What Is Decision Making in Project Management?

We’ve all heard about the secret recipe for decision making in project management:

• Focusing on goals that should be achieved during and at the end of a project
• Making data-driven decisions based on the available information
• Keeping all organizational and resource crunch constraints into account when planning implementation
• Managing unforeseen risks and coming up with better solutions, so they do not repeat in similar projects in future
• Setting up a realistic project implementation process that is easily understood and adhered to by teams across different departments

The point to be noted here is that any decision-maker needs to be clear with the basics of decision-making to actually keep team members engaged and reach desired (realistic) goals. 

Understanding the Concept of Project Management Decision Making

A comprehensive understanding of decision making in project management is essential for all managers and other stakeholders involved. Only then can you see a project moving towards the final delivery phase while adhering to the existing deadlines. Otherwise, there is a high risk of the project, making very little progress or stagnating completely.

That’s why it is important to keep the different steps involved during the decision-making process.

What Are the Essential Steps in the Decision-Making Process?

Step 1: Always identify the decision you have to make during an ongoing project. Don’t let external factors affect it.

Step 2: Keep relevant information and data handy to make calculative decisions.

Step 3: Never think of getting stuck. There is always one or multiple alternatives that will help you keep the project going even during uncalculated risks.

Step 4: Keep track of changes in the data and decide how your decisions might impact the progress of the project.

Step 5: Know your options and see what will work the best among existing alternatives.

Step 6: It’s action time. Once you know what data represents, it is time to set your words in stone.

Step 7: Finally, it is time to see the impacts of your decision and what consequences it can bring for your project.

In a nutshell, the very core of any decision making imbibes toughness that encapsulates a logical choice being made from an array of available alternatives.

A project management challenge for a competent project manager will involve addressing diverse approaches, constraints, and passing through multiple solutions to ultimately coming up with one that’s the best. Weighing pros and cons, risks and consequences prior to selecting a course of action ensures the success of the project.

In a word, that’s decision-making.

Types of Decision Making in Project Management

Decision making in project management is reliant on the availability of information from multiple resources. But there is the possibility of the process becoming slow and increasingly frustrating if this information onslaught is combined with making conventional types of business decisions.

Let’s take a look at the different types of decision-making within project management.

#1: Programmed and Non-Programmed Decisions

When you witness problems that may take place in a routine or may be repetitive in nature, it generally warrants a process of programmed decision making. Managers with lower designations are able to tackle these decisions that generally relate to issues such as: 

• granting leave, 
• buying raw material, 
• the supply of goods, etc. 

On the other hand, non-programmed decisions usually deal with more trying circumstances where the solution does not come as easily.

Take a look at these decision making in project management examples to get a greater understanding of this. Organizations opening branch offices, absenteeism in large numbers, or even launching new products or services are instances where the non-programmed decision comes into play. These situations are dealt with by the project manager and the team in unison to cater to evolving needs in real-time.

#2: Routine and Strategic Decisions

Project managers are also responsible for making decisions that impact day-to-day routine. There is not much evaluation or analysis involved in such decisions. The only difference between routine and programmed decisions lies in the fact that the latter happens for unscheduled problems.

However, if the matter at hand impacts organizational objectives, goals or even policy matters, the project manager will be expected to make strategic decisions. This may comprise significant monetary investments on portfolios or change in the program’s orientation that is non-repetitive in nature. Project leaders, generally C-suite managers, will have to undertake a thorough assessment and analysis of the probable options.

#3: Tactical (Policy) and Operational Decisions

Policy or tactical decisions are generally taken on policy matters. However, a group of portfolio managers is involved in the decision-making process as they are in the best position to assess the decision’s long-term implications on the overall functioning of the project.

Examples of policy decisions include taking a call on the number of active projects within a specified time-frame, matters relating to project budgeting, and more.

Operating decisions are undertaken by lower or mid-level managers that relate to the business’s daily operations or functions. For instance, bonus payments to employees or the calculation of employee bonuses are accepted under daily operational decisions. However, if there is a need to bring about a change in the policy of employee bonuses, then it falls under the purview of tactical or strategic decisions.

