Influence Diagram Template

Keep reading to discover how our Influence Diagram Template can help streamline your decision-making.

What is an Influence Diagram?

An Influence Diagram provides a high-level visualization of the factors that impact a decision. It identifies the decision to be made, the factors within and beyond your control, and the potential outcomes you can evaluate to determine if they meet your objectives.

Unlike more detailed decision-making tools like Decision Trees, which map out every possible decision step by step, an Influence Diagram simplifies the process. It allows you to think through and revise each influencing factor as needed, making it a more flexible tool for decision-making.

Benefits of Using an Influence Diagram

Making decisions is challenging, but an Influence Diagram provides a high-level view of key factors, giving you the clarity needed to make informed choices.

Because Influence Diagrams are simple and visually intuitive, they’re easy for everyone to understand. Their standard notation clearly represents the types of factors involved, making it accessible to employees, executives, and stakeholders alike.

Influence Diagrams are versatile and useful for any business professional looking to improve decision-making. In project management, they help mitigate risks and predict uncertainties that could negatively impact project outcomes. In strategic planning, they assist in selecting the best course of action for the future of your business.

Create Your Own Influence Diagram Template

With FigJam, creating an Influence Diagram is simple and flexible, allowing you to refine influences or reframe your decision as needed. Here’s how to get started:

Step 1: Define Your Decision

Start by clearly defining the decision you need to make. It could be a yes/no question or something requiring a value, like a budget. Enter this decision in the rectangle provided in the template.

Step 2: List Influencing Factors

Next, list everything that could impact your decision. You can use FigJam to create your list and collaborate with others for their input. Some factors might depend on each other or vary based on incomplete information.

Step 3: Use Standard Notation

Assign the correct notation to each factor in your Influence Diagram. The four main types of nodes include:

• Decision (rectangle): The core question you are trying to answer.
• Uncertainty (oval): Variables that are unknown or outside your control.
• Function (rounded rectangle): Factors that can be calculated or influenced.
• Value (hexagon): The final outcome you’ll evaluate to see if it aligns with your needs.

Step 4: Connect the Nodes with Arrows

Draw arrows between nodes to represent relationships of influence or dependence. Arrows indicate how one factor impacts another. For instance, in the template, the decision to sell internationally depends on unit variable cost, while market demand and marketing strategy influence the number of units sold.

You don’t need to connect every node — sometimes the absence of an arrow is informative and helps clarify the decision-making process.

Step 5: Review and Refine

Return to the original decision node and trace the paths of influence throughout your diagram. You may need to adjust some factors or reframe uncertainties as you see how they relate to each other. An influence diagram is a real-time thinking tool, so feel free to make changes as you refine your decision.

This flexible approach allows you to continuously improve the diagram as new information comes to light.

Example of an Effective Influence Diagram

Let’s look at a simple example from our pre-filled Influence Diagram template. In this example, the rectangle in the bottom right-hand corner represents the decision: Should the business sell internationally?

This decision impacts the unit variable cost, which is an uncertainty depicted by an oval. The direction of the arrow shows that the decision influences this cost. Once the unit variable cost is known, it affects the overall cost to the business.

By following the nodes and arrows, you can see how each variable influences the others, shaping the overall outcomes and, ultimately, the final decision. This example demonstrates how an Influence Diagram helps visualize dependencies and interactions between factors, leading to more informed decisions.

Why is an Influence Diagram important?

An Influence Diagram is a quick and effective way to visualize the influences and risks involved in a given scenario. By focusing on decisions at a high level, it simplifies complex problems, making them easier to understand. This approach helps you and your team gain deeper insights into the decision-making process, promoting better collaboration and clearer thinking.

What do arrows represent in an Influence Diagram?

Arrows in an Influence Diagram represent either dependence or relevance, depending on the type of node they connect to. For example, an arrow from an uncertainty node to a value node indicates that the value depends on the uncertainty. Similarly, an arrow from an uncertainty node to a function node suggests information you need before determining the function.

What’s the difference between a Decision Tree Diagram and an Influence Diagram?

An Influence Diagram provides a high-level view of a decision, focusing on key factors, uncertainties, and the information required to make a decision. It emphasizes simplicity and understanding of the decision-making process. A Decision Tree Diagram, on the other hand, is more detailed and complex. It maps out a sequence of decisions, creating a series of yes/no questions to explore all potential outcomes for a scenario, covering every possible alternative.