These three things are different. They represent three forms of decision making, but I suggest they also represent three different kinds of people. Call it personality, or genetic predisposition, or both. It’s important to understand these differences because in our organizations we have a mixture of the three. You as manager or leader would fall into some of these categories. Ignoring the differences between them has a price, mostly in the form of driving each other mad.
‘Driving each other mad’ is a main feature of teams (top or otherwise), or any other form of social grouping, when people do not understand the impact of differences in ‘work preferences’ or their their different mental frames on decision making. Labelling it ‘we have a communication problem’ doesn’t help because it doesn’t mean anything. In fact most ‘communication problems’ have little to do with communication and more with differences in ‘zones of comfort’. Decision making is one of these zones.
Maximising implies making the most of the utility of things. Optimising, obtaining the best possible outcome from what is available. These two approaches are easy to understand although you see people, again and again, confusing one with the other. Far less entrenched in language is the concept of satisficing: declaring something good enough, once this is found amongst a number of alternatives. Satisficing is an old concept defined by Herbert A. Simon (psychologist, sociologist, economist) in 1956, ‘to explain the behaviour of decision makers under circumstances in which an optimal solution cannot be determined’.
The good maximiser needs to know and explore all possibilities in order to decide what the maximum benefit is. The optimiser will choose ‘the best possible outcome’ as a priority, and this may not be the maximum. The satisficer will shortcut quite a lot of the exploration and will make a decision once an acceptable threshold of ‘good’ or ‘desired’ has been found. I repeat, this is done at the expense of not looking at all possibilities and therefore, potentially missing something much better. Its not that the satisficer settles for just anything, but that his mind does a mental calculation: Is the cost of exploring all possibilities in order to maximise or optimise worth the effort, or is this good enough to decide, move on, and spend that energy somewhere else?
Lets say we go shopping. I need to buy a new suit. The big shopping mall has at least 10 places where I can buy it but I don’t know them particularly well, so I can’t go straight to the one that I like, and know that I should buy from. I start from the South and move up. I hit the first suit shop. I don’t like what I see. I keep moving and find the second. Here, there is a decent suit, good price and very suitable for what I need. I like it. The maximiser will say, keep it for me, I’ll come back later, and he will continue to visit the other eight shops until he has all the data to make a decision, which will based upon the best value for money. The optimiser will do the same but may buy the best, in his judgement (and concept of ‘optimum’) even if not the cheapest. Both will need to know what all the possibilities are, so both will visit the entire mall. The satisficer buys the suit in shop 2 and spends the time that it would have taken to visit the rest of the mall doing something else. His mind has asked the question: ‘Is it really worth spending three more hours here if the suit I have in front of me is great?’ And: ‘Get out, and finish that book at home before you get trapped in the rush hour traffic’.
The maximiser and optimiser think that the satisficer is lazy, or has bad judgement, or does not care much about suits other than getting one. The satisficer finds the others tedious, obsessive and trying to rationalise something (decision making for suits) that does not deserve this level of rationalisation.
The above are, of course caricatures. However, if you, as leader try to understand your people in terms of the mental models they are using for decision making, you may find yourself well advanced to avoiding conflicts and not simply reverting to labelling them ‘communication problems’.
Note 1: maximization and optimization are politically correct options in organizations.
Note 2: try to assess yourself on these criteria without using ‘it depends’ as the start of your sentence.
Note 3: you may think that you are a satisficer when buying suits and optimiser when writing a strategic plan. If so, imagine a strategic plan written with the ‘satisficer decision making’ hat. You may discover some major benefits.