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Decision-making frameworks: How to master the science and art of making good decisions
You want to make the ‘best’ decision possible. But that’s not always possible.
At the best of times, decision-making is a balancing act of business goals, resources, and personalities. In the worst, it’s some twisted circus act where you’re forced to juggle flaming swords as you shimmy across a tightrope to safety.
That’s why:
The science and art of moving forward is smart decision-making, using the information available to you while garnering the trust and conviction of your team and stakeholders.
Those two elements - science and art - are the basis of how you become known as a great decision-maker.
The ‘science’ of decision-making means understanding and using proven decision-making frameworks. While the ‘art’ comes in how you engage your team, gather (and ignore) opinions, and announce your choice.
Just like project management is as much about your team as the methodology you use, decision-making only succeeds when you consider both process and people.
If either is missing - the science or the art - you’ll end up with a whole bunch of people pointing fingers at each other and a product that’s quickly sinking to the bottom of the ocean.
Let’s start by covering the best decision-making frameworks for project managers facing difficult choices.
1. RACI - Responsible, Accountable, Consulted, Informed
The most overlooked aspect of successful decision-making is setting clear responsibilities.
Who’s responsible for what? Who gets a say in the final decision and who is just an observer? Who actually makes the call and owns the outcome?
The first decision-making framework we’re going to cover is the RACI chart - a simple way to pre-determine decision-making roles before they become an issue.
What is a RACI chart?
RACI is an acronym that stands for Responsible, Accountable, Consulted, and Informed. These are the ‘roles’ each ‘type’ of teammate plays in the decision. (RACI charts are also regularly used to determine responsibilities for tasks and milestones).
Those ‘roles’ are used on a RACI chart - a matrix that maps tasks, deliverables, and decisions to teammates to determine how involved they’ll be. For example, is the Lead Engineer responsible for a specific decision or just informed on it?
When you come to a task or a decision on your chart, you’ll already know what each teammember needs to do.
What are the core elements of a RACI chart?
A successful RACI chart relies on properly understanding each role so there’s no confusion when it comes time to make a decision.
Responsible: Doing the task/making the decision. This person is responsible for doing the work or making the final decision. More than one person can be ‘responsible’ but you shouldn’t involve so many that you need a separate decision-making framework to get to a consensus!
Accountable: Owns the task/decision. This person is ultimately responsible for the task or decision being finished. They might not do the actual work but they ‘own’ the outcome.
Consulted: Assisting or supporting. These are the people who are supporting or giving useful feedback. There’s two-way communication with them as they help along the way.
Informed: Kept aware. This group of people is only informed of the outcome of the decision or progress on the task and don’t give feedback. (You can keep track of this group with a communication plan).
Note: Some teams prefer different acronyms to clarify the different roles. Here are a few common options:
DACI: This is similar to RACI but with a more action-oriented focus. DACI stands for Drivers, Approvers, Consulted, Informed.
CARS: This is a modified version of the RACI roles meant to provide more nuance. CARS stands for Communicate, Approve, Responsible, Support.
CLAM: This framework focuses more on actions rather than roles. CLAM stands for Contributes, Leads, Approves, Monitors.
When should you use a RACI chart for decision-making?
A RACI chart involves significant upfront work determining roles and planning milestones and decisions. Therefore, they’re best suited to larger projects with lots of moving parts, stakeholders, and teams.
If you’re an Agile team especially, a RACI chart might seem like overkill (as the roles are pretty much implicit. Responsible = team working on a task. Accountable = Product owner.) However, adding one to your long-term Agile planning efforts can help reduce confusion.
Lastly, it’s important to remember that a RACI chart isn’t a project plan. It’s there to help guide you through decisions and key milestones. Not override your overall plan.
How to make a RACI chart for your project
You can create a RACI chart in just a few simple steps.
First, identify project roles. Make a list of each ‘type’ of team member. This could be the Product Owner, Design Lead, Development Lead, Stakeholders, Product Team, etc… Some people prefer to use actual names instead of roles, but this can cause confusion if your team is larger than just a few people.
