Mastering the Decision Matrix: The Secret to Success for Gates, Buffett, and World-Class CEOs

As a leader, making difficult decisions and navigating through seemingly good options can often be a daunting task. Early on, I struggled with indecisiveness and would find myself overwhelmed when faced with multiple choices.

I recall a summer spent at my grandparents’ home in Carmel when I was 10 years old. My grandfather, a retired US Army Colonel, grew impatient with my inability to make decisions about simple things like what to eat or which movie to watch. One day, he urged me to make a decision quickly and move forward, emphasizing that in the Army, he had to make decisions constantly, even with limited information. Delaying decisions, he explained, was counterproductive.

However, I soon became frustrated with making poor decisions despite learning from them. I realized that having a decision-making framework was essential to avoid making choices I would later regret.

Years later, I came across a book about (not famous) successful CEOs, and my main takeaway was that each CEO had a set of criteria, or a decision matrix, for making critical business decisions. They applied this matrix to every significant decision, regardless of how straightforward or challenging it seemed. If a decision met their criteria, they proceeded to the next phase; if not, they abandoned the idea.

I believe this is what successful individuals like Gates and Buffett mean when they say that prosperous people say no to almost everything. In reality, they’re saying yes only to the few opportunities that align with their decision matrices.

Here are a couple examples of decision matrices I have used…

For my business:

Step 1: It has to check these boxes.

1. (How) Does it serve our Higher Purpose?
2. Does it align with our Core Values?
3. (How) Does it move us toward our BHAG?

Step 2: If it meets all of Step 1 questions. 

1. (How) Does it serve our Target Customer?
2. (How) Can it make a profit?
3. (How) Can it be systematized or automated?

Only if it passes all these tests do we move forward to the next phase, like what will it take, do we have the required resources, where can we get them, etc.

When I was Learning Chair at EO San Francisco booking speakers:

1. (How) Does this topic facilitate member-to-member connection?
2. How does this provide tangible, take-home value that members can use in their businesses immediately?
3. Would this be a 9? How can this be a 9?

What framework or questions do you ask when making strategic decisions?