Make Better Business Decisions With the Decision Tree Template

Make Better Business Decisions With the Decision Tree Template

Every day we make hundreds of small decisions. We choose what to wear, what to eat for lunch, and whether to go out with friends or stay in and watch a movie. At work, we decide what tasks to prioritize, when to email a client with updates, and how to handle unexpected issues that arise. We make small decisions based on personal preference, common sense, or according to a set routine.

Other times we find ourselves facing a big decision with significant impacts on our team or company. In this case, we need a systematic way to consider our options. This is where a decision tree diagram can help. Gather your relevant data and enter your decision on the Decision Tree template. Follow your possible choices to their next decision points. Continue until you have a list of all your high-level options. Apply hard data to predict the business outcomes of each option. Compare these outcomes, choose the most favorable one, then put your plan into action.

Moving from decision to action is easy thanks to the visual organization Whiteboards provides. And if your team uses Jira, you can even manage issues directly on the virtual whiteboard to save more time and effort. Create, import, and update any Jira issue without leaving the Whiteboards app. Deep Whiteboards-Jira integration means all updates sync automatically to keep your Jira work seamless.

Try Whiteboards out for free today and create unlimited boards to manage all your work meetings. Keep reading to discover different uses for the Decision Tree template, see some decision tree examples, and get the most from this planning and presentation tool.

What is a decision tree diagram?

A decision tree diagram is a specialized flowchart structured to resemble a tree. Unlike many flowcharts, the decision tree continues to branch outwards rather than looping back on itself. This creates a series of flowchart endpoints, each showing different business solutions. These solutions are then compared side-by-side to determine the best course of action. 

Decision Tree Template on Whiteboards
Decision Tree Template on Whiteboards

These are the parts of a decision tree diagram:

  • Root: The root of the decision tree is the starting point of the flowchart. This field contains the basic decision to be made, in the form of, “X or Y?” A simple decision tree is binary, though you can add a third or fourth option.
  • Branches: The branches are the connecting lines of the diagram. These form the tree’s structure, from its large decision branches down to the twigs that hold the leaves at the endpoints of the flowchart.
  • Nodes: In botany, the points where trees grow additional branches are called nodes. On a decision tree, the first nodes contain the two (or more) choices presented by the root. These produce branches to additional, narrower decision nodes, as necessary.
  • Leaves: The leaves are the endpoints of the decision tree flowchart. They show the final options you’ll choose from. 

A decision tree maps a series of major decisions to be made. From there, you predict the outcomes of each decision path using data-driven analysis of the risks and rewards involved. This way, you can make the best decision for the company’s bottom line.

When should I use decision tree templates?

You can use a decision tree maker for many business applications.

There are more uses for a decision tree diagram than you may notice at first glance. Here are three broad Decision Tree examples. They can help you think through when and why you might create a decision tree:

1. Make important decisions collaboratively with your team.

A decision tree offers a structured approach to any crucial decision your team or company faces. Gather relevant stakeholders around a virtual whiteboard and build your decision tree together. Use relevant data to assess the risks and rewards of each decision path. Then decide together which course of action best supports your project or product goals.

2. Present a completed decision tree to relevant stakeholders.

A decision tree can help you demonstrate the logic behind a particular course of action. Use the finished decision tree from a team meeting to explain your process to other stakeholders. Or, create a decision tree to bring to a team planning meeting. Have the team assess the decision tree to ensure your logic makes sense, then examine the predicted outcomes together to reach a decision.

3. Offer a helpful decision tree diagram to end users.

People interacting with your product also have decisions to make. These can include whether to purchase your product, which version to buy, or which product features to use in a given instance. Let’s say your company hosts blogs and offers templates for users to personalize their blog site. A decision tree diagram on your website might help users narrow down template options, starting with whether their blog is for personal or business use. A straightforward decision tree diagram assures users you’ve accounted for their options, then points them toward a good option for them.

How do I create a good decision tree?

Follow these simple tips for effective decision tree design.

