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How to Turn Complex Choices into Hard Numbers

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I was recently struck by writer and entrepreneur Chris Guillebeau‘s recommendation for a way to choose between a number of possible business opportunities, and I realized immediately that it was applicable not just to business decisions, but to any choice that involves a lot of competing possibilities with different pros and cons. It’s not a new idea, but it’s a useful one if you want to take a lot of possibilities and end up with a single score for each one so you can decide which is best.

In a nutshell, what you can do is figure out what factors are important to you and rate each idea or possibility on a scale of 1-5 for each of those factors. You can use paper, a word processor, a spreadsheet, or another medium. What you get in the end is a grid, kind of like this:

The 5-point scale
Why a 5-point scale? Because it’s detailed enough to be able to distinguish between levels like “terrible,” “bad,” “OK,” “good,” and “great” while not so detailed that it’s difficult to decide what value to assign. The process isn’t supposed to be surgically precise: it’s just meant to show us which way the wind is blowing. Our quick, subjective impressions of each item will generally be good enough information to provide the answers we’re looking for.

Keep in mind that 5 always means “best,” not necessarily “highest.” For instance, Hawaii has a 1 for “cost” not because the cost is low, but on the contrary because the cost is high and therefore merits the worst rating.

While I think a 5-point scale is especially handy, you can use any scale you want (say, 1-3 or 0-10, etc.). Just be sure to use the same scale for every factor.

Instant insight
You can see right away how this approach is handy. For instance, Hawaii might sound great, but when you factor in the very high cost and the lower amount of relaxation you experience because of airports, reservations, and all the rest, it doesn’t stack up as well (using this method) as the other two options.

Weighty questions
With that said, there’s a major problem with the system as Guillebeau and many other people use it, which is that it treats all considerations as equally important. In many cases, that works out fine; as I say, we’re just trying to get a general direction. In other cases, though, it can be … well, less than ideal. Consider the following example:

Using this approach, it’s easy to see that it’s better to dive without a parachute than with one–except that … you know … it isn’t.

So how do we fix this problem? By using weightings!

What are weightings? They’re just a way of adding up or averaging information proportionate to other information, in this case to information about how important each item is. By introducing weightings, we can let our grid reflect our priorities. Consider this new version of the skydiving grid:

Our totals have changed completely, and they shouldn’t be compared to totals from any other grid, but they tell a clear story: even for this obviously danger-loving individual, skydiving with a parachute is a much better choice than skydiving without.

Of course, using weightings is more complicated than not using weightings, especially in terms of calculations, because you have to multiply each rating by its weighting before you add things up. If you don’t want to get technical, I’d like to invite you to skip down to the picture of the kitten now, and I’ll mention that I can probably upload a template that won’t require you to do any of the technical work if enough people want it.

If you don’t mind getting technical and are following along in Excel, here’s how I set up the spreadsheet so that the total would use the weighting values I specified:

The little $ signs, in case you haven’t used them in Excel before, mean “use the row (or column) I specify even if I copy this formula somewhere else.” By referring to B$4, C$4, and D$4 instead of B4, C4, and D4, we can copy the formula from F5 into all of the rows below, even if we add a hundred options, without having to change the formula.

Just useful; not miraculous
Weighting isn’t perfect either, of course. It’s hard to put hard numbers on the relative importance of things like “environmental friendliness” and “good for the kids,” say, and if we just put the highest importance on everything, then we might as well not be using weightings at all. Also, if we have two different but related factors (like “general aesthetics” and “goes with the furniture”), then both of those add together to give them a weight that’s probably higher than intended–although if we’re using weightings, this can be fixed by cutting both weights roughly in half because the two are in a sense working together. This same problem comes up if we don’t use weightings, but in that situation, there’s no good way to fix it, so that’s another point in favor of using weightings instead of unweighted ratings.

I don’t want to lose sight of the benefit here: the amazing thing is that you can take any number of choices–just a handful or hundreds–and evaluate them all at the same time. There are other ways to make these kinds of choices, like filtering and sequencing (see “How Fewer Choices Make for Better Decisions“), but using weighted ratings makes it possible to evaluate them all at once and to tweak the decision-making process afterward to see how that changes things. (Because you can always decide to add or change your ratings or alter their weights, and in a spreadsheet or similar solution, those changes will immediately show new scores.)

Using your results
If you’re using a spreadsheet, you can sort by totals when you’re done (in Excel, highlight all of your data, including the choice names and the totals, then choose Data > Sort) so that your choices are then listed in the order from best to worst, according to your spreadsheet.

You don’t have to then make the choice at the top just because it got the highest score: again, this process is just a way to put things in perspective. However, that perspective can be invaluable for figuring out what to actually do next.

My example
I put together a spreadsheet for myself of a few of the many, many speaking and writing projects and possibilities I’ve started or considered, and set it up using weighted ratings, as I’ve described above. Having a technical background and being very interested in squeezing every last drop of meaning out of my information, I made some further enhancements, which you can see here. Note the little red corners: those mean that I can hover over the factor with my mouse to see details of how I should rate, so that I can assign ratings consistently. I’ve also used conditional formatting to highlight better and worse information with different colors. (You can click on the image to see it at full size.)

If you’d like a copy of my template for the grid above, please comment here. I’ll put something fairly user-friendly together and post it if there’s a need.

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