Satisficing Versus Optimizing

Why this matters

Owners do not run out of decisions. They run out of hours. The owner who spends an evening comparing three shop vacs and then picks field software after a single sales demo has not been careless, he has spent his research time in proportion to how easy each decision felt rather than how much it mattered. The small decisions are concrete, quick to compare and satisfying to finish. The big ones are vague, slow and uncomfortable. Left alone, attention flows to the first kind. This card gives a short test for which decisions deserve real research and which deserve "good enough, move on," and a method for each.

The terms

Satisficing is the economist and psychologist Herbert Simon's word, coined in the 1950s by blending "satisfy" and "suffice." It means setting a standard for what is good enough, then taking the first option that meets it. Simon's point was that real people with limited time and information cannot evaluate every option, and that a good-enough rule is often the rational choice, not a lazy one.

Optimizing (Simon's contrast, sometimes called maximizing) means searching the options for the best one available. It is worth it when the difference between the best and the merely acceptable is large and you will live with the result.

The psychologist Barry Schwartz and colleagues later studied people who habitually maximize every choice. They tended to be less satisfied with their outcomes than people who satisficed, even when they did measurably better, partly because they kept comparing after the decision was made. In a shop that cost shows up as an owner who is still second-guessing last spring's truck.

The test: four questions

Ask these of any decision before deciding how much research it gets.

1. What does a wrong choice cost? Not the price of the thing, the cost of having picked badly: the rework, the downtime, the person you have to let go, the software migration two years later.
2. How long will you live with it? A choice you make again next month gets corrected by next month. A truck lasts years. A lead tech can shape the crew for a decade.
3. Can you undo it cheaply? The door-type idea has its own card; the short version here is that a choice you can reverse in a week rarely deserves weeks of research. See related: Reversible and Irreversible Decisions in a Small Shop.
4. How far apart are the reasonable options? This is the question owners skip. If every option that clears your basic standard performs within a few percent of the others, research cannot find a meaningful winner, because there is not one to find. Research pays only where the options genuinely differ.

The rule: a decision earns real research when it scores high on at least two of the first three AND the options genuinely differ (question 4). Anything else gets satisficed.

That fourth question is what keeps the test from sending everything expensive into a research spiral. Two reputable brands of the same class of service truck, configured the same way, may differ less than the dealer's delivery date does. The truck is expensive and long-lived, but if the options are close, the research worth doing is narrow: the upfitting, the dealer's service department, the delivery date, not a month of spec-sheet comparison.

The worked example: one owner's month

The owner of a twelve-person HVAC shop kept a rough log of research time on decisions over one month:

Run the rule. The vac, uniforms and phone plan score low on cost and are reversible, and their options barely differ: satisfice all three. Software and the hire score high on all three of the first questions and their options genuinely differ: optimize. The truck scores high on cost and duration, but its options differ only somewhat: research, but narrowly.

The totals: 3 + 4 + 2 = 9 hours went into the three small decisions, and 6 + 5 + 2 = 13 hours into the three big ones. The owner spent 22 hours, and about 41% of it (9 of 22) on decisions where research could not have changed much.

The reallocation. Satisfice the three small ones at about 30 minutes each: write the minimum standard, check two options, take the first that clears. That frees 9 minus 1.5 = 7.5 hours. Move them to the big three, which then get 13 plus 7.5 = 20.5 hours. Same 22 hours. In practice:

• Software, about 10 hours. Two serious candidates, each trialed on a week of real jobs entered by the office manager and one tech, plus two calls to similar-size shops using each. A demo shows the software at its best. A week of your own jobs shows it at yours.
• The hire, about 7 hours. A paid half-day working interview for the top two candidates, plus reference calls to former supervisors rather than the names the candidate offered as friends.
• The truck, about 3.5 hours. Upfitting, the dealer's service turnaround, and delivery date, which is where the trucks actually differed for this shop.

The owner did not work more. The research landed where it could change an outcome.

How to satisfice well

Satisficing is not "grab whatever is nearest." It has a method, and the method is what keeps good enough from sliding into bad.

Write the standard before you look. Two to four must-haves, written down. For the shop vac: wet and dry, big enough for a day's job debris, available locally today, a warranty the shop will actually use. Writing it first stops you from being steered by whichever option has the best packaging.

Look at options in a natural order and take the first that clears. Your usual supply house first, then one alternative. If the first clears, you are done.

Cap the time. Thirty minutes for the small ones. When the cap hits, take the best option that cleared the standard so far.

Do not reopen it. The whole value is in the hours saved. Comparing prices on the vac you already own costs the same time again for nothing.

How to optimize well

Optimizing is not "read everything." It is targeted search where the options differ.

Find where the difference lives. For software it is daily usability by your least technical person and the quality of the vendor's support, not the feature list. For a hire it is how the person actually works, not how they interview. For a truck it is often service and availability. Put the hours there.

Test on your own conditions. A trial with your real jobs, a working interview on your real equipment, a reference from someone who supervised the person. Information produced in your conditions beats any amount of general comparison.

Set a stopping rule. Stop researching when the next hour is unlikely to change your choice. A practical test: if you would pick the same option whatever the next piece of information said, you are done. Research past that point is anxiety, not diligence.

What changes the answer

Shop size changes what counts as big. Field software for a three-person shop that could switch in a weekend is a moderate decision. For a forty-person shop with years of job history and integrations, it is one of the biggest calls the owner makes that year. Run the test on your shop, not on the category.

Repeated purchases deserve one optimizing pass, then satisficing forever. A capacitor, a filter size or a fitting you buy hundreds of times a year adds up even though each purchase is small. Do one careful comparison, pick the standard part and supplier, write it down, and then never think about it again until something changes. That is optimizing once so that everyone in the shop can satisfice on autopilot.

A hire is almost never a satisficing decision. The pressure in a busy season is to take the first candidate who can do the work. The cost of a bad hire is months of drag on the crew and a painful exit, and candidates differ enormously. If you must fill a seat fast, fill it with a clearly temporary arrangement and keep optimizing the permanent hire.

The failure modes in the field

Optimizing the trivial. The naval historian C. Northcote Parkinson described a committee that approved a nuclear reactor in minutes and argued at length over a bike shed, because everyone understood the bike shed. In shops it is the management meeting that spends forty minutes on uniform colors and five on whether to bid a commercial contract. The cue is effort tracking how easy something is to understand rather than how much it matters.

Satisficing the important. The truck bought because it was on the lot the day the old one died. The software chosen because a friend uses it. The lead tech hired because he was available Monday. These are rarely conscious choices to satisfice. They are urgency making the decision, and the cure is to start research on long-lived decisions before the urgency arrives: the truck at 150,000 miles, not on the shoulder of the highway.

Satisficing with no standard. If you cannot say what good enough was, you did not satisfice. You took the first thing. Writing the standard down is the step that makes it a decision.

References

• Simon, H. A., "Rational Choice and the Structure of the Environment," Psychological Review (1956)
• Schwartz, B. et al., "Maximizing Versus Satisficing: Happiness Is a Matter of Choice," Journal of Personality and Social Psychology (2002)
• Parkinson, C. N., Parkinson's Law (1957), on the law of triviality
• See related: Reversible and Irreversible Decisions in a Small Shop
• See related: Scoring Options with a Weighted Decision Matrix