Next, clarify project decisions or deliverables. List out each major decision or milestone you can think of.
Now, go through each task or decision and decide each team member’s ‘role’.
Once you have the first draft of your RACI chart, confirm your assumption with your team.
Finally, make your RACI chart useful throughout the product lifecycle.
Don’t spend all this time on a RACI chart just to let it gather dust. Here are a few ways you can continue to use it throughout the project:
Add new or upcoming decisions as you become aware of them.
Refer back to the RACI during reviews, sprint planning, or post-mortems.
Bake your RACI chart into your project management tool by using roles and permissions.
Common RACI chart pitfalls to watch out for
A RACI chart is a powerful decision-making framework for the right team and project. However, they also can cause specific issues if you’re not careful.
You (the project manager/product owner) become a ‘catch-all’. Try to move away from the thought that you need to be responsible for everything. Where can designers/developers/analysts own decisions?
Confusion between ‘accountable’ and ‘responsible’. Be sure your team knows who is doing the work versus who is ultimately responsible for its completion.
Friction between ‘informed’ and ‘consulted’. Some stakeholders won’t appreciate being listed as ‘informed’ (i.e. their opinion/feedback won’t be taken into consideration). A great way to solve this is by using a communication plan and sending regular updates to keep them up-to-date on progress.
2. BCM - Benefits, Costs, Mitigations
Not every decision deserves the same amount of time and energy.
If the outcome of your decision can’t be scaled back or changed at a later date, you need to escalate. If it can be reversed or changed - which is most often the case - you need a system to move quickly through it to avoid hitting a bottleneck.
That’s where the BCM framework can help.
What is the BCM decision-making framework?
BCM stands for Benefits, Costs, and Mitigations.
Developed by Flatiron Health CTO Gil Shklarski, it’s a way to quickly weigh your options when making a reversible decision for yourself or your team.
When should you use BCM for decision-making?
BCM is an easy way to streamline quick decisions that can be reversed.
Let’s say you’re choosing between which help desk software to use or how a feature should be implemented. These decisions can (most likely) be changed if needed. But they’re also decisions that are easy to get bogged down in.
As an Agile team, BCM is a great decision-making framework for overcoming indecision that might otherwise slow down your sprints.
How to use the BCM framework as a team
You can use BCM for individual decisions, but it’s also just as powerful as a team tool.
Start with a simple chart showing your options with rows for Benefits, Costs, and Mitigations. As a team, you might put this up on a whiteboard or use a shared wiki you can all add to.
Option 1 | Option 2 | Option 3, 4, 5, etc... | |
|---|---|---|---|
Benefits | |||
Costs | |||
Mitigations |
Next, work through the cost and benefit columns while considering the social ramifications of each option. Don’t just treat benefits and costs as clear-cut pros and cons. Will your boss be happy with this decision? Will some customers get excluded by your choice?
Especially when discussing costs, emphasize the risks that you’re potentially introducing. What are the short and long-term consequences? Will this option scale if you grow quickly? What if you don’t?
Finally, talk through how you can mitigate the risks of each option.
Bring in outside voices if necessary to help understand exactly how each option will impact your team and company. If you’re having a hard time thinking through all the potential risks or framing mitigations, try asking these questions:
What would be best for our customers?
What would the CEO/Board want us to do?
What is the root cause of the risk? Can you mitigate it?
Can you address the technology debt in another way?
Is there a short- or long-term tradeoff you can make?
Common BCM pitfalls to watch out for
On the surface, BCM is as simple a decision-making framework as you can find. But simple doesn’t always mean easy. There are a few common pitfalls that cause it to not work in your favor:
Not thinking holistically about the decision. Is one or more of your rows pretty empty? You might be falling victim to your own biases and not thinking through all the options.
De-emphasizing (or ignoring) the risks associated with the costs. All decisions come with risks and those need to be included in your framework.
Not thinking deeply enough about mitigations. Make sure you’re including outside voices to understand the true impact of your choices. It’s not always just your team who will deal with the consequences.
3. S.P.A.D.E - Setting, People, Alternatives, Decide, Explain
At most companies, 90% of decisions can be reversed. But in those harder scenarios - the ones where both consensus and reversing your choice are impossible - you’ll require a specialized framework.