Decision trees can help you plan collaboratively, show others why a decision was made, or clarify product options for your customers. However you use the Decision Tree template, follow these basic guidelines to create an effective decision tree:

  • Bring the right data to the process. People need the most relevant information to make the best decision. Suppliers, outsourcing options, and workforce capacity all play a role in defining your available business solutions. Market research, budget analysis, and project time estimations will likely contribute to your final decision. Likewise, if you’re creating a decision tree for end users, consider which information is most relevant to their decision path.
  • Clarify your decision hierarchy. What is the most basic decision being made, and what decisions are subsets of that? Let’s say you’re deciding whether to outsource a portion of your company’s software development. “Outsource” and “Keep In-House” are your first decision tree nodes. Don’t enter your three possible contractors and two in-house developers as five branches straight from the root. A clear, logical progression keeps the options easier for everyone to understand.
  • Maintain a bird’s-eye view. State your decision options broadly and briefly. Developing a new product is a complex undertaking (see the decision tree example below). But complexity isn’t the point of your decision tree. It contains only a short, clear summary of each decision point.
  • Stay focused on the facts. The decision tree’s purpose is to assess the likely consequences of your main options. Decision trees help you bypass personal biases that could keep you from making a pragmatic decision. Stick with hard data to assess the merits of each option from the standpoint of the bottom line.

What does a decision tree meeting look like in action? Read on to see a decision tree template example.

How do I use the Whiteboards Decision Tree template?

Our decision tree example can help you get your bearings.

The Whiteboards Decision Tree template is straightforward and easy to use. Add the template to your online whiteboard, choosing a blank or pre-filled diagram. You can customize the template by choosing one or more components at a time, then editing their size, color, shape, or text parameters.

Add your main decision (“X or Y?”) to the root of the decision tree, then add options X and Y to the first two nodes. If you have more than two initial options, copy-paste branches and nodes to expand the tree. Determine which options point toward a further set of decisions, and add these to the second set of nodes. Continue until you’ve drawn all your high-level decision paths and established a sufficiently refined set of options.

What might that look like? Here is one Decision Tree example:

Decision Tree Example
Decision Tree Example

In this Decision Tree template example, a company is considering whether to develop a new product or consolidate an existing one. Each option points the company toward two additional options. If they opt for a new build, they have to choose whether to pursue rapid or thorough development. If they consolidate, they must decide whether to strengthen the existing product or simply harvest the remaining value from it as it becomes obsolete.

The company has identified four broad courses of action they might take. They use market analysis and financial estimations to fill in the final fields on the right of the diagram. Their analysis shows that their most profitable options lie in developing the new product.

Applying decision trees to your use case

Your situation may produce more or fewer courses of action than the decision tree example above. Your assessment metrics may also be different depending on the decision being made. You may also have to analyze your options further. For instance, our example company predicts the same profits for thorough vs. rapid product development. Their next step might be to consider the opportunity cost of each of these options. Perhaps they need to estimate the workload each option places on the development team and how that will affect other projects. They may start a second decision tree to consider their development options further.

Continue your own decision tree analysis until you determine which course of action you’ll take. If your action plan involves managing Jira issues, handle those work items right in your Whiteboards meeting. Create or import all relevant Jira issues and edit them individually or in batches. Whiteboards’ native two-way Jira integration means all your work appears automatically in Jira, and updates in Jira also show up instantly on the whiteboard. 

To explain your decision tree and its background data to other stakeholders, create a presentation with the whiteboard’s Frames tool. Invite your guests to the whiteboard, turn on Presentation Mode, and you’re ready to go.

Want to learn more about how two-way Jira integration can benefit your team planning sessions? Watch our short demo to see Whiteboards-Jira sync in action on a sample whiteboard.

Ready to make a no-risk decision and try Whiteboards’ Pro Plan for free? Sign up now and start using the Decision Tree template and 100+ other customizable templates that also integrate with Jira. Brainstorm, troubleshoot, map user stories, run retros, and deliver presentations all on the endless canvas of your virtual whiteboard.