Choosing Wisely: 5 Effective Decision-Making Models for Better Results

We make thousands of decisions every single day. We choose what to have for breakfast, what outfit to wear, and what route to take to work. Most of the time, these decisions are made unconsciously – yet, it’s always the result of our choice.

In the workplace, we often need to make serious decisions while being time-constrained and lacking context or information. No wonder that we make mistakes. However, there is a tool that can help you get better at decision-making, in a structured manner, and with limited resources. This tool is a decision-making model.

Below we will discuss five basic decision-making models you can apply to make the right choice both in your professional and private life. 

• What is a decision-making model?
• The importance of different decision-making models
• 5 examples of decision-making models

What is a decision-making model?

A decision-making model is a structured approach or framework that helps individuals or teams make informed and rational decisions. Using a specific model allows you to analyze a problem, evaluate alternatives, and select the best course of action. The value of decision-making models lies in their clarity. You will have an idea of:

• who will be the one making a decision
• to what degree team members will be involved
• by what means the decision will be made

Decision-making models save the time and effort needed to find a solution. They can be used both by an individual or by a team. When applied by a team, they encourage collaboration since each person is involved in the process. This also means more commitment, because people tend to be more committed to decisions to which they made an input.    

The importance of different decision-making models

Some of the decisions we make might potentially have a huge impact, creating a domino effect. Yet, even when it comes to truly serious decisions, we often do not use any structure, just letting things happen.

Business decisions directly affect the future of a company. Yet, in organizations, decision-making is often ineffective. In a Mc Kinsey Global Survey, only 20 percent of respondents said their companies excel at decision-making.

But ineffective decision-making comes with a cost. It decreases productivity, which can be translated into profit loss. For example, respondents mentioned they spent 37 percent of their time making decisions, and more than half of this time was spent ineffectively. It means that 530,000 days and approximately $250 million were lost each year.

So why are models of decision-making important?

• They can help leaders and teams work smoothly and collaboratively toward finding a solution. They provide a clear algorithm of action and let the team avoid confusion.
• They save time and help with time management. Time is money. If it takes you a lot of time to make a decision, you lose financial opportunities.
• They make people more organized. When you’ve got steps to follow, it’s easier to find a solution. It gives you confidence and motivation, rather than feeling your way in the dark.
• They reduce the risk of mistakes. Of course, decision-making models cannot fully eliminate the risk of mistakes – yet, they can prevent you from making the wrong moves where it’s totally avoidable. 

5 examples of decision-making models

There are several decision-making models. The variety of frameworks lets people with different learning styles find something that works specifically for them.

Roughly speaking, all of the models are about the same thing – they let you analyze the situation and find the best solution. 

Let’s take a look at some of the most popular decision-making models.

1. Rational decision-making model

Human decision-making is complex. On our own, our tendency to yield to short-term temptations, and even to addictions, may be too strong for our rational long-term planning. – Peter Singer, an Australian phisolopher

The rational decision-making model is about applying logical steps to reach the best possible outcome. It consists in analyzing multiple alternatives through credible facts, excluding any emotions, and focusing on objectivity. This approach is logical and brings order, this way ensuring consistency and discipline.

The five-step rational decision-making model was identified by the author Nigel Taylor in his 1998 book “Urban Planning Theory since 1945”, and was initially used in urban design and planning.

How to make decisions rationally:

1. Define the problem/goal. Make sure you clearly understand the issue or the goal. Describe it as precisely as possible. Your definition will directly impact the rest of the steps.
2. Identify the criteria for the process. Do your research. Collect relevant information that will be useful to find a solution. This step will require both analytical skills (to analyze the data) and critical thinking (to be able to filter information.)
3. Make a list of options. Think of potential solutions to your problem and develop several alternatives. Support each of the options with evidence, explaining how exactly they can help you reach the outcome.
4. Calculate the consequences of the solutions you identified. Each of the options on your list will have a different value, based on their potential of leading you to success. You can arrange the options according to their value.
5. Pick the best option. Out of the alternatives with the highest value, choose the best one.