What is the S.P.A.D.E decision-making framework?
Developed by Square’s Gokul Rajaram, S.P.A.D.E stands for Setting, People, Alternatives, Decide, Explain.
This decision-making framework is designed to document everything from the context of the decision to who’s involved, what you decided, and how to broadcast your choice to the company.
The depth of coverage makes it a great tool for capturing company knowledge and sharing lessons learned. You’ll have a clear history of what you were thinking and why you made the decision you did.
When should you use S.P.A.D.E for making decisions?
The S.P.A.D.E framework requires a lot of work to implement. And even with a template in place, it’s overkill for all but the big, sweaty, keep-you-up-at-night decisions you only come across a few times a year.
But when you’re faced with an irreversible choice, it’s time to bust out the big guns.
Maybe you’re thinking about adopting a new technology that will require an entire rebuild. Or, you’re deciding whether or not to kill off an outdated, yet loved feature. The outcomes of these decisions are pretty much impossible to walk back on.
How to use the S.P.A.D.E decision-making framework as a team
S.P.A.D.E is a balancing act between soliciting team feedback and making an individual choice. The process is run by whoever will actually be responsible for making the decision. (i.e. whoever has a big R beside their name on the RACI chart).
It starts with documenting the settings of your decision - what, when, and why.
What: Articulate the decision as clearly as possible. Be precise about the choice or set of choices you’re making.
When: Set a clear deadline and explain why it must happen by that date. Deadlines can seem arbitrary and it’s hard to get buy-in if you can’t show why the decision must be made by that day. Look at your product roadmap and show any dependencies or key milestones that can back-up your deadline.
Why: Clearly establish why this decision matters. Talk to stakeholders and executives to hear exactly what you’re optimizing for and why.
Next, settle on and reach out to the people who will be involved in the decision. Think of this as a minimal version of the RACI chart we covered above.
In S.P.A.D.E, you need people who you should consult (give input), approve, and be responsible (for both the execution and results).
Now, it’s time to brainstorm a list of alternatives. Bring together the people who will be consulted to discuss options that are:
Feasible: They are realistic given your current situation.
Diverse: They’re not a ‘reworded’ version or micro-variant of another choice.
Comprehensive: They cover the entire problem space, not just one angle of it.
Whenever possible, add in some quantitative data to support each alternative. Why is this a better (or viable) option?
Once you’ve laid out the options, it’s time for consultants to vote and for you to decide.
Ask for private feedback on options including a voting system (1-5, yes/no, etc…) and a few lines of reasoning. Then, make your decision based on the information available to you.
Finally, you need to explain and announce your decision.
Go to the approver with your choice, top alternatives, and reasoning why you picked what you did. If you’ve done your homework, all your stakeholders should be on board (even if they aren’t entirely happy).
When everyone’s committed to the option, send out an update to the company or team with a summary of the process. This helps you get buy-in and explains the process to people who weren’t involved.
Adding your decision to a project management tool like Planio is a great way to document it for everyone across the company. You can even create template issues for announcements to make it easier each time.
Common S.P.A.D.E pitfalls to watch out for
With so many pieces, the S.P.A.D.E framework offers lots of potential pitfalls. Here are a few you should especially be careful of:
Not bringing in enough people to consult. Big decisions require a wide range of voices. Allow as many people as possible to weigh in before making your choice.
Being unclear about the what and the why. The setting might seem basic, but it’s the crux of your decision. If you can’t articulate what you’re deciding and why it matters (and why now), you need to start over.
4. PDD - Parameters, Deliberate, Decision
Some hard decisions require consensus (rather than an all-powerful decision-maker).
In those cases, you need a decision-making framework that is more collaborative than some of the other ones we’ve covered.
What is the Parameters, Deliberate, Decision (PDD) decision-making framework?
The PDD decision-making framework comes from the team at Coinbase. After being slowed down too often by endless meetings, personal issues, and constant second-guessing, they set about deciding the core criteria that every decision at their company should go through.
