Grid analysis (also known as Decision Matrix, Pugh Decision Matrix, Weighted Scorecard and others) is a framework for evaluating ideas and making decisions which uses a set of weighted criteria to rank the ideas. Each idea is evaluated against each criteria and assigned a score based on how well the idea satisfied that specific criteria. Each criteria, in turn, is weighted according to its importance to the decision-maker. The end result is a ranked list of ideas. The detailed process is described below.
What are the Benefits of Using Grid Analysis to Evaluate Ideas?
The main benefit of using Grid Analysis for decision making and idea evaluation is to make the process more objective. By using a concrete set of criteria with distinct weights, the decision-maker can inject a certain amount of rationality in the process and, subsequently, more easily justify their decision to others if needed.
Where is Grid Analysis Used?
Grid Analysis can, in theory, be used for any decision which requires selection between a number of concrete alternatives. Practically, it is widely used in areas of design engineering, capital allocation, procurement, product management, and others. These are some of the questions that can be answered with Grid Analysis approach:
- Design Engineering: Which one of the potential product designs best balances the needs of the users with the costs associated with each design?
- Capital Allocation Decisions: Based on the priorities of the company, which projects should receive funding?
- Procurement: Which suppliers best satisfy the list of our demands and regulations we have to abide by?
- Product Management: Based on the feedback from our users and the priorities of the company, which product features should be prioritized for development?
- Strategy: Given the current market conditions and our organizational capabilities, which strategy should we pursue? (Read our case study on using grid analysis for making strategic decisions)
- Innovation: Objectively evaluate product ideas. (See our article on frameworks for idea evaluation).
How to Use Grid Analysis? Step-by-step Guide
- Define the alternatives you are going to be evaluating. These can be the ideas you are considering, or life decisions that are being pondered (more concrete example is below).
- Define the criteria. The criteria answers the question of “What is important to you or your user, when choosing between the alternatives?”. The criteria can be anything from product specifications which are valued by the user to your personal preferences when choosing between which houses to buy.
- Assign weights to the criteria. This step answers the question of “How important is each criteria to the decision?”. Here you pick a scale (1-10 for example) and assign it to each one of the criteria based on how important it is. This is an optional step – if every criterion is of equal importance to the decision, this step is not necessary.
- Rank each idea on each criterion. This is where the “grid” or “matrix” concept comes in. Arrange your criteria and ideas in a grid, witch criteria listed in the top row of the table and the ideas listed in the first column of the table. Then score each of the concepts on each of the criteria. Visually it looks like this:
- Multiply the idea scores by criteria weights. Now simply take the scores from the previous step and multiply them by the weight of each criteria.
- Sum up the idea scores. Simply sum up the rows to understand which idea has the highest score – that is your winner.
Example: Using Grid Analysis to Identify the Best Product Design
You are an industrial engineer asked to design an environmentally-friendly container for a new soda drink. You have come up with a number of designs and are trying to figure out which one should the company go with. Gird Analysis is one of the best tools to make that decision.
Identify your alternatives
In this case the alternatives you are considering are you bottle designs. Let’s say that these are the designs you have identified:
- Plastic Bottle
- Glass Bottle
- Aluminum bottle
Identify the Criteria
Next step is to answer “What matters?” From the above we know that the bottle needs to be environmentally-friendly, so that’s certainly one of the criteria. The other couple of criterias could relate to customer appeal and cost to manufacture. So your criteria then is such:
- Customer Appeal
- Cost-effectiveness (be careful with cost/price related criteria – they are counter-intuitive with how you will score them. Designs with high cost, should score low on the criteria. That is not a natural instinct for most people)
Weight the Criteria
Now we answer “How much do our criteria matter?” Higher scores here indicate higher importance.
- Environmental-friendliness: SCORE 10 (this is the one requirement mentioned in the description)
- Customer Appeal: SCORE 7 (you are going to sell this to customers, so this is likely a pretty important criterion, though perhaps not as important as environmental-friendliness)
- Cost-effectiveness: SCORE 4 (while price is important, it was never mentioned, so we can leave it at 4)
Score the Designs on your Criteria
Let’s now build our grid and understand how our designs rank on the criteria. These scores might be a subject to a debate. This is why Rationalize provides a tool for COLLABORATIVE concept evaluation – which takes an average of multiple responders. For now, let’s go with the following scores:
Multiply Design Scores by Criteria Weights
Now we just multiply these out:
Add up the Design Rows
Looks like the Aluminium Bottle has narrowly beat out the Glass Bottle here. Notice that if we increased the weight of Customer Appeal, for example, the Glass Bottle would have been a winner.
Feel free to use Rationalize Dashboard for this evaluation to play around with those weights. You can also clone this evaluation and adjust the scores yourself.
Or start making your own evaluations today. Rationalize is a free and simple tool to evaluate all types of ideas and concepts.