Understand The Best Decision Style To Use At Work

Consistently making good decisions is one of the most important habits we can form, especially at work.

James Wright
Jun 1 · 8 min read

For the most important decisions, you should choose Maximizing. For almost anything else, the choice should be to use Satisficing.

People make a huge number of decisions every day. Most are minor and made intuitively and spontaneously, almost automatically— what to wear, should I go for lunch now or in ten minutes? However, some decisions we make are much more important, and take real thought. Especially when applied to a decision made in a business setting.

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Traditionally a decision has been seen as a way to identify the option that promises the highest benefit or utility (the rational choice theory). However, many feel that can be unrealistic to achieve, and that people operate with two modes of decision making — something made famous by Kahneman in Thinking, Fast and Slow or Bezos in one of his open letters.

This article will raise attention to those decision-making styles, called Satisficing and Maximizing, and answer some of the questions you may have about how to apply them in the workplace.

When Good Enough, Is, Well, Good Enough

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Photo by Mnz on Unsplash

Satisficing (not to be confused with Satisfying) is a combination of “satisfy” and “suffice”.

Coined a half century ago by the economist Herbert Simon, it introduced a theory where Satisficers have an internal threshold of acceptability against which they evaluate options, and will choose the first option that crosses this threshold. Therefore, Satisficers readily settle for a good enough option — not necessarily the one with the very best outcome in all respects.

As an aside, this thinking was instrumental in establishing Behavioural Economics as a pursuit.

To illustrate, lets take a scenario: you need a new pair of jeans. You are out shopping, and are currently standing at the top of the high street or mall with credit card in hand. In your experience, you can usually find a pair of jeans at a store a couple of doors down, Best Jeans. Indeed you find a pair that fit, the colour is OK, and the price is pretty good. You buy them and head home.

You’ve taken the first option to present itself that simply met your standard and current needs. This is satisficing. It is often enabled by pattern matching on prior experience. Importantly in the workplace, it is fast, and by definition, is satisfactory under a range of possible circumstances.

Challenges with Satisficing

Satisficing, though, is subject to significant biases. With less information needed to evaluate options, judgement can come much more into play. Moreover, the threshold level of what is considered to be acceptable will be an interplay of business risks that derives from the decision-makers internal comfort zone — which again is subjective and open to human bias.

Experience, the basis on which thresholds and evaluations are often set seems like a reliable guide, yet can easily fool us instead of making us wiser. It is rare that precise matches with experience exist and not likely representative of the whole context — jeans are one thing, new website product features another. The odds are not made better, inevitably, because the decision maker’s experience is based on a small sample. All of this means we tend towards picking the same as last time (i.e. Best Jeans), and not opening up to other solutions.

Although not strictly part of the style, Satisficing is naturally more of an autocratic decision making style, with the thresholds most easily set and interpreted by managers, and individual intuition and “unconscious mental processes” being used by those with the experience and power to do so — typically managers again.

Application in the Workplace

Satisficing, has many saving graces however.

It means we don’t get caught up in the pursuit of perfection, even if that results in the very best option being overlooked.

Having a modest standard for what makes an acceptable choice, satisficing does not require complete information to make a call, lowering the overall cost and time to make a decision. Indeed several options could fall within the threshold of acceptability. Adding flexibility to how a business goal may be achieved.

What’s more, a Satisficer can easily ignore new choices being added, or conversely, be open to changing their minds, and choosing a different option, when given new information.

Research has shown that Satisficers have significantly less regret about decisions made this way. It has been suggested this higher degree of satisfaction “extends into stronger satisfaction of the team” but only if the team were involved in the process.

Maximizing

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Photo by Jorge Fernández Salas on Unsplash

What then is Maximizing?

Maximizing trades-off time and effort to ensure all plausible options are evaluated, and therefore you’ve made the decision as best as possible.

This time say, prior to setting off to buy those jeans, you sit down and work out just what you want. From the fabric, the weight, sizing, colours, price and every conceivable attribute that has some importance for you. You evaluate pros and cons. You break down where you can find such a pair of jeans. This time you are engaging your problem solving skills, and maybe those of your friends and colleagues. Instead of rushing to the first store, you spend the time (the afternoon maybe!) to look at all the suitable stores in the mall. It takes longer. But is a great way to ensure you don’t make a catastrophic wardrobe choice. However it must be weighed against the knowledge that every second you are making the choice, is taking you away from doing something else — maybe something more exciting or valuable.

