Effective decision-making is a key component of success in both personal and professional contexts. However, decision-making can be complex and challenging, especially when dealing with uncertainty, complexity, and multiple stakeholders. Now amplify the challenge of making decisions in a corporate context, creating the risk of involving too many stakeholders in making decisions they are not equipped to make. To navigate these challenges, it's important to have a clear understanding of the different types of decision-making models that are available, as well as the strengths and weaknesses of each model.

In this article, we'll explore some of the most common decision-making models, provide you with guidance on how to choose the right model for your specific situation and zoom in on Scenario based decision making as a tool.

1. Rational Decision Making: assumes that decision makers have perfect information and can evaluate all possible outcomes to choose the optimal solution. This model is often used in economics and assumes that individuals make decisions based on maximizing utility or value. Enterprises often use this method of deciding in project management office basing the decisions on objective data as much as possible.

2. Bounded Rationality: recognizes that decision makers have limited information and cognitive capacity and therefore make decisions based on simplified models or heuristics. While bounded rationality can help simplify complex decisions, it can also lead to biases and errors in judgment if decision makers rely too heavily on simplified models. One can observe this type of decision making amongst Agile teams, who are close to the information required to decide quick, timely, and together.

3. Intuition-Based Decision Making: relies on the decision maker's intuition or "gut feeling" to make decisions. This model is often used when the decision is subjective or when there is limited time or information available. Additionally, many organisations use this approach without realising, potentially mainly listening to those with the loudest voice. While intuition can be a powerful tool it is also subject to biases and errors in judgment if not weighed against available data and evidence. A decision model that sits somewhere between intuition-based decision making and bounded rationality is the Recognition-Primed Model (RPM) commonly used by experts in high-pressure and time-critical situations. RPM suggests that experts make decisions based on their past experiences and pattern recognition rather than following a formal decision-making process.

4. Rule-Based Decision: involves applying pre-established rules or criteria to make decisions. This model is often used for routine or operational decisions, where the criteria are well-defined and the outcomes are predictable. While organisations in highly regulated environments often require rule-based decisions to ensure adherence to legislation, these rules are often temporarily circumvented for the sake of speed.

5. Participatory Decision Making: involves involving stakeholders or a group of decision makers in the decision-making process. This model is often used to build consensus, increase buy-in, or generate creative solutions.

6. Group Decision: involves a group of individuals making a decision together. This model is often used to increase diversity of perspectives, generate more creative solutions, or increase buy-in. A method often used to decide on the right approach for a group decision is the Vroom-Yetton (-Jargo) Model.

7. Incremental Decision Making: involves making decisions in small steps or iterations, rather than making one big decision. This model is often used in complex or uncertain environments, where the outcomes of the decision are difficult to predict.

Choosing the Right Decision-Making Model depends on a careful assessment of the context, including the nature of the decision, the level of uncertainty, the available resources, and the stakeholders involved. Some questions to consider when choosing a decision-making model include:

Based on the answers to these questions, you can select a decision-making model that is best suited to your specific situation. For example, if the decision is routine and predictable, rule-based decision making may be the best option. On the other hand, if the decision is complex and uncertain, incremental decision making or scenario-based decision – assuming bounded rationality - may be more appropriate.

It's also important to note that different decision-making models can be combined or used in sequence to create a more comprehensive decision-making process. For example, a participatory decision-making process may be followed by a rational decision-making process to evaluate the options generated by the group.

In conclusion, effective decision making requires careful consideration of the decision-making context and the available decision-making models. By understanding the strengths and weaknesses of each model, you can choose the right model for your specific situation and increase the likelihood of making a successful decision.