There is a dynamic tension in today’s workplace. With the rise of activist investors, the ubiquity of technology that spreads news instantly, and increasing public scrutiny of corporate actions, business leaders are more driven than ever to aim for perfection. And yet the speed of business also forces these leaders to make immediate decisions. So, while there is often a need to make an ideal choice, there is also a need to make a choice now, even if it isn’t perfect. What to do?
This is the tension between maximizing and satisficing.
Maximizing: Maximizing involves searching for the most optimal solution and continuing that search after making a choice, just in case even better options come along. It’s the ultimate “grass is always greener” mentality. Being perfect is often seen as a badge of honor, and many people are proud that they never settle for second-best. There are many industries where maximizing is ideal. My smart phone works and my car gets good mileage, but I wouldn’t mind an even better phone and a car that got even more miles per tank. Telecom and automotive industries, please continue maximizing!
But there are other scenarios where maximizing is harmful. In medicine, letting a disease continue while waiting for the perfect cure may not be smart if there is an adequate treatment already available. When hiring for open positions, companies may not have time to wait for the perfect candidate because there are qualified people in the applicant pool and the job needs to be filled ASAP. Even in the industries I mentioned above, maximizing can be problematic. I still need a smart phone and car today - I may not want to wait for the next generation of technology. Striving for perfection is ideal, but not always possible.
Satisficing: Satisficing is a term derived from the words “satisfy” and “suffice”  and it explains how people make choices when they cannot consider all possible options. People may lack information, or time, or the cognitive ability to consider all the options to make the perfect choice. Instead, they select an option that satisfies what they want and is sufficient to meet their needs. It’s not about settling for less; settling might not meet the person’s need and it would certainly be dissatisfying. Rather, satisficing is about recognizing that there may be several acceptable alternatives, and so long as you choose one of them, you’re good to go.
You satisfice hundreds of times each day. For example, think about the decisions you make while buying orange juice at the grocery store. You can have it from concentrate or fresh squeezed, without pulp or with some pulp or lots of pulp, with vitamin D or calcium or neither or both, from oranges that are organic or not. A single store can have dozens of combinations of these different options, just for “simple” orange juice. And these options don’t even account for price, container size, whether you have manufacturers’ coupons, or if the store is running a sale. Without satisficing, you could spend hours contemplating the range of options and trying to pick the most optimal choice. But we can’t afford to be paralyzed by each decision that’s as complicated as buying orange juice.
The solution, of course, is balance.
Is Perfect the Enemy of Good Enough? This is a question I ask myself and my teams when faced with challenging dilemmas. There are certain moments where perfection is absolutely required. Sometimes, the product, decision, or action just has to be right. In those cases, it’s worth the time and energy to thoroughly consider all options, weigh the pros and cons, and make sure you reach the best conclusion. However, there are other times where good enough is exactly that: good enough. The trick is knowing your audience (supervisor, customer, shareholder, etc.) to balance the two.
By asking this question, I’m certainly not advocating laziness or a laissez-faire approach. When the stakes are high or when there is enough time and information, I’ll always aim for perfection. Maximizing is a useful antidote to a pattern of satisficing that causes people and companies to rest on their laurels, avoid risks, or miss huge opportunities (remember Kodak?). But when the decision doesn’t have much impact on the final outcome, perfect may not matter. And when resources are limited, perfect may not be achievable. In those cases, maximizing can halt forward progress or blind people into making even worse decisions than they would otherwise.
Satisficing is an antidote to maximizing because it drives people to meet their needs, but also gives them permission to prioritize other resources (time, energy) and accept less optimal choices when they can. In fact, satisficing also helps people live with the decision after it has been made. This is important because they can put decisions behind them and not use valuable time and cognitive energy second-guessing themselves.
After all, we have better things to do than re-think which type of orange juice we bought last week.
- Simon, H. A. (1956). Rational choice and the structure of the environment. Psychological Review, 63, 129–138.