The discipline of decision making is an integral part of any successful business. A lot of businesses rely heavily on decisions they make behind the scenes to keep moving forward. For example, you probably know that Amazon has its own internal system for organizing and tracking all of their products.

Their website alone contains well over a million different items! They manage this by using something called decision architecture.

Decision architectures are systematic ways to organize information so that you can make more informed decisions in real time. Systems like these take time to create, but once implemented, they have lasting benefits that move your company forward.

Google’s search engine is a great example of this - it has been around for years now, but still receives major upgrades every few months. This is due in large part to the fact that the people who work there develop strategies and rules about how to classify and sort content into results.

It is important to note that not everyone at Google uses the same exact methods, nor is anyone ever required to add or change anything within the engine- what we refer to as “decisions”. But overall, many people are paid very well to come up with smart ideas that help the other employees make better choices.

Types of decision architecture

So what is decision architec- oh, you mean like choosing between foods? Or deciding whether to go out for dinner or stay at home?

Well, that’s kind of boring! More interesting decisions are ones where your choices have lasting impacts — on yourself or others.

Decision making in these situations requires you to consider not just if there is a better option, but also how each choice will affect you long term.

This includes emotional effects such as feeling good about yourself after picking an action, or feeling bad after selecting something harmful. It also means considering physical health consequences of each choice, and figuring out which choices can be limited in number over time.

Here are some examples of important decisions with potential positive and negative outcomes:

Making big life changes (like quitting your job to pursue your dreams) could lead to success or failure, depending on your preparedness for it. Deciding whether to take a new position require you to think about things like whether you have enough savings to live on for a few months, and whether you feel confident in your ability to fulfill your responsibilities while living off less money.

Making small lifestyle changes (giving up sugar or meat, for example) may help you feel happier, even if they don’t make much of a difference to your overall health.

Risk assessment

The second major component of decision architecture is risk assessment, which involves identifying potential risks involved in making a choice. You will want to be as honest with yourself about what choices you have and how likely they are to work out well for you as possible.

Risk comes from taking actions that don’t seem like the most logical thing to do but may not turn out quite as planned. For example, choosing to go into a restaurant even though you don’t feel very hungry can lead to finding something you enjoy and learning something new.

Decision architects understand this concept because it applies to more than just eating food. It helps us make decisions in our lives by considering the possibilities and weighing them against each other.

For instance, if your goal is to get a job then deciding whether to study business or marketing could matter a lot. Business studies look good on a resume, while market research is a great way to find out more about product brands.

Alternatively, studying marketing might help you become familiar with the jargon used in field-focused jobs such as advertising or public relations.

Decision board

A decision board is an easy way to organize all of your decisions. This gives you and other people a visual framework for understanding how important each choice is to you. It also can help emphasize the fact that some choices are more significant than others depending on what you want from life and yourself.

A decision board includes three components:

The topic or area of the decision (what you’re deciding between) The Ranking system, which ranks one option over another Based on your priorities For example, if the options in the ranking were “should I stay or should I run away?” and “with whom do I have lunch today?,” then using the cost-effectiveness ratio as their ranking would rank staying over running away as the most effective strategy!

You can create your own decision boards to make this easier, but there are many pre-made ones online and through apps and software packages. Many use color coding so that it's easy to see who gets prioritized and why.

Decision tree

A decision tree is one of the most basic classification and regression techniques in data science. It comes with two main components, branches and metrics or criteria to evaluate each branch. Branches are categorized as either a parent node or an internal node. The child nodes represent questions that get asked along the way while evaluating the parent node.

The process then moves onto asking the internal node question depending on whether the outcome of the previous query was given a specific value or not. This is repeated until all possible outcomes for the final node have been evaluated.

A common use case for decision trees is predicting if someone will go into bankruptcy within twelve months. If we were to ask “have they gone bankrupt before?”, then “yes” would be a predictor for “yes” for the next part of the question.

This method can also be applied to more complex scenarios such as determining who among several candidates should receive a job offer.

The decision matrix

Let’s look at an example.

Say you want to choose between two products that do exactly the same thing, but one is better than the other at doing it more efficiently. You have no reason to prefer one over the other, so which one should you pick?

The standard approach to this problem is to determine how much each product benefits you and then picking the one with the highest benefit ratio. But there are cases where this can’t be used because it doesn’t make sense to compare things like efficiency.

For instance, what if one of the products costs $1 to use whereas the other costs $100 million? Obviously, the cost-benefit analysis wouldn’t work in that case!

In situations like these, we need another tool called the decision matrix. With the decision matrix, you don’t evaluate individual elements, you instead assess whether or not the overall choice makes sense. You check by asking yourself three questions:

Will choosing this option help me achieve my goal? Will it hurt me by failing to meet my other goals? If I chose this option, will anything bad happen as a result?

If your answer to any of those is yes, then you shouldn’t choose the option. That means the decision matrix gives us a clear cut way to decide when something isn’t worth it.

Now let’s apply the decision matrix to our previous example.

Multicriteria decision analysis

Multi-criterion or multicriticism is an analytic method that was first formally described in the 19th century. It’s become one of the most common types of decision making used by business professionals across all industries. The concept behind it comes from mathematics, where it was originally developed to help determine the best choice between several alternatives.

In management settings, MCA has been adapted to assess not just what option should be picked, but also how well each alternative performs in terms of important outcomes such as customer satisfaction, long term efficiency, and financial performance.

By incorporating these extra elements into the evaluation process, MCA allows you to make more informed decisions.

Service-based decisions

Another important decision architecture element is what we refer to as service-based decisions. This is when you instead of choosing one product or option over another, you choose to use a specific set of products or services instead.

For example, let’s say you are looking for a new pair of shoes that are durable and comfortable. You could go into a store and try on each shoe, but you would also have to compare them with your current ones which can be difficult if you don’t know which ones they are yet.

You could search online sites where you can get a deal on a pair of shoes, but it may not be clear whether or not their shoes match up with yours. Or maybe you find something beautiful about a certain type of footwear and want to buy that brand, but there isn’t an exact copy available at the moment.

By deciding to use a particular service to fulfill part of your goal, you have eliminated the need to make a choice between two things. You now have only one thing to select from. In this case, it is the service that will produce the desired result.

This way, you have made a more efficient decision because you didn’t have to spend time comparing different options, nor did you have to worry about finding the right one later.

The 5-step process

Over the past few years, there has been an explosion in interest around what we now call decision architecture or decision framework theory. A lot of people have labelled this area as ‘theory’ to emphasize just how important it is for shaping effective decisions.

Decision frameworks are systematic ways of structuring information so that you can make more informed decisions. They help eliminate the influence of irrational factors like emotion, bias, and perception by organizing key pieces of data.

In general, decision frameworks break down a situation into components, evaluate each component independently, and then combine all of these independent evaluations into one final conclusion.

The term “decision framework” was first used in 2006, but it wasn’t until two decades later that it really took off. That’s when professors from business schools started incorporating them into their research and teaching. Since then, they’ve become increasingly popular both within academia and industry.

Why are decision frameworks important?

We live in a world where technology constantly interconnects with every aspect of our lives. This constant connectivity creates new opportunities, challenges, and responsibilities for individuals. As leaders, we get drawn into creating technology solutions to solve ever-widening problems.

But before we can pick a solution, we need to understand the problem well. We have to be able to identify what needs solving and why it’s a bad thing.