain choices, try to investigate what’s lying behind their stubbornness. It could be that some value, emotion or personal experience is leading them to fixate on an implicit favorite.
7. The creative decision-making model
The goals of the creative decision-making model should be pretty straightforward: to come up with new ideas. Placing creativity at the center of decision making on your team could be a good idea if your team is in need of finding different ways to move forward, or brainstorming creative solutions. However, creative decision making does take time, and it is not always the most effective method.
Below are the steps of the creative-decision making model:
- Identification–Identify the problem and what you’re trying to do.
- Immersion–gather information and different perspectives, and spend time thinking heavily about the problem
- Incubation–draw your resources and information together, make connections and brainstorm different solutions.
- Illumination–find the best solution and start imagining and creating it.
- Verification–review what you’ve done and see what needs to be changed or revised.
Interestingly, the creative decision-making process is very similar to the rational model we discussed above. The difference is the orientation–the rational model is geared toward finding the most optimal solution, while the creative model is focused on simply finding a new, workable idea. The incubation period in particular should be open and fluid, and draw on many different ways of thinking and brainstorming as a means of unlocking creativity.
The decision-making models we mentioned above are all useful in their own ways, and they all have something to teach us about decision-making, whether as individuals or teams. Teams though, have the benefit of having greater numbers of perspectives and skills to draw from. Which is why teams should be open to learning about different methods and ideas about decision-making. Even if you don’t end up using them, they can still provide a greater awareness about how your team makes decisions, and what could be done to make the process better for everyone.