I routinely encountered optimization problems and I struggled to solve them effectively until I developed this simple framework.
In this post, we’ll work through the example “Where should I live?”
Click here to access the example spreadsheet.
Optimizing for real-world problems is usually challenging because they tend to multivariate. They also tend to impact more than one stakeholder, which often means there are different priorities that should be considered. Additionally, variables can often inversely correlated, qualitative in nature, and/or unique solutions have wildly different values.
Whenever things get complicated in my life, I try to develop a process that I can tune as I gain more experience. Here’s my current approach for optimizing complex decisions.
Steps to Resolution:
- Determine Variables
- Weight Variables
- Collect Data
- Visualize Data
- Discuss quantified result
Create a list of all meaningful values to consider when evaluating the problem. Then, ask other stakeholders about what factors they would consider when determining a solution
Example Variables for “Where should I live?”:
- Proximity to Work, Family, Friends, Food, Activities
- Pet/Child-Friendly (Booleans)
- Cost of Living Adjustments
- Additional Income Possibilities (Rental units, access to a better job market)
Have each stakeholder (including yourself) put a weight on each variable privately. Then gather together to discuss the reasons for each
Aggregate your data in your spreadsheet. Sometimes it helps to normalize data if the options are very disparate in their values. One way to normalize is through the use of ratios between two of the variables from the same option.
In this example, we create a ratio of Total Cost of Residence / Take Home Income in order to normalize the Total Cost of Residence for different geographic areas.
Implementing this visualization technique will usually highlight one or two prime candidates from your data.
While I’m building my visualizations, I also highlight the top three column headers, based on the outcomes of the variable weighting discussion. This additional step highlights the “deal breakers” that sometimes exist in candidates that otherwise look great on paper.
Discuss quantified results
Last but not least, bring the visualized results back to the group. They provide a great starting point for discussion among stakeholders. Since you determined your “shared ideals” before you gathered/evaluated your data, it allows you to have a more candid discussion of the options.
One last thing, It’s important to remember that all tools have flaws and the winning result in the rubric isn’t always the best solution qualitatively. You’re not bound by the tool that you created, often the discussion it generates is worth more than the data it provides.
Question of the Day
Do you have a similar process? Where have you applied it in your life?