How to Prioritize Decisions for Better Outcomes: A Useful Decision Matrix

Prioritizing decisions is crucial, especially as responsibilities grow. I want to show you how to prioritize decisions using a simple decision matrix, so you focus on what matters most.

Published on 01-07-2024

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Understanding Decision Types

Your success as a manager/IC/adult hinges on the right decisions & your execution.
When you have limited scope, it is much easier to make the right decision since:

1. They tend to resemble each other, so you can use heuristics to decide.
2. Mostly, others will take the burden of those decisions and direct you.

As you amass grander responsibilities and start wearing many hats (Parent/director/advisor/friend),
your decisions matter greatly; hence, you need to scrutinize them. 

One of the main pitfalls I fell for was treating every decision similarly, which was tragic. 

I spent my time on trivial matters, leaving me too fatigued to make important decisions.

I made the right shot, but too late.

I made decisions early when I should have weighed my options more carefully. 

Reversible vs Irrevirsable

Later, I corrected my course but didn’t have the right mental model until I heard Jeff Bezos in this video.
He said:

Reversible decisions are like doors that open both ways. Irreversible decisions are doors that allow passage in only one direction; if you walk through, you are stuck there. 

He advised that you move quickly when you make reversible decisions and slow down when you make irreversible decisions.

Low Impact vs High Impact

While Jeff Bezon indirectly alludes to considering the decision’s impact as another dimension, I found that the Stripe CEO made it clearer here. He said:

The second thing is not to treat all decisions uniformly. I think the most obvious axes to break them down on are degree of reversibility and magnitude. Things with low reversibility and great impact and magnitude, those ones you do want to really deliberate over and try to get right.

Why Prioritization Matters?

Quality of your life = Quality of decisions you make.
However, you will have many decisions to make, and you don’t want to treat them all
the same. If you do, you will run the risk of:
You make irreversible decisions prematurely when you should have waited and delay the reversible decisions when you should have already acted on them.

Simple Matrix to prioritize decisions

Building on the wisdom of Jeff Bezos & Patrick Collison, here is a simple matrix to identify decision types and optimize accordingly:

Low Impact / Easy to Reverse

These are your rubber bands. They are simple choices that can be easily undone or adjusted, like rubber bands snapping back into place.

You should move fast here or delegate if you can. 

Here are real examples from my own real life:

• Work-Related:
  • Example: I wanted to settle on an Asana template for my 1-1 with my direct reports.
  • Decision: Rather than creating one from scratch, I settled on an available template and decided on the format ( action items, discussions) on the spot. A week earlier, I changed the template.
• Personal:
  • Example: I wanted to watch a series on Netflix with my wife.
  • Decision: I picked a recommendation ( Dark) from my in-laws. It turned out well. If not, we could have paused it and moved on to the next. 

Low Impact / Hard to Reverse

It has a low impact ( won’t break you if you got it wrong) but is hard to reverse (Limited opportunity window, legally binding, or high switch costs). 

They might seem minor at first, but once they’re done, they’re hard to undo, much like a drop of glue.

I like to break it into 2 types further:

1. Low impact, low frequency ( Occurs one time or few times). Examples:
   • Work 
     • Situation: Selecting an email automation software for your company. While the initial setup is easy and not costly, changing later can lead to significant operational disruptions and potential loss of historical data.
     • Decision: Try it first before you purchase it. Roll out slowly before you fully commit.
   • Personal:
     • Situation: Choosing a color to paint your room. Easy but troubling to redo later.
     • Decision: Observe different samples under different lighting and see how they fit in with the decors or delegate it to whoever cares about it the most, AKA YOUR WIFE, as I did:P

Side Note:
I really love to empower my team to make decisions. One of the best companies that does this is Netflix, where they exercise less control and more context. Here is a great article that explains more about it. 

High Impact  / Easy to Reverse

These decisions are significant and valuable but can be reshaped and adjusted as needed, similar to molding clay.

Jeff Bezos sums it up rather well in Amazon’s 2016 shareholder letter. He said:

Many decisions are reversible, two-way doors. Those decisions can use a light-weight process. For those, so what if you’re wrong?

most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure

Get comfortable enough to make a decision ( 70% or 80%), or better yet, stop when you don’t have any more useful information ( all new information repeats what you have already gathered).

Examples:

• Work-Related:
  • Example: Launching a new marketing campaign.
  • Decision: Roll out the campaign quickly. You can adjust the strategy or halt the campaign without major repercussions if initial feedback is negative.
• Personal:
  • Example: Joining a new fitness class.
  • Decision: Sign up and attend a few sessions. You can easily stop going if it doesn’t fit your schedule or interest.

High Impact / Hard to Reverse

These critical and far-reaching decisions require thorough consideration, as they are difficult to change once made.

Treat it like trimming your mustache. You always want to double-check your trimmer blade, as you only have one chance. 

Here, you want to apply extreme scrutiny: 

1. You want to gather all the data.
2. Talk to all the people who you know and who you do trust.
3. Invest initially, even before implementing
4. Talk to all the impacted people. 

Example: Doing major restructuring in the organization or entering a new market. 

Summary

• Act quickly on reversible decisions and slowly on irreversible ones.
• Focus on high-impact decisions, avoid wasting time on trivial matters, and
  empower teams by providing context.
• Quickly decide or delegate low-impact/easy-to-reverse tasks.
• Test before committing to low-impact/hard-to-reverse tasks.
• Measure twice and cut once for high-impact/hard-to-reverse tasks.
• Make decisions when 70-80% certain and adjust as needed for high-impact/easy-to-reverse tasks.