#4: Organizational and Personal Decisions

Organizational decisions, when taken by a project leader, are relevant to the responsibilities and tasks within the project. However, if the decision taken is of a personal nature in relation to the manager’s personal needs, it is known as a personal decision.

The personal decision also matters in the overall scheme of the functioning of the project. For example, if the personal decision taken by the manager has an organizational impact, then it can very well have an implication on any active projects being managed directly by him or her.  

trends show that the company’s management takes major project-related decisions. Minor decisions, for example, purchasing stationery for the office, etc., can be taken by even a junior supervisor.

Your Approach to Decision Making in Project Management

Those in positions of power and authority need to make decisions on a daily basis. Not every decision is critical, but the ones that are, end up determining the success or failure of the project.

In view of this, it is fair to presume that there is more than one approach to the project management decision-making process.

A mainstream decision-making approach leads the project leader to follow a set of rationale driven guidelines typically. Generally, it tends to include these steps:

1. Identify the Issue First: Once you come to terms with the fact that a problem exists, then the next steps should basically define your goals, collect the necessary data and information that will help in a rational decision-making process.
2. Consider All Solution Scenarios: Get your team together to brainstorm on all solution scenarios. It is best not to filter any possibilities that may be remotely reasonable at this stage.
3. The Criteria Generate Should Be Objective: Ensure that the possible solutions are feasible and reasonable according to the measurement criteria of success or failure of the decision.
4. Choose and Implement the Best Solution: Making use of every filtration process, you should be able to decide on the best solution for the impending problem. Quickly put that into action.
5. Keep Monitoring the Results: You will only find out if the decision you made failed or succeeded if you keep monitoring and tracking the outcome of the solution. This can either be short-term or long-term, depending on the severity of the problem.

This approach can work well in most scenarios. That said, new age project management decision-making criteria largely depends on speed and accuracy. This translates into gathering inputs and data and quickly coming up with solutions. This methodology is popularly referred to as agile decision making.

Agile decision making comes with its own set of rules.

It means that the project managers, along with their teams, will have to work in collaboration, iteratively, and with transparency.

No doubt, the approach is poles apart from how decisions were made traditionally by project leaders. That said, agile project management teams that include every single member are empowered to make decisions if the situation demands it.

Read More: 14 Best Resource Management Software & Tools Of 2022

Project Decision Making Models

Businesses often have to live with the legacies of any decision that they take impacting the projects and by extension the organization in the long-term. Hence, if the decision has been taken bypassing best practices, procedures, and acceptable models, the after-effects can come back to haunt the business.

Taking this thought forward, here are the most frequently applied decision-making models in Project Management.

#1: SWOT Analysis

Intend to do a feasibility study of the project? Consider undertaking a SWOT Analysis, which is a commonly used decision-making model in these cases. Taking into account four key parameters – Strength, Weakness, Opportunity, and Threat – you can gauge the viability of the project and bring unsorted issues to the point of conclusion.

#2: Maslow’s Pyramid

Maslow’s Pyramid theory was deduced by Abraham Maslow in 1943. This model of project management decision making focuses primarily on basic human needs and maps the impact on human behavior.

The theory establishes that hierarchical need is a vital element of project management. According to Maslow, there are five levels of human needs that include physiological needs, security requirements, social relationships, recognition, and self- actualization. The pyramid highlights the resource, in this case, the project manager can journey through these individual levels to reach the ultimate point of self-actualization.

Through a process of working with resources, the project manager can identify problems related to them.

#3: Pareto Principle

Popularly known as the 80-20 rule, the Pareto Principle helps in the prioritization of problems, which is then followed by looking for relevant solutions. To get a better understanding of the theory, you can describe the 80-20 rule with this example

Let’s assume that 20% of the workforce within an organization is responsible for creating 80% of the problems. For example, a Call Center has 5 key problems caused as a result of a lack of promptness. Following that are 3 more issues which are an outcome of poor linguistics. Lastly, 2 more problems crop up as a result of the bad organizational skills of the employees.

