Relying only
on gut feelings or opinions when making decisions is no longer wise. With all
kinds of tools to mine the massive data available, anyone can make better
decisions. Informed decision-making has always been challenging but has become much more manageable today.
There are
five steps to data-driven decision-making: 1) gathering relevant data, 2) organizing,
cleaning, and formatting the collected data, 3) using statistical methods to
analyze the data, 4) presenting the analysis in a clear and understandable
format, and 5) using the insights gained to make informed decisions and take
appropriate action.
What Tools
I Use
Excel has been helping me make decisions, even at home. My children fondly call me
Ms. Matrix. Here is an example of how my family uses it to decide where to go
for a family reunion.
Each family
nominates a destination and presents a description. With a simple matrix, we
compare variables like sights to see, food options available, activities for
children, weather, and travel costs.
Each variable
is given an importance ranking (the rankings should total 100%), higher
for the more important ones and lower for others. Then, each family rates each destination’s variable on a scale of 0 to 100. The average of the families’ ratings is the final
rating.
|
|
Importance |
New York City |
San Diego |
Orlando |
|
Sights for Adults |
20 |
90 |
70 |
70 |
|
Food Options |
30 |
95 |
85 |
80 |
|
Activities for Kids |
30 |
70 |
90 |
95 |
|
Weather |
10 |
70 |
90 |
65 |
|
Travel Costs |
10 |
70 |
75 |
65 |
|
TOTAL |
100 |
Each variable’s
score is computed by multiplying its importance by its final rating.
The variable scores for each destination are summed up. The highest total score
wins!
|
New York City |
San Diego |
Orlando |
||
|
Sights for Adults |
90×0.2=18 |
70×0.2=14 |
70×0.2=14 |
|
|
Food Options |
95×0.3=28.5 |
85×0.3=25.5 |
80×0.3=24 |
|
|
Activities for Kids |
70×0.3=21 |
90×0.3=27 |
95×0.3=28.5 |
|
|
Weather |
70×0.1=7 |
90×0,1=9 |
65×0.1=6.5 |
|
|
Flights |
70×0.1=7 |
75×0.1=7.5 |
65×0.1=6.5 |
|
|
TOTAL |
81.5 |
83 |
79.5 |
|
|
RANK |
2 |
1 |
3 |
They used to
wait for me to lead the discussion. Today, any of my daughters can build matrices.
They caught the bug and retired me.
I use two other tools for discussion and visualization. Mind mapping is great for brainstorming and exploring different possibilities. I branch out as far
from the center as possible.
Decision
Trees are diagrams that display different consequences at each fork or decision
point. It helps present various scenarios for comparison and visualize all the possible outcomes.
More Tools
and AI
Aside from simple
spreadsheets, you can also use statistical software like SPSS for statistical analysis, platforms to help manage and analyze large datasets, and data mining tools to discover hidden patterns in the data.
Artificial intelligence (AI) is increasingly becoming crucial since it can be used
for all these steps. It can:
1. Automatically
collect data from various sources and clean it to remove inconsistencies and
errors,
2. Use advanced statistical techniques and machine learning algorithms to identify patterns, trends, and correlations within large datasets that would be difficult or impossible for humans to spot.
3. Predict
future outcomes based on historical data, helping businesses make informed
decisions about marketing campaigns, product development, and more.
4. Analyze
text data, such as customer reviews or social media posts, to gain insights
into customer sentiment and preferences.
Using intelligent generative prompting, you can iterate until you are satisfied that all aspects have been covered. This allows you to invoke AI in the entire decision-making
process!
In the past month,
for example, it has helped me decide to shift my writing to another platform (more on this in a future post). I used 36 iterations,
driving down details of why, how, where, what, and when to do it.
However, human
judgment and expertise are still essential to use in conjunction with it. Review
what AI did and verify that the data is correct, there are no gaps, and decisions
are ethical. And, if you like, follow AI’s example and take a second opinion:
your own.