7 Steps to Use Grid Analysis for Tough Business Decisions

Consumers can make decisions in one-third of a second. Granted, decision making takes a little bit longer when we are at a “fork in the road” moment of our lives. It is hard enough in our personal lives, but when it comes to business decisions, that fork usually has at least six prongs. When you are faced with anything but a choice between two options, that standard checklist falls short. Grid analysis is an effective way to quickly decide between several options when many factors need to be considered. In making your next big decision, consider using grid analysis to help you bear the load.

Using Grid Analysis for Business Decisions

Grid analysis can help you quickly answer complex questions like:

• Who should I partner with?
• Which distributor is best for my business?
• How can I rate and choose a supplier?

To set up grid analysis for your question, follow these simple steps:

7 Steps to Successful Grid Analysis

1. Make a list of the different options you have and important deciding factors that need to be considered. Factors may include cost, size, distance, customer service, reliability, availability, or anything else you determine to be valuable in your decision-making process.

2. Create a table for your question, either in Excel, or using a pencil and paper. Use the first two rows in the upper left hand corner for “factors” and “weights” and the top right column should be labeled “total” to keep everything organized. Here is an example:

3. Now list your options in the rows, and your deciding factors in the columns.  This example will use the question “Which supplier is right for my business?”

4. Now let’s work out the relative value or “weight” each of your factors has. How important is each factor to your decision? This can be done on any scale you prefer. The example uses a 1-10 scale; 1 being least important, 10 being most important.

5. Once you have written these values, place a number in each box for how your options rank under each factor. Now you have a table like this:

6. To reach your totals, first work through your table and multiply each option’s factor by its relative weight.  This will give you weighted scores for each option, highlighted here in blue.

7. Now simply add these weighted scores across their rows and place the sum in the “total” column. The one with the highest score is your winner! Your final table should look something like this:

Grid analysis not only takes into consideration multiple factors, it also takes into account how much you value those factors, making it a very useful tool for complex decision making. In the example, Supplier B was the winner. Even though they ranked poorly in two of the fields, they scored high where it mattered most.