What you can understand from all of these problems is that the organization has failed to impart adequate training and has not invested in skill development in their workforce. By implementing relevant learning and training modules for their employees, the business will be able to address the issues relating to lack of promptness, bad linguistics, and organization skills.

#4: Monte Carlo Simulation

The Monte Carlo simulation method in project management is typically applied for quantitative risk analysis. This decision-making model is able to identify the probable risks of the project objectives by analyzing its quantitative impact.

But there is a catch. Monte Carlo simulation is essentially a model that concentrates on many simulations rather than randomly sampling and then declaring results, which may just approximate. That said, it is this very aspect of random sampling, using statistics and probability in result determination is what makes this decision-making model so interesting to project managers.

What it ultimately emphasizes is that decision-making models in project management can be random. It is not always mandatory to have elements of reality attached to it.

#5: Decision Tree Analysis

When in need of procurement analysis in project management, look no further than the Decision Tree Analysis model. This helps in answering any questions that you may have about buying or building.

What you do here is to assign a percentage to both possibilities of buying or building with positive and negative connotations. Next, you calculate the invested amount against what you have received. Deriving the profitability percentage from this, you can decide whether you build or buy for a particular project.

The Need for Project Decision Making Models

These are some of the core decision making models in project management that are used by professionals and project managers worldwide.

Not sure why there is a need for such models? Because you want your decisions to be backed with evidence-based analysis and evaluation. Undoubtedly, any good project manager will realize their value and how effective these models can be in the project management lifecycle.

Read More: Agile Software Development Life Cycle (Ultimate Guide 2022)

How to Improve Project Decision Making?

You can learn to be a great decision-maker. If you can delve deeper into the problem and look at all possible solution scenarios, in the majority of situations, your decision would be right on the dot.

Lately, the concept of ethical decision making in project management has also been a focal point when it comes to improving project decision making. The important thing is to keep collaborating to expand the possibilities and find a way forward amidst the confusion.

The following ways can help in the process:

1. Brainstorm Frequently to Generate Ideas Using Affinity Diagrams

Silent brainstorming is considered to be a tool to improve project management as it helps in generating brand new ideas and concepts. Bypassing the ‘”Been there, done that’ thought can be quite exhilarating and exciting driving project managers to look beyond the obvious hurdles to explore otherwise unknown frontiers.

2. Identify Challenging Problems With Root Cause Diagrams

It is important to unearth the root cause of any problem that may hinder the progress of your projects. A Project Planning Tool can be really handy as it can help the project manager delve deeper to find out what is causing the problem.

3. Compare Ideas and Option Using Prioritization Matrix

Using a project management tool can help in evaluating the merits of individual ideas and concepts, especially in a scenario when there are multiple complex elements. A scoring system that comes with these super tools can easily help project managers pick clear winners, thus, improving the decision making in project management.

Decision Making in Project Management Made Simpler!

The success of every business organization depends on the strength of its leadership. The mark of a truly accomplished project leader is to inspire, motivate, and build a strong team that helps carry his decisions in reference to the project from inception to completion.  

Decision making in project management is essentially a reality check. For project leaders, it also translates into a measurement of professional and personal success.

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Now that we’ve covered how your decision-making process can be made simpler, it is time that we look into some of the frequently asked questions below.

Q1: How Can I Make My Project Better?

There are several ways by which you can make your project better. Take a look:

• Consider ways to expand perceptibility and cognizance
• Establish a day-to-day routine for your team
• Stay far from unnecessarily complicating your projects
• Put in place appropriate expectations and stick to them
• Share changes to your team

Q2: What Are The 3 Types of Decision Making?

The 3 types of decision making are:

• Extensive decision-making process
• Limited decision-making process
• Routine decision-making process

Alternatively, you also list them as:

• Consumer decision making
• Business decision making
• Personal decision making

Q3: What Is an Example of Decision Making?

Decision making is required in every aspect of running a business. For example, identifying problems in the production process, finding loopholes before launching a product, understanding the effect of increasing store opening hours are all good examples of instances where decision making is required.