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Strategic Decision Making Framework: The Evidence Quality Ladder

1. (Lowest): No concrete data (e.g., gut feeling, intuition)

2. Secondary data (e.g., forums, broad surveys, other organizations' experiences, broader group consensus). At the highest level, this data consists of existing statistically significant tests, such as randomized control trials conducted with your target or similar groups.

3. Verbal interest from your target (e.g., interviews with target). For instance, this can include verbal expression of interest with your target or alignment between their unmet needs and your offering — without real meaningful action yet.

4. Small step or test with target segment (e.g., prototype testing, direct observation). The step with the highest weight is one that directly links to your outcome, but a variety of meaningful actions are possible. For instance, if your desired outcome is a sale, a sale, of course, has the most weight, but a target customer putting down a deposit or signing a letter of intent are also meaningful. In any case, all of these actions speak louder than words.

5. (Highest) Repeated action with target segment. For instance, high volume of sales with your target customer segment.

How to Use the Ladder in Your Strategic Decision Making Framework

1. Prioritize: Score the importance and risk of the decision if incorrect.

2. Hypothesize: Generate a guess using your intuition and prior knowledge

3. Test & reprioritize: Actively seek out information that contradicts your initial hypotheses, going up one or two rungs on the evidence quality ladder. Based on the test, reprioritize and consider a stronger test.

1) Strategic Decision Making Framework: Prioritize

1. List the key decisions or questions that are top of mind

2. Score
1. Importance: How critical is the project that this decision is tied to?
2. Risk: How extensive will the impact be if you get this wrong?

3. Prioritize:
1. If the decision or question scores high on risk and importance, move to the next step below.
2. If it is not a high impact or risky decision, make a quick, yet reasonable decision with lower quality evidence and/or delegate it to someone else.

2) Strategic Decision Making Framework: Hypothesize

1. Define success criteria: Clearly state your desired outcome. Example: Reduce respiratory illnesses in your client community.

2. Formulate a hypothesis: Create a specific statement about your proposed solution and its mechanism. Example: Air purifier #2, with UV-C and HEPA filter (mechanisms), will outperform purifier #1 in reducing respiratory illnesses in my client community.

3. Score evidence quality: Rate your hypothesis using the evidence quality ladder above. Example: If based on intuition about UV-C effectiveness, score 1-2.

4. Identify key assumptions: Break down your hypothesis into testable sub-questions. Example: How effective is UV-C in air purifiers at reducing respiratory illnesses in my specific community context?

3) Strategic Decision Making Framework: Testing & Reprioritization

1. Identify a test that would enable you to go up one or two steps on the ladder. If desired, mitigate the cost or impact of the test. Consider these levers:
• Scope: Limit the scope of your test, for instance, reduce the frequency of collection, the sample size, the geographic area, or the number of items tested at once
• Commitment: Find ways to change the extent of the commitment. As I alluded to above, if your outcome is a sale, there are gradations of this that are not as onerous you can start with. For instance, signing a letter of intent or memorandum of understanding or paid discovery session to develop a validated scope of work to develop the solution, rather than the solution itself.
• Accessibility: Choose test sites or segments strategically to balance similarity and cost. For instance, choose proxy groups or situations that resemble your target but are easier to access or less costly to engage.

2. Actively seek out and collect this type of evidence, testing the sub-questions or other risky assumptions you identified

3. Rescore your hypothesis based on the evidence quality in a backlog (see below for example). If the hypothesis fails, then go back to the drawing board. Or if it succeeds, assuming importance and risk are still high, you can prioritize it for a higher-quality test on the evidence quality ladder.

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Your Turn: Apply This Strategic Decision Making Framework