The Decision Matrix: Prioritizing decisions by their impact
How to use consequentiality and reversibility to improve decision-making.
Do you struggle to figure out which decisions are the most important?
Do you spend too much time on decisions that don’t really matter?
Are you unsure how to decide which decisions to focus on for the best results?
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We typically have to make many decisions every day, both in our personal lives and at work. Some decisions matter more than others. Some are small and can be easily changed, while others have major consequences that are hard or even impossible to undo. It's important to understand the impact of a decision before you make it. We should focus our attention and effort on the decisions that have the biggest impact.
One useful way to assess the potential impact of decisions is by using a Decision Matrix that looks at two key factors: consequentiality and reversibility. This straightforward but powerful tool helps us give the right amount of attention and scrutiny to each decision. It’s a variation of the Eisenhower Matrix, which helps prioritize tasks based on their level of importance and urgency.
Consequentiality and reversibility are the two key factors in the Decision Matrix, each helping to understand the impact of a decision.
👉 Consequentiality: This means how important a decision is based on its potential impact on your life, work, or other areas of interest. High-consequentiality decisions have big, long-term effects, while low-consequentiality decisions are less important and usually only affect the short term.
👉 Reversibility: This looks at how easy it is to undo or change a decision after it's made. Highly reversible decisions can be adjusted with little cost or effort, while irreversible decisions are hard or impossible to change once they're done.
Combining these two factors creates four categories in the Decision Matrix. Depending on which category a decision falls into, you can use specific strategies to handle it:
👉 Consequential and Reversible: Decisions that need careful analysis.
👉 Consequential and Irreversible: Decisions that require intense scrutiny, careful planning, and sometimes even external advice. These are the decisions that can alter the course of your life, and as such, they should be approached with a mindset of caution and due diligence.
👉 Inconsequential and Reversible: Decisions that require minimal effort and allow for flexible choices if necessary.
👉 Inconsequential and Irreversible: Decisions that require careful consideration.
The Decision Matrix
How to determine the consequentiality of decisions
It’s important to understand what makes a decision consequential. To help you determine the consequentiality (or importance) of a decision, you can ask yourself these questions:
🤔 What could happen in the long run because of this decision? Think about how it might affect things over time. Decisions with big long-term effects are more consequential.
🤔 How does this decision fit with my goals, personal values, or life purpose? Consider how it connects to your bigger plans. If a decision has a big impact on what really matters to you, it’s probably more consequential.
🤔 Who will be affected by this decision, and in what way? Think about whether it impacts just you or also affects others. This can help you understand how consequential the decision is.
🤔 What are the risks and potential rewards? Look at both the risks and benefits to get a clearer sense of how significant the decision is. Decisions with high risks or big rewards tend to be more consequential.
These questions are important because they help you evaluate how much a decision truly matters. By thinking about long-term effects, how it fits with your goals, who it impacts, and the risks and rewards, you can better understand how consequential a decision really is.
How to determine the reversibility of decisions
It’s important to know what makes a decision reversible. To help you understand how easy or hard it is to change a decision, ask yourself these questions:
🤔 How hard or expensive will it be to change or undo this decision if needed? Think about the challenges of reversing the decision. If it’s costly or complicated to reverse, then it’s less reversible.
🤔 What could happen if I reverse this decision? Consider the impact of changing your mind, including any new costs or problems that might come up. Knowing these consequences helps you understand how reversible the decision is.
🤔 How lasting is the decision’s impact on people, systems, or processes? Think about whether the decision will have long-lasting effects. If it has permanent or difficult-to-change effects, it’s less reversible.
These questions are crucial because they help you see how easy or difficult it will be to change your mind after making a decision. By thinking about the costs, possible outcomes, and lasting effects, you can better understand how reversible a decision really is.
Examples
Here are common examples for each category:
👉 Consequential and Reversible:
- Choosing a new job: You can leave and find another job later, but it can impact your career.
- Moving to a new city: You can always move back, but it’s a big choice that affects your life.
👉 Consequential and Irreversible:
- Having a child: A life-changing decision that can't be undone.
- Buying a house: A major financial commitment that’s difficult to reverse.
👉 Inconsequential and Reversible:
- Trying a new hobby: If you don’t like it, you can stop anytime.
- Switching to a different brand of a product: You can easily switch back if it doesn’t work for you.
👉 Inconsequential and Irreversible:
- Buying a low-cost item: If you buy something inexpensive that you don’t end up liking, you can’t return it, but the loss isn’t significant.
- Ordering a meal at a restaurant: Once you’ve ordered and the meal is prepared, you can’t change your choice, but it’s not a big deal since it’s just one meal.
Additional tips
👉 Seek advice: For high-importance decisions, especially those that are less reversible, consult with trusted advisors or mentors.
👉 Take your time: Don't rush decisions that fall into the high-importance, low-reversibility quadrant. Reflect on all possible outcomes and scenarios.
👉 Stay flexible: Even after making a decision, remain adaptable. Circumstances change, and what was once a high-reversibility decision could become less so over time.
👉 Document your reasoning: For significant decisions, write down your thought process. This can help clarify your reasoning and provide a reference if you need to revisit the decision later.
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The decision matrix of consequentiality versus reversibility offers a structured approach to making thoughtful, impactful choices. By categorizing decisions based on these two dimensions, you can allocate your time and energy appropriately, ensuring that consequential, irreversible decisions are given the attention they deserve.
References
The Decision Matrix: How to Prioritize What Matters, Farnam Street
Reversible and Irreversible Decisions, Farnam Street
