In any business organization, decision-making involves considering multiple related factors before opting for the right option. Using a decision tree can make the procedure seamless and help organizations easily make tough choices. This article will offer you a complete guide on the decision tree and discuss its importance, component, use cases, and decision tree-making process. Also, we will share some free decision tree templates with you.
What Is a Decision Tree?
A decision tree is a type of flowchart that you can use to go through all possible decisions and their outcomes. Every branch of a decision tree refers to a choice you can go for. The good thing about the decision tree is that you can scale it up based on the cause and effect. All you have to do is to extend a branch when a result leads to another course of action.
Importance of a Decision Tree
Those involved in any type of professional decision-making would know that it is a complicated process. To come up with a decision, you need to have a deep understanding of facts and intuition. People often use tools like a decision tree template to outline all possible outcomes. It also helps you visualize the necessary steps for arriving at the best decision. Decision-making is a kind of problem-solving that needs you to apply logic and probability. Using a decision tree template, users can readily organize all the data available. They can also fill the gaps by combining probabilities with the information to make the right decision. Startups and SMBs will find decision trees particularly helpful because these companies have limited resources, and it is not easy to get financial buy-in. On the other hand, large companies and enterprises can utilize decision trees to find the right options before presenting them to their stakeholders or an internal team. You can use decision trees to find out if a new product is viable or if a product can get investments. All you need is to utilize your creativity to evaluate the endless options.
Common Components of an Ideal Decision Tree
Though decision trees help you deal with complex data, these are not difficult flowcharts to understand. The followings are the essential components you will find in all decision trees.
Root Node: Every decision tree starts with a central theme or question. It is called the root of a decision tree. All other nodes and branches come out of it.
Leaf Node: These nodes represent various decisions and outcomes. It could be a decision node (square shape) that represents a decision, a chance node (circle shape) that represents the probability, and an end node (triangle shape) that represents the result or outcome.
Branch: These are used to connect different nodes.
Here are some additional terminologies often used in a decision tree:
Internal Node: Every node between the root and leaf nodes (decisions and chance nodes) is called an internal node; you can have any number of internal nodes.
Pruning: Pruning is the method you use to remove nodes containing irrelevant data when the decision trees become complex.
Splitting: When a node gets divided into two or more sub-nodes, we call it splitting or branching. These sub-nodes can be internal or end nodes.
Step-by-Step Guide to Creating a Decision Tree
When you are about to create a decision tree, these are the steps you should follow consequently.
- Have the Central Question: To create a decision tree, you should start by putting your main question in the decision tree template.
- Add Branches Around the Question: Think of some possible options that you can choose. For each of these, draw a line with a node at the beginning and a leaf node at the end.
- Include Leaves: Use an if/then statement to label each leaf node. Thus you can point out the consequence of each choice.
- Put More Branches If Needed: Keep growing the tree with more branches and leaves with proper labeling.
- Evaluate and Decide: As you go on to answer all the questions of the decision tree, you can reach your decision.
- Check With the Stakeholders: If you have come up with a decision alone using this decision tree template, share the result with the other involved parties before proceeding with your decision.
Real-Life Use Cases of a Decision Tree
A decision tree is a powerful tool and highly popular among data analysts who create business operations strategies. It is also used in machine learning and artificial intelligence for training algorithms. The use of decision trees can be seen in the following industries:
A technology company that wants to evaluate business growth opportunities. Banks and financial organizations need to predict the chance of payment default using historical data. A hospital has to prioritize patient care depending on crucial factors like age and symptoms. A logistics company with the need to decide on strategic management.
Now that we know the benefits of decision trees let’s look at some of the best sites to get decision tree templates.
Miro
Miro is a team collaboration tool that offers you a variety of templates for businesses. You can access its decision tree template for free by adding it to your team board of this application. It even comes with a video that will help you use the template. This template offers you a wide variety of customization options, such as node color, font size, font color, lock, grouping, and filtering objects. You can add or remove any node according to your requirements. Miro also lets you save the template as a PDF and image; or export it to a spreadsheet (CSV) and Google Drive.
TemplateArchive
TemplateArchive also offers a collection of 25+ decision tree templates that you can download and edit in simple steps. The templates available on this website contain different formatting and tree styles, so you can choose the template that goes with your brand style. Some of the templates have designs to solve simple issues in a handful of steps, while others can help you find answers to complex questions. Open these on MS Word and edit accordingly to reach your decision.
Mural
Mural is a visual collaboration platform where you can get a free decision tree template for your team. Choose the “create Mural from template” option after opening the template, and it will be ready to edit. It has tooltips located on the left panel of the template to help you with navigation. You can seamlessly move any node or branch to personalize it. You can export the completed tree in PDF, PNG, or ZIP formats. It also supports branch type change, node color change, zoom, lock and facilitator lock, tip change, direction change, labeling, tagging, adding a link, text formatting, border, and stroke width. You can switch to sketch format to draw a decision tree manually.
SmartDraw
SmartDraw is an ideal option if you want to get tailored templates for your decision-making. Here, you will get separate decision tree templates for Financial Risk Analysis, Development, Company Merger, and Project Development. It lets you quickly add additional nodes in different directions of a node in a click. You can also add notes, hyperlinks, or comments to a node. From the left panel, you can customize the shapes, layout, and formatting of the decision tree. You can export the decision tree in CSV format and import data into it from CSV, XLS, and XLSX files.
Canva
Many Canva users do not know that this platform offers free decision tree templates for decision visualization. It provides multiple professionally-designed templates that will simplify your strategic challenges. The platform has many drag-and-drop tools that non-designers can use to modify the template. You can change the font size, font style, alignment, and text format easily on this tool. Users can also add animation and effects to the template to make it attractive. Canva also supports sharing or downloading your decision trees in high resolution. You can also embed the decision tree in presentations and reports without hassle.
EdrawMax
EdrawMax offers several curated templates of decision trees, including App Development, Python, Asset, Statistical Test, Data Mining, and Operation Airbridge. Choose any template and click on Duplicate to open it for editing. From the left panel, you can add and modify the shapes included in the decision tree. The right panel options let you customize line, fill and shadow. Moreover, you can personalize the template using numerous other options this platform offers. EdrawMax allows you to export the decision tree in PDF, DOCX, XLSX, PPTX, HTML, SVG, and graphics formats.
Concluding Words
Whether you are stuck between two business options 🤔 or looking for a guideline to resolve any issue, a decision tree can help you with much-needed motivation. Regardless of the company size and problem criticality, a decision tree is a handy approach to coming up with the ideal decision. Using the websites mentioned above, you can get a decision tree template suitable for your needs. Before finalizing a decision, you can also check out free SWOT analysis templates to find your strengths and weaknesses.
