There are lots of methods and techniques for making decisions. One of the most commonly used is the pros versus cons list or risks versus rewards. This type of list helps make a clear distinction about what benefits a choice offers, and also what you have to lose.
To make it easy, I put together a basic spreadsheet that I use to quickly show how the rewards measure up to the risks, and vice versa.
When you have a decision to make, begin by listing all the rewards the choice offers, then choose a weight for the reward. I like the weighted approach because though you may end up with the same number of rewards as risks, the overall weight is what will determine the choice. Once you have listed the rewards, do the same for the risks.
As an example, let say you’re trying to decide whether to go skiing this weekend. You’d begin by listing the rewards – such as fun, seeing friends, etc. – along with a weight on a scale from 0-5 on the importance of each reward. Next you’d list the risks – you can’t ski, breaking something, death, etc. – and the weight of each risk. The worksheet uses a simple calculation to determine the outcome, and displays a message along with a simple bar graph of the results.
What you end up with is a clear picture, based on your own thoughts about specific factors, of which direction to take.
Download Risks versus Rewards Worksheet (MS Excel – Tested in versions 2000 and 2003)
Tony D. Clark writes, draws cartoons, designs software and websites, and spends a lot of time talking others into working from home, being creative, and doing what they love. His blog Success from the Nest focuses on helping parents who want to do meaningful work from home and have more time for their families. His weekly podcast The Creative Venture is designed to bridge the gap between creativity and practical business knowledge, helping creative people turn their talents into a thriving business.
Is the reward worth it? Or is the risk too much? Make a decision!…
Can’t make up your mind? Need to see some solid, quantitative evidence before you can decide which pair of pants to wear? If so, Lifehack’s Tony Clark has put together a helpful Excel spreadsheet (d……
It appears to work on Excel for Mac….
[...] Everyday entrepreneurs seek to find a balance between the risks and the rewards. Personally, I have found that it is so easy to fall into the trap of believing my own sheepdip and so anything I can find to help remove my personal bias is a welcome addition. So when I saw that Tony from Success from the Nest had a post over at Lifehack titled Risk versus Rewards I was intrigued. [...]
Very cool Tony; love simple Excel worksheets like this!
Marc – Thanks for checking it out on a Mac.
Rosa – I’m glad you found it helpful. Sometimes the simplest decisions are the most difficult. I made this to help that process along.
NP
[...] Risks versus Rewards Worksheet [...]
The obvious problem is that you cannot accurately assess every risk using numerical estimation.
A risk carries two factors: its probability of occuring and the weight of significance that it will happen.
When you numerical estimate how “risky” something is you have to make an ambiguous hybrid of the two factors, which leads you to not have a very useful tool in making complex decisions.
So to follow the skiing example, one risk is death. There is a low probability of death (some unknown but assumed to be low number), but it is extremely important to not die. How do I attach a number?
[...] But what about the Windows users out there? (I believe there are a few.) Well, a few months ago, Lifehack came out with a Risks vs. Rewards Excel worksheet. All it does is tally up the weight of your pros and cons, but it beats writing all that down on paper (I don’t know about you, but my writing ability has been pretty terrible since basically replacing notebooks with my PowerBook). [...]
shup BEN!
Shup BEN! dis a gd idea!!!!!!!!!!!!