This method requires exploration and analysis to ensure the “best” option hasn’t been overlooked, and that we have confidence in our evaluation of all options. It also means delay, and therefore accepting the cost of delay. Which, if you are designing for a nuclear power plant, may be sensible, but for a fast moving software company with intense competitors, it may not work out so well for you.

Challenges with Maximizing

Research has found that once maximizers have made a choice, they are unlikely to second guess themselves and tend not to reflect on whether they could have made a better choice. Which could be seen as decisive, or could be seen as a problem in complex environments.

An abundance of options also presents challenges for this style. For example, Schwartz (a scholar studying decision making) showed that shoppers who had to choose among 20 choices of jams (or 6 pairs of jeans) experience conflict and are less satisfied with their final selection. But they are likely to be more satisfied with a smaller selection. After the final selection, they remained anxious about the missed opportunities — maybe that other pair of jeans I tried was a better look after all!

Another factor that affects business, is the increasing difficulty in collecting and processing the information necessary to construct an informed, complete set of options. Choice proliferation makes it more difficult to correctly identify the best outcome on an objective basis.

As the number of available choices increase, a Maximizer’s standards of an acceptable outcome also inflates correspondingly.

Given the practical constraints of conducting an exhaustive search, a Maximizer’s high expectations can inevitably lead to disappointment and dissatisfaction with the final decision, but also a dogged desire to stick the course.

Application in the Workplace

The clear benefit to maximizing is that you are trying to achieve the optimal outcomes (or utility). And some research does point to greater outcomes for those that maximize.

Moreover, Maxmizing naturally, as time passes, provides opportunity to involve others and increase divergence of ideas in the selection criteria and the evaluation.

For those decisions that have great downsides, it may well be best to question and obsess over. Play devil’s advocate, challenge assumptions, consult customers and those impacted, and that all takes time. Therefore maximizers will spend more time in discussion.

Indeed, the benefits of being able to consider more options goes beyond confidence in the outcome, it can “enhance feelings of autonomy and freedom”, and “increase feelings of intrinsic motivation” both of which are critical to engagement and productivity in workplaces.

Conclusion

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There is a military maxim that no decision is the worst decision. This is because, in war, your position, and the lives of your soldiers, can quickly get overrun whilst you are thinking of what to do next. Although the risk of death is low in business, the life of the project or business area is on the line. The premise holds in a competitive fast-changing business environment, and the greater the competition pressure, the higher the chance of your initiative being culled if you vacillate.

If your business values moving quickly and accepting change and pivoting to new opportunities, then think about increasing your use of Satisficing. However, if the cost of making a call is high (designing an aeroplane or key infrastructure), you should accept the higher decision making costs associated with the Maximizing evaluative process.

To recap

  1. We make decisions by choosing the option that increase overall benefit including the cost and time of the decision process
  2. Decisions, and people, tend to fall into one of two categories, Satisficing or maximizing
  3. Satisficing: selecting the first option that meets a threshold of acceptability
  4. Maximizing: going with the best option evaluated against a set of criteria
  5. Because of its tendency towards speed, flexibility and outcomes satisfaction, Satisficing is best placed in fast-paced environments or low-risk decisions
  6. Maximizing is optimal for establishing and gaining agreement on the best route forward when time can — or should — be traded off

For the most important decisions, you should choose Maximizing. For almost anything else, the choice should be to use Satisficing.

I hope this has helped you appreciate the different modes of decision making you can bring into choosing different options in your workplace and life.

Further Reading

  1. Blink—learn to trust your intuition
  2. Gut Feelings — the scientific underpinning of intuition
  3. Maximizing versus Satisficing — how we feel after making a decision
  4. Thinking, fast and slow — the dual process of thought brought to light
  5. Amazon Shareholder Letter — Bezos introduces the concept of one-way and two-way doors to decisions with Amazon

James is a Software Delivery Manager at SEEK, an online career and recruitment company based in Melbourne, Australia. He has spent a good part of his career leading small cross-functional software development teams. And prior to that was a long-term Software Architect and Engineer in London, Zurich and Melbourne. He has a Master in Computer Science.

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James Wright

Written by

I write about leadership and organisational psychology topics applied to agile teams

SEEK blog

SEEK blog

At SEEK we’ve created a community of valued, talented, diverse individuals that really know their stuff. Enjoy our Product & Technical insights…

James Wright

Written by

I write about leadership and organisational psychology topics applied to agile teams

SEEK blog

SEEK blog

At SEEK we’ve created a community of valued, talented, diverse individuals that really know their stuff. Enjoy our Product & Technical insights…

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