Decision Trees: Structuring Cascading Choices Under Uncertainty

In leadership, many pivotal choices are not isolated events but rather cascading decisions – a sequence where the outcome of the initial selection dictates the viability and cost of subsequent investments.

Consider a recent facility acquisition decision: committing to Building A might necessitate extensive, high-cost renovations and incur significant long-term logistics expenses. Conversely, selecting Building B may require immediate capital for fit-out furniture but yields lower operational costs. Modeling these interconnected choices is the definitive domain of Decision Trees.

In this month's featured article, we detail a practical example of how to leverage Decision Trees for robust decision-making under uncertainty. Decision Trees are most applicable for scenarios that meet the following critical criteria:

• There are well-defined alternatives.

• Critical uncertainties can be quantified.

• The objectives are clear.

Enjoy the article! For bespoke coaching on applying Decision Tree Analysis to your specific challenges, please sign up here.

Our free article from last month on minimising biases was well received on our on our LinkedIn page. To further support leaders in enhancing judgment quality, we have released a free executive debiasing checklist.

We hope this proves useful as you continue your journey of making better decisions.

Looking Ahead: Chi Decisions Featured Articles

Toward the end of the year, our featured articles will cover:

• How to Make a Good Decision - Applying the SABUDI Framework

• Dual Nature of ERM - Defence and Offence (for our subscribers, this article is now available)

• Quantifying Risk | A Practical Path to Smarter Business Decisions

To gain access to all our articles as soon as we release them, please consider signing up for membership here.

For January 2026, we will dive into a niche area and work through the Application of QGN35 Guidance Note. That's targeted for our Queensland Coal Mining customers; however, the Bowtie principles are highly transferrable, so please bear with us.

If there is a topic you would like us to deep dive into, please respond to this newsletter or email us at admin@chidecisions.com.au.

Until then, keep a lookout for points you are about to make a decision and check yourself for bias.

Cheers

Arthur