After that, you’re supposed to finalize your decision. Let those whom it concerns know about your decision. Ask if they have questions. Once you’re sure the decision is the right one, take action to implement it.

Advantages of the rational decision-making model:

• Reduces the chances of errors and subjectivity
• Promotes consistency and logic
• Uses facts and accurate information

Disadvantages of the rational decision-making model:

• Is time-consuming and demands careful consideration
• May impede innovation
• Doesn’t let seize opportunities, which often requires immediate action

When to use:

Rational decision-making model can be valuable when it comes to serious choices and when you have enough time to approach your issues with some logical analysis.

Examples:

Career and education choices, big business decisions (like purchasing expensive equipment), choosing a new person to hire or a city to live in.

2. Intuitive decision-making model

The intuitive mind is a sacred gift and the rational mind is a faithful servant. – Albert Einstein

The intuitive decision model involves feelings, emotions, and instincts to find the best solution. It’s less rigid and structured.

Intuition, which is an unconscious way of thinking, can provide us with good answers without explaining why they’re good. It’s expressed in a form of a sensation telling us that something is true, not providing any evidence.

Basically, intuition is formed from our previous experience, accumulated in our subconscious mind. This is why intuitive decision-making is a fast and automatic process – the solution just comes to your mind.

How to make decisions intuitively:

• Define the goal. Like in the rational model, you start with identifying the goal.
• Be aware of your biases.
• Determine a solution.

Advantages of the intuitive decision-making model:

• It’s a very fast method of decision-making.
• It’s accessible to everybody regardless of their educational and professional background.
• It can be used together with other models of decision-making – for example, with a rational analysis.

Disadvantages of the intuitive decision-making model:

Since intuition is the result of our emotions and personal experience, it has limitations, which should be recognized. There are several factors that might impact our intuitive decisions:

• Biases. That’s self-explanatory.
• Inaccuracy. Sometimes a decision that worked in the past will not be appropriate in the current situation.
• Overconfidence. We may simply lack information to make an informed decision, but our confidence doesn’t let us see.
• Emotional influence. Our emotional state highly impacts our spontaneous decisions and may lead to the wrong choices. In addition to that, intuition may be difficult to apply in a group. Every person has a different experience, so it may cause a clash of opinions.

When to use:

Intuition is easy to use – it’s natural, and it doesn’t require any expertise. It can be very helpful in situations when you need to make a decision immediately.

Also, intuitive decision-making works for ambiguous situations where it’s hard to say what’s right and what’s wrong. 

Examples:

Choosing a life partner or friends, a place to work at, immediate decisions about life safety.

Intuition is widely used by businessmen too. We can mention such names as Henry Ford, Bill Allen (the CEO of Boeing in the 1950-s), and Travis Kalanick (Uber's CEO) - these people would trust their intuition, their “gut feeling,” despite the reasoning of their logical mind.

3. Recognition-primed decision-making model

Intuitions depend on the patterns we have acquired. Insight is about gaining new patterns. – Gary A. Klein, a research psychologist

This model, which some sources consider as a subtype of the intuition model, was developed by psychologists Gary A. Klein, Roberta Calderwood, and Anne Clinton-Cirocco. Klein described the process in his 1999 book “Sources of Power: How People Make Decisions.”

The researchers aimed to analyze how people make decisions under pressure. For this reason, they studied the decision-making process of firefighters, nuclear technicians, and medics – in other words, people who make serious life-or-death decisions on a daily basis.

This model is based on “pattern recognition” – on remembering similar experiences that happened in the past. In high-pressure situations, we use those patterns as examples and let them influence our decisions.

