Before you buy it, build it, outsource it, or shut it down — test the decision.
The problem
Many consequential decisions — buy or lease, outsource or build internally, hold or sell — are made on gut feeling, boardroom politics, or incomplete analysis. A clear model changes the conversation.
Examples
- Caravan versus motels — what does a lifetime of travel really cost each way?
- Outsource finance versus build an internal team
- Buy software now versus keep the current system
- Hold or sell a property
- Employ versus contract
- Standardise or customise
The A/B/C/D decision framework
Not every decision needs the same approach:
- A: Strategic — values-laden decisions that need judgment and conversation
- B: Modelable — judgment-heavy but quantifiable, needing models plus conversation
- C: Routine — repetitive enough that a spreadsheet should do the heavy lifting
- D: Trivial — don’t waste time
How it works
- Scoping call to frame the question
- Gather assumptions and existing data
- Build or adapt a one-page model
- Present findings and discuss what the numbers miss
- Deliver decision memo and working model