Business Leaders Should Not Optimize Everything

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CEOs may push their subordinates to optimize every decision, but those managers, in turn, bump up against their own time limitations.

Many highly admired business leaders want everything perfect. That sounds good, but in most cases it’s wrong. It’s wrong because the business leader’s most limited resources is time—his or her own time as well as the time of subordinates. Even though they work very long hours, they run out of time to make everything perfect.

Perhaps the optimize-everything goals get pushed down the ladder, but eventually the lower level managers run out of time. The optimum solution is to not optimize everything. A good summary of that approach was discussed in the. The alternative is to pick just a few things to optimize. For personal decisions, one optimization might be relationships, purpose or spirituality. Each person must choose what to optimize. It’s fine to optimize homemade bread, if that is one’s passion.

“Satisficing” means a combination of satisfying and sufficing. “Good enough” captures the idea. The word’s creator, Nobel laureate , said that many systems are too complex to identify an optimum solution. Our choice is to find the optimum with simplifying assumptions, or to satisfice with real world assumptions.. This business strategy book in the form of a novel has a telling segment when the CEO impresses on the management team the need to grow sales—but some managers translate that goal into working more hours.

 

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