How to make a recognition-primed decision:

All in all, the recognition-primed model can boil down to just three main steps:

1. Experience the situation. You simply look at what’s going on around you.
2. Recognize the situation. At this point, we see if the situation is similar to something we’ve already experienced before. We may notice similar patterns or cues that would function as indicators.
3. Implement the decision. Recognizing a pattern, we recreate it in the current situation since the pattern worked the previous time.

This is a simple recognition-primed decision-making process. There are also two more scenarios, developed by Gary Klein and David Klinger:

Intermediate recognition-primed model (used when the level of situation complexity is higher:)

1. Experience the situation.
2. Recognize the situation. Consciously evaluate reactions prior to initiating your plan.   
3. If the decision is good, implement it. If not, modify it.

Complex recognition-primed model (for complex situations:)

1. Experience the situation.
2. See if the situation is familiar.
3. If the expectancies are violated, look for more information.
4. If the expectancies are confirmed, develop a course of action and implement a plan.

Advantages of the recognition-primed model:

• You can prevent many problems because you already know you can do it.

 Disadvantages of the recognition primed model:

• It requires you to have proper knowledge or experience.

When to use

The recognition-primed decision-making model is used when time is limited, information is incomplete, and goals are not clearly defined.

Examples

RPD is used by trauma nurses, firefighters, chess players, stock brokers, and other people whose job requires routinely making serious decisions.

4. Creative decision-making model

Organizations with decision-making speed and imagination will thrive as nobody can claim to have a monopoly over creativity. – N.R. Narayana Murthy, a cofounder and a retired chairman of a tech giant Infosys

Creative decision-making is about finding unique ways of solving problems. Applying this model, you look for different perspectives to discover something new.

The creative decision-making model stimulates your curiosity, encouraging you to generate ideas. This way, it promotes progress and innovation, changing your perspective from seeing a problem as a difficulty to viewing it as an opportunity for growth.

In his 1926 book “The Art of Thought,” a social psychologist Graham Wallace outlined 5 stages of the creative process, which are still considered valuable. These are as follows:

• Stage 1: Preparation. At this stage, you gather the material and look for sources of inspiration. This is when you do the brainstorming. 
• Stage 2: Incubation. You take a break, letting your subconscious mind do the work for you and develop new ideas.
• Stage 3: Illumination. It’s the moment when the idea actually comes to your mind.
• Stage 4: Evaluation. Now you think of your idea critically, doing the research or asking for feedback.
• Stage 5: Verification.  This is when your idea gets shaped and comes into real life.

With this information in mind, let’s see what the steps of the creative decision-making model are.

How to make a creative decision:

1. Explore your options. Brainstorm ideas.
2. Be brave. Some ideas may seem unusual, even outrageous, but don’t rush to render them useless. 
3. There is a special technique of thinking developed by a Maltese philosopher Edward de Bono - a so-called “six thinking hats” method. Each of the hats represents a particular type of thinking, which a person can use in turn, to avoid the confusion of emotions, facts, and logic.
4. The green hat, in particular, represents creativity. De Bono emphasizes that under the protection of the green hat you can provide any ideas without the fear of being ridiculed. You do an experiment, and you can be provocative – for the sake of finding the best idea.
5. For example, you can suggest removing or, vice versa, creating a whole department. The idea sounds crazy but who knows, maybe it will work and be beneficial for the company.
6. Pick a usable solution. Think if your idea can be brought to life.
7. Finalize your decision.

Advantages of the creative decision-making model:

• It drives progress, letting you explore new horizons.
• It creates a positive environment, as it assumes that every idea is worth considering.
• It increases commitment.

Disadvantages of the creative decision-making model:

• Our creativity highly depends on our mood. Mood swings can negatively affect it.

When to use:

This method will be useful in any situations that require you to think out of the box.

Besides, you can use a creative decision-making model for situations that are new to you, like projects you have never worked on. Without any previous experience that might affect your decisions, it will be easier for you to look at things from a fresh perspective.

