When faced with strategic business decisions, executives often quickly home in on a narrow set of options. Systematically expanding the “decision frame” can result in better solutions that reflect diverse stakeholder interests.
Business leaders are paid to make decisions and to ensure that those decisions are implemented in an appropriate and timely manner. To do so, executives must clarify and determine their objectives, explore possible options, and evaluate which options are aligned with their goals. In our work with senior executives, we find that most of them are very good at decision making if the objectives are clear, and if the choice is between a set of specific, predefined options. However, when presented with complex decisions, executives tend to home in quickly on a couple of options, list what they see as the pros and cons, and spend the bulk of their time calculating — or deliberating about — how the competing courses of action stack up. (See “About the Research.”)
Executives rarely take the time to frame decisions thoroughly. Rather than exploring the full scope of options, they stick to the obvious ones and use a limited set of criteria. Unfortunately, once decisions are framed this way, the outcome is frequently suboptimal.
Many of the concepts and frameworks designed to help executives generate better choices are too complex or too specific to apply in day-to-day decision making. As a result, managers typically resort to a mix of intuition and analysis, often using a classic decision matrix — with options on one axis and criteria on the other — to test the relative merits of a few solutions.1 This type of decision matrix is a powerful tool; it allows for the comparison of different options using the same set of predefined criteria.
However, we have found that executives don’t exploit the decision matrix to its full extent. They use it primarily to provide quantitative support for one course of action over another, focusing their time and energy on evaluating a given set of options in the decision grid of the matrix. In our experience, though, the real value of the matrix isn’t just as an evaluation tool but also as a process tool that helps executives extend their decision frame beyond the obvious options and criteria and to think “out of the box.” (See “The Decision Frame and Out-of-the-Box Thinking.”)