Those core criteria are:
Parameters: This step involves getting everyone on the same page with the specifics of what you’re deciding, why it’s important, when it’s going to happen, and who is involved.
Deliberation: Next, they do multiple rounds of voting and deliberation on each option to gather as many opinions and data points as possible.
Decision: Finally, the decision is made and a short explanation is sent out to the full company.
When should you use PDD for making decisions?
PDD is a flexible decision-making framework that can be used for everything from naming products to hiring teammates or even prioritizing features.
It’s slightly more lightweight than the S.P.A.D.E framework, which makes it a good option for reversible decisions. However, by putting the focus on team collaboration, it can also be used for large decisions where you want more input and consensus as possible.
How to use the PDD decision-making framework as a team
The PDD framework follows the same basic steps as some of the other ones we’ve covered but with a slight twist that makes it more ‘consensus-friendly’.
First, you set the parameters and context for the decision. The Coinbase team includes the same information each time in the parameters section:
What are we deciding?
By when?
Who is the decision-maker(s)?
Who are the input providers?
Who is affected by the decision?
What type of decision is it?
How long will we commit to the decision?
What is the earliest date to revisit?
How many votes per person?
There are a few interesting elements here.
First, the ‘revisit date’ gives you a clear date for analysis and potentially reversing your choice. This is a powerful way to make people feel like, even if they don’t get the result they want, a decision isn’t set in stone.
Next, there are the ‘types’ of decisions. A decision can be either:
Binary: Yes/no answer such as hiring an employee or buying a company.
Prioritization: Forced ranking of options, such as prioritizing your next features to build.
Choice: Choosing a single option from unlimited options, such as naming a product.
The next step is deliberating by voting on the available options.
Deliberation follows a specific process as well:
Add options and explain the context. Start by asking everyone to add any additional options that might have been looked over. Then, present data and supporting documents for each choice.
First round of voting (blind). Ask everyone to vote once without anyone else seeing. This will help you capture the ‘temperature of the room’.
Discuss pros and cons. Give everyone the option to share why they picked the option they did. Update the list if new or better options come up.
Second round of voting. Get everyone to vote again based on the discussion.
Finish up or continue discussion and voting. If you get a clear consensus, you’re done! Otherwise, repeat the process again to gain additional clarity.
Finally, the decision is made and communicated in a short and simple way.
All that’s left is capturing the choice and communicating it to the rest of the team. How you communicate it is up to you, but make sure to memorialize your decision-who made it, when, and why - for later review.
Common PDD pitfalls to watch out for
PDD is a collaborative decision-making framework and so it’s great for avoiding the individual biases of a single decision-maker. However, it still has a few pitfalls to watch out for:
Too many cooks in the kitchen. The more voices you include, the harder it can be to get a consensus. Try to find a balance between diversity of voices and a manageable group.
Defaulting to seniority. The blind vote can get poisoned if senior team members speak early (and others are afraid to voice different opinions). Let everyone have their say and explain their rationale.
Being too democratic. In the end, the choice is up to the decision-maker. Don’t feel compelled to only pick the option with the most votes if there’s one with stronger reasoning.
When should you use a decision-making framework?
The decision-making frameworks above should cover just about every scenario you can imagine. But what’s just as important as knowing what framework to use is knowing when you should or shouldn’t use one.
Not every project decision needs a framework (i.e. no one should be busting out a RACI Chart to pick where to order lunch from!) However, there are a couple of ‘golden rules’ for when a framework absolutely should be employed.
First, when your choice is ‘irreversible’ (or reversing it will introduce significant risks).
Here’s Amazon CEO Jeff Bezos explaining the difference in an annual shareholder letter:
“Some decisions are consequential and irreversible or nearly irreversible-one-way doors and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions.
“But most decisions aren’t like that - they are changeable, reversible - they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.”
Second, when your company, team, or project includes a lot of voices.
Most decisions will only impact a few people. But when you’re working on a major project, choosing key features over other equally exciting ones, or dealing with a significant number of stakeholders, you want to make sure decisions are clearly articulated and backed up.
