Decision Tree Template

About the Decision Tree Template

The decision tree template, also known as a decision tree diagram, helps teams better outline potential outcomes and choices before committing to a decision. 

Starting with a central topic, a decision tree links words and boxes to show two options and the outcome of your decision-making. The shape of the tree represents the final outcome if the line of decisions was followed. The decision tree template can be used to strategically assess the decision-making process and possible outcomes before investing time and money in a decision. 

What is a decision tree?

A decision tree is a flowchart that is used to walk through all possible decisions that can be made and the outcomes of those decisions. Each “branch” represents a choice that’s available while making a decision. 

Decision trees are infinitely scalable and driven by cause and effect. You can extend a branch when an outcome leads to another course of action, and then extend that branch, and so on. 

A decision tree template can be useful in assessing options and their outcomes before committing to a solution so that you can ultimately make the best decision with the least downside and the most upside. It provides a stylized world in which you can play out a series of decisions and see where they lead, rather than committing real-world time and resources unnecessarily.

Why are decision trees important?

The decision tree template is a powerful tool. You and your team can use it to predict or to describe. In either case, decision trees allow you to visualize outcomes and play through scenarios without investing actual resources. 

Startups and smaller companies might find decision trees especially valuable since resources are tight and it can be difficult to get financial buy-in. Enterprise and larger companies can use decision trees to test-drive options before presenting them to a broader team or a busy stakeholder.

Use decision trees to figure out whether a new product is viable, a new market opportunity has opened up, or to examine possible investments. The options are endless, and the decision tree maker is malleable. The only limit is your creativity.

How to create a decision tree in 6 steps

Step 1: Define your question. Begin your decision tree template with a central theme or question you are trying to answer. For example, which company should we partner with?

Step 2: Add branches. Imagine a few possible choices you could make. In this example, you could partner with Company A or Company B. For each of these alternatives, draw a line that begins at a node and ends at a leaf node.

Step 3: Add leaves. Add a leaf node at the end of each branch. Label the leaf nodes with a question or choice. At each step, think about your alternatives as “if then” statements.

If you partner with Company A, then what will happen? One option is that you might increase your total number of customers because people have strong positive feelings toward Company A. The other option is that you might decrease your total number of customers because people have strong negative feelings toward Company A.

Repeat this exercise for Company B. Again, conceptualize your leaves and nodes as “if-then” statements.

Step 4: Add more branches. Keep building your decision tree using branches and leaves. Be careful to label your branches and leaves to stay on track.

Step 5: Terminate branches. Make sure you’ve answered every question in the tree. That means you should have worked through all “if-then” statements you’ve encountered. Complete your branches.

Step 6: Double-check with stakeholders. When your decision tree is finished, take this opportunity to make sure all your stakeholders are on board. Remember, the decision tree template is designed to emulate the real-world ramifications of your decisions. Use the tree to talk through every possible choice, figure out alternatives, and build out additional branches as needed.