5 Frameworks for Making Better Decisions in Entrepreneurship
Struggling with tough choices? Use these 5 frameworks to make clearer decisions.
We face challenging decisions daily as entrepreneurs. Having effective frameworks like the five I share below can help simplify tough choices.
Framework 1: Diverge & Converge
The diverge and converge approach to decision-making has been powerful for me and Curtis in our businesses. The basic principle is to generate as many ideas as possible in the diverge phase, then select the most valuable ones in the converge phase.
Diverge: Explore Many Ideas
While diverging, it's important to brainstorm as many ideas as possible, and to not filter yourself. Explore the decision broadly, encouraging wild or outrageous ideas. This generates options, and the more options you have, the more likely it will be that your best option is on the list.
Remember
While diverging, do not judge ideas. If you are diverging in your team or in a group, encourage ideas of all kinds to come out. NO JUDGEMENT.
Converge: Find the Essentials
Once you've explored a decision broadly through divergence, narrow down your options. In the converge phase, use specific criteria like market demand, cost, impact, or time to select the most valuable ideas. This is the time to judge the ideas to get closer to a decision. You may need to go through multiple rounds of progressively selecting fewer options.
Remember
While converging, judge ideas. Focus on finding what's essential and valuable from the ideas generated in the diverge phase.
Framework 2: Decision Matrix
A decision matrix is a powerful tool for weighing multiple options against specific criteria. For this approach, select criteria that align with your company values such as impact, cost, time, and brand fit.
Create a table using your favorite spreadsheet software:
- Notion (I highly recommend)
- Google Sheets
- Smartsheet
- Airtable
- Microsoft Excel
- Numbers
List options as column headings and criteria as row headings. Once you have the entire table in front of you, start evaluating. Consider each option (column), scoring it against the criteria (rows) on a scale from 1 (lowest) to 10 (highest).
Tip
Evaluate each option rather than each factor. This minimizes context switching and reduces your cognitive burden.
Once you've score all options, add up the scores in each column. The highest-scored option wins. If you still feel you need a deeper analysis, choose the best 2-3 options for another round of scoring with new criteria.
Framework 3: Pareto Principle
The Pareto Principle, or 80 / 20 Rule, suggests that 80% of results can be achieved from 20% of effort. You have an opportunity to leverage your energy by focusing on the highest-value 20% of activities in your business.
You can use the Pareto Principle as a decision tool in many ways. Here are a few examples we've used successfully in our businesses:
- Plan each week with a focus on the 20% of value-driving activities.
- Identify the 20% of clients generating 80% of revenue and fire the rest.
- Lean into the 20% of marketing channels that drive 80% of leads.
- Systematize the 20% of issues causing 80% of process bottleneck.
- Review the 20% of metrics that explain 80% of business health.
Framework 4: Force Field Analysis
Force Field Analysis is a strategic tool for understanding the factors that support or hinder a decision. This approach involves identifying the forces for (in favor of) and the forces against (that hinder) a particular decision.
- Identify supporting forces by listing the elements that work in favor of the decision. This can include financial benefits, team support, or alignment with long-term vision and goals.
- Identify restraining forces by listing elements that push against the decision such as cost, time, energy, or potential risks.
Once you have the two lists, you can consider the decision holistically. The goal is to test whether the forces for outweigh the forces against. This leads to making a balanced, informed decision.
Tip
Visualize the forces as you list them. Try to see and feel the forces actually pushing for and against the decision.
Framework 5: 10-10-10 Rule
The 10-10-10 Rule is a time- and impact-based approach for making decisions. It encourages you to consider the impact of your decision on multiple timeframes—10 minutes, 10 months, and 10 years.
- Short-Term Impact (10 mInutes): Immediate reactions and feelings.
- Medium-Term Impact (10 months): Effect and relevance of the decision in 10 months.
- Long-Term Impact (10 years): Consequences and importance in the grand scheme.
With these five frameworks, you'll be prepared to face tough decisions with clarity and confidence—making every choice a step forward in your business.
