The weighted sum method: A powerful, practical, simple decision-making tool
Click Here to Manage Email Alerts
“The essence of strategy is choosing what not to do.”
– Michael Porter
“Humans do have a knack of choosing precisely those things that are worst for them.”
– J.K. Rowling
As an eye surgeon, you are a highly trained decision-maker. Although most of your training has been specific to patient care, a lot of what you learned in school can be more generally applied to nonmedical domains, including business decisions and career decisions:
- First do no harm.
- The simplest explanation is often the best.
- Weigh all of the facts before making a decision.
- Whenever possible, make decisions that are reversible.
- Consider the impacts on everyone involved, not just yourself.
But medical school still left your decision-making toolbox a little short.
There are lots of alternate decision-making tools. You can flip a coin: As it turns out, in business, one decision can work as well as another; it is more critical to act briskly than perfectly. You can even shake the Magic 8 Ball that most of us had as kids and wait for the answer to float into the window. Or — just like medicine — call in an expert.
This month, I would like to introduce you to a tool we use daily with clients. The formal name for it is the “weighted sum method” (WSM), but as you will see, it could more aptly be called the “weighted preferences method.”
As is often the case in business and life (and far less so in the numbers-driven world of medicine), much decision-making involves a lot of subjective judgement. “Should I study architecture or Spanish?” “Should we hire Dr. A or Dr. B?” “Should we open a second office in Smithville or Jonestown?” For somewhat subjectively colored, multiple-option questions such as these, anything you can do to introduce a degree of objectivity — numbers — is helpful.
Let’s examine a practical example of how WSM can be used, in this case, to help a young doctor decide which of two jobs she should take.
Dr. Amanda Smith won’t finish her glaucoma fellowship for another 12 months, but she is already fielding numerous job offers. With each new offer, Amanda’s decision is getting harder. Should she accept the HMO position close to her parents in Charlotte or the private practice with a juicy partnership opportunity in Wilmington? The large practice in Boston or the boutique practice in Raleigh? The private equity practice in Chicago or the health system in Omaha?
You get the point — there are a lot of variables that go into this critical professional choice. Let’s help Amanda make the wisest, most objective and rational decision possible. Here are the steps.
1. Amanda makes a list of things that are important to her. Most of these are professional, but some are strictly personal:
- a high starting salary (she has loans to pay off);
- an opportunity to teach (just a weekly class would keep her sharp);
- a 50-50 glaucoma-cataract mix (she has heard that 100% glaucoma can be a burnout);
- a well-run private practice (she thinks independence delivers the best medicine);
- a partner track (her brother owns his own company; she wants to as well);
- a surgery center (for the clinical benefits and the financial ones);
- a vibrant urban environment (Amanda loves the symphony);
- a great place to raise a family (she and her boyfriend are talking about kids); and
- local horse stables (Amanda rides English).
(Note: There are only nine attributes in this example, but you could as easily have three or 30.)
2. Then, Amanda assigns a weighting to the importance of each of these attributes, such that all of the weighting numbers add up to 1.0, where the higher the weighting value, the more important that attribute is.
3. Next, Amanda chooses one of her job opportunities — let’s say the job in Charlotte — and scores that job on a 0-10 scale in each of the nine attributes, in which the higher the 0-10 score is, the better the Charlotte opportunity is at delivering that attribute. When she has nominated a 0-10 score for each, she adds a column and writes in the composite score (the weighting figure in the second column times each corresponding attribute score in column three). The result looks like this, and the total score for Charlotte is 5.73 out of a possible 10.0.
4. As a final step, imagine Amanda has now limited the field to just two potential positions, one in Charlotte and the other in Wilmington. She performs this weighted preference exercise on the two opportunities side by side and compares the composite scores.
As you can see from this, the Wilmington job opportunity scores somewhat higher, and that might be enough to lead Amanda to accept that position. But it does not always end there:
- After going through this exercise the first time, Amanda might realize that more or fewer attributes should be considered or that the weighting for some attributes in the second column should be adjusted.
- Amanda could turn to the losing Charlotte practice, with the less favorable salary than Wilmington, and negotiate a higher base or bonus, which might swing the decision back in Charlotte’s favor.
- Amanda could really have her heart set on Charlotte as a community and use this exercise as an incentive to find a different practice opportunity in this market that would score higher.
- Amanda might look at the Wilmington score and, even though it is the higher of the two, decide that a 6.9 out of 10.0 is just not high enough and continue her job search.
As this simple example shows, the weighted sum method can be a powerful, intellectually satisfying decision-making tool, especially for perfectionistic eye doctors. Well beyond Amanda’s “what job should I take?” question, this tool can be used in a number of other situations.
When deciding whether to hire Dr. Smith or Dr. Jones, use weighted attributes such as:
- subspecialty training;
- surgical skills;
- work ethic;
- leadership potential;
- proven financial productivity; and
- a philosophical fit with the practice’s other doctors.
When deciding whether to open a satellite in Market X or Market Y, use weighted attributes such as:
- proximity to the main office or a partner’s residence;
- existing population-to-provider statistics;
- age distribution of the existing eye surgeons in the market;
- market growth, income or population age trends;
- facility investment opportunities; and
- the ability to acquire an existing practice in the market.
- For more information:
- John B. Pinto is the author of several books on ophthalmic practice management, including John Pinto’s Little Green Book of Ophthalmology: Strategies, Tips, and Pearls to Help You Grow and Manage a Practice of Distinction, UP: Taking Ophthalmic Administrators and Their Management Teams to the Next Level of Skill, Performance, and Career Satisfaction (with Corinne Wohl), Simple: The Inner Game of Ophthalmic Practice Success, and Ophthalmic Leadership: A Practical Guide for Physicians, Administrators, and Teams. Available now for purchase at slackbooks.com. Receive 20% off with promo code PINTO20. He can be reached at 619-223-2233; email: pintoinc@aol.com; website: www.pintoinc.com.
Collapse
Read more about
Click Here to Manage Email Alerts