Most frameworks can quickly be reworked into a deck or doc to present your choice in a clear and concise way.
Beyond frameworks: The art of building a culture of clear decisions and trust
Decision-making frameworks give you a systematic way to work through your options. But your team and stakeholders aren’t robots.
Decisions have emotional and cultural impacts as much as technical and business ones.
Decision-makers need to have conviction but also be able to acknowledge when a better option arises.
The art of decision-making is what allows you to make choices that everyone is happy with, even if they don’t agree with you. While there are book’s worth of insights into how to make better decisions as a leader, the most important tips can be distilled to these seven:
Start with a clear set of guiding principles. Many companies have vague values. But clear, internalized principles set a context and shared understanding for every decision. If one of your company’s guiding principles is ‘move quickly’, everyone will understand why you’re prioritizing quick decisions over prolonged deliberation.
Read the room. Emotional intelligence (EQ) is one of the greatest leadership skills you can have. When it comes to making smart decisions, your team wants to feel heard and understood. Don’t get so caught up in the decision that you miss the temperature change in the room.
Practice ‘strong opinions, held weakly.’ Decision-makers need to have conviction but also be able to acknowledge when a better option arises. Bring in data whenever possible to help you have strong opinions that can shift with the situation.
Be transparent about decisions across your team. Even if someone isn’t directly involved in a decision, they’ll still want to know it’s taking place.
Focus on speed. Dragging decisions out kills morale. Most of the decision-making frameworks we outlined above can be adapted to take hours, days, or weeks. Choose a timeframe that respects the gravity of the decision.
Know when issues are additive or multiplicative. Some risks and costs add a single headache to your life, while others can split your head wide open. As the team at Farnam Street explains, Nikola Tesla failed to understand multiplication by zero and how his inability to work well with others could completely sink his career. Be careful that you’re not mistaking an additive risk of making a decision for a multiplicative one.
See through the eyes of your team. Whenever possible, take a step back and try to see the decision through the eyes of someone completely different. If you’re a senior developer, ask how this decision will impact the new junior UX designer on your team.
The 5 biggest flaws in decision-making
Lastly, you can’t make the best decision if you’re starting from a flawed position. As the project manager or product owner, you’ll be responsible for making calls that impact your team, company, and industry.
As a final gut check before you go all-in, make sure you’re not falling into one of these common decision-making mistakes:
Mistaking the symptom for the problem. Are you solving the right problem? Understanding your sales dropped 10% is a good place to start. But you need to know why they dropped before you can start making decisions around how to turn it around.
Defaulting to a giant spreadsheet of data. Data is one of your greatest tools when you’re making decisions, but it can be misleading or also act as a scapegoat for making a decision based on experience and consensus. Be data-informed, not data-driven.
Getting sucked in by personal biases. No one is truly objective. But you need to understand when you’re falling victim to the mental or personal biases that can cause poor decision-making. Here’s a short list of cognitive biases you should be aware of when it comes to making decisions.
Making false assumptions. Before you jump into options and alternatives ask if your assumptions are right to begin with. Remember, you can’t accurately predict anything that happens in the future. If you catch yourself being ‘sure’ you know the answer, it might be time to slow down.
Going with your gut. Listening to your gut has probably gotten you to where you are now. However, when it comes to complex decisions, you need to bring in more sources of data and more diverse voices. Listen to your gut but don’t get swept away by it.
Remember, you can’t accurately predict anything that happens in the future. If you catch yourself being ‘sure’ you know the answer, it might be time to slow down.
Why ‘this time’ isn’t different
The best thing about building your core decision-making skills is that they can be applied to anything. The situation, company, and team you’re working with might be wildly different, but the elements of coming to the best decision will stay the same.
Get Everyone on the Same Page.
But failing to recognize the similarities that all decisions share is a surefire way to make history repeat. As the team at Farnam Street writes:
“This time is different could be the 4 most costly words ever spoken. It’s not the words that are costly so much as the conclusions they encourage us to draw.”
With a toolkit full of decision-making frameworks, a clear process for engaging your team, and the confidence to take your decision all the way, you’ll be prepared for every and any situation.