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Human Performance & Leadership

The Metric That Quietly Made Leaders Worse at Decision-Making

Airlines thought their profit margins skyrocketed when they cut customer service – but data told a different story.

2026-06-061 min read

Many leaders, including some of the most successful executives in history, fall victim to the "satisficing" trap, where they prioritize efficiency and speed over thorough evaluation of options. This phenomenon was discovered by Herbert Simon, a Nobel laureate in economics, who coined the term in the 1950s. Simon found that when faced with complexity, leaders often settle for a "good enough" solution, even though it may not be the optimal one. This mistake is especially prevalent when leaders are under pressure to make quick decisions, which is common in fast-paced industries. Companies like Amazon and Google have faced this issue, with executives admitting to prioritizing speed over quality in the past. As a result, leaders may overlook critical details or ignore the long-term consequences of their decisions, ultimately leading to subpar outcomes. By recognizing this tendency, you can avoid the satisficing trap and make more informed decisions.

Key insights
• The satisficing trap is a common pitfall that even the most successful leaders face, highlighting the need for constant self-awareness and improvement. • Recognizing the satisficing trap allows you to avoid the mental shortcuts and biases that lead to subpar decisions.
• The satisficing trap is closely related to the concept of "mental accounting," which refers to the tendency to separate financial decisions into separate mental accounts. • By being aware of mental accounting, you can make more informed decisions that take into account the full range of options and consequences.
• The satisficing trap is not limited to business decisions; it can also apply to personal choices, such as choosing a job or a partner. • By recognizing the satisficing trap in personal decisions, you can make more intentional choices that align with your values and goals.
• The satisficing trap can be mitigated by using decision-making frameworks, such as the "pre-mortem" approach, which involves imagining a project or decision failing and identifying the causes. • By using frameworks like the pre-mortem, you can make more informed decisions that take into account potential risks and consequences.
Why it matters

By avoiding the satisficing trap, you become a more strategic and thoughtful decision-maker, making you more valuable to your organization and harder to replace.

This insight improves your ability to evaluate complex options and make trade-offs, leading to better decisions in high-stakes situations.

While most leaders are aware of the importance of speed and efficiency, few recognize the danger of satisficing, which gives you an asymmetric advantage in decision-making.

Use this tomorrow
1
In your next 1:1 meeting, ask your boss or colleague: "What's the trade-off between speed and quality in this decision, and how can we balance the two?"
2
When evaluating a new project or initiative, take an extra day to research and evaluate options thoroughly, rather than rushing to a decision.
3
When faced with a complex decision, ask yourself: "Am I settling for a 'good enough' solution, or am I truly evaluating all options?"
Go deeper

Herbert Simon's research on satisficing was first published in his 1957 book "Models of Man: Social and Rational." His work has since been widely cited in the fields of economics, psychology, and business. The satisficing trap is a fundamental aspect of human decision-making, and recognizing it can help you make more informed choices in both personal and professional contexts.

The satisficing trap has implications beyond business and personal decisions, as it can also affect public policy and social welfare programs. By recognizing the satisficing trap in decision-making, policymakers can make more informed choices that take into account the full range of options and consequences.