Examples:

Creating new products and services (or updating existing ones,) improving the look of your office building, or developing uniforms that would be both comfortable and reflect the mood of the company. 

5. The Vroom-Yetton decision-making model

Leadership depends on the situation. Few social scientists would dispute the validity of this statement (Victor Vroom, Arthur G. Yago)

This model is named after Victor Vroom and Philip Yetton, who originally developed it in their 1973 book “Leadership and Decision-Making.” Basically, it is a leadership theory suggesting that the choice of leadership style depends on the situation, reflecting the requirements of an organization.

Different scenarios will need different decision-making processes. The Vroom-Yetton framework gives you a number of options to pick from, letting you choose the one that would direct you to the best outcome in your situation.

The Vroom-Yetton decision-making model requires you to consider three factors before using it. These are:

• Decision quality. Think if the decision you are going to make is that important. Some choices have more importance than others. It’s not always feasible to apply a vast amount of resources like time, people, or information to make the right choice.
• Team commitment. While some decisions will have a big impact on your team, others won’t. If other people will be affected by the decision, it makes sense to involve them in the decision-making process.
• Time constraints. Sometimes you’ve got plenty of time to spend on looking for the best decision. But it’s not always the case. When time is limited, it’s smarter to make a decision on your own.

In the Vroom-Yetton decision-making model, there are five basic processes:

1. Autocratic (A1) – In this process, you use available information to make a decision, not asking your team for input.
2. Autocratic (A2) – To make a decision, a leader needs specific information from the team. Yet, the final decision is taken by the leader. It may or may not be shared with the team.
3. Consultative (C1) – A leader receives information from team members individually before making a decision. Each team member discusses, evaluates, and shares information individually.
4. Consultative (C2) – A leader gathers a team for a group discussion.
5. Collaborative (G2) – A decision is made collaboratively by a group, and a leader supports the group during the process.

To determine which model you should use, you are supposed to answer some questions. By saying yes or no, you will go down the tree diagram, which will eventually lead you to the perfect process.

The questions are as follows:

• Is the decision important?
• Is team commitment important for the decision?
• Do you have enough information to make a decision without the input of others?
• Is the problem well-structured?
• Would the team support your decision, made without their participation?
• Does the team share the company goals?
• Can the decision cause a conflict among team members?

In 1988, the model was enhanced by Vroom and Arthur Jago and described in their book “The New Leadership.” The newer model includes more questions that cover other constraints, such as geographical location.

Advantages of the Vroom-Yetton decision-making model:

It’s flexible. You can pick a specific model for any situation.

Disadvantages of the Vroom-Yetton decision-making model:

The questions used in the model may not help pick the ideal solution. Besides, the model doesn’t take into account such factors as emotions and team dynamics. 

When to use:

When you need to find the best decision-making approach, or when you, as a leader, want to choose the right leadership style based on organizational requirements. 

Examples:

Autocratic (1) – If your decisions require speed and decisiveness, you will use an autocratic process. This model is popular among many entrepreneurs.

In particular, Steve Jobs was considered as an authoritarian leader, even a dictator. This model worked for him since Jobs was an unusually talented and creative person – yet, not very likable.

Autocratic (2) – One of the representatives of this decision-making mindset was Bill Gates. He would collect information and facts during his meetings, analyze them, and then make a decision by himself.

Consultative (C2) – An example could be Jim Lentz, the Chief Executive Officer of Toyota Motor North America.

Consultative (C2) – Mary Kay Ash, the founder of Mary Kay Cosmetics, would care for the need of her employees.

Collaborative (G2) – during the first years of the Disney empire, this was the model Walt Disney followed. He would give his people creative freedom and develop a healthy collaborative environment.       

Some people may say that following decision-making models would take too much time and require too much preparation and resources. However, when applied appropriately, they can bring brilliant results. So pick the model that you find the most comfortable, use the structure it offers, and notice the difference between this new experience and what you typically go through while making a decision.