Photo by Kyle Glenn / Unsplash

Optimal Stopping

leadership Nov 16, 2023

Leaders who succeed are better intuitively at the Optimal Stopping problem (also known as the Secretary Problem). Making decisions can be challenging, sometimes even daunting, but they rarely carry the level of significance we attach to them - they're not typically fatal. And the way we handle risk and choices in the face of uncertainties, and how we process risk and choices in the face of unknowns, can reveal a lot about our leadership approach. Heck, they may just define it! Recognizing when we are at a point where a decision can be made versus endlessly analyzing all options in the hope of finding the single best choice is crucial.

When you acknowledge the complexity inherent in choices and can be cool with it, you become much for effective in your decision-making. Also, realize that the gravity we sometimes assign to decisions often surpasses their actual impact. Over time, I've come to understand that a leader's style is intricately linked to their ability to manage risk and evaluate choices amidst unknown variables. I talk about this as being okay with a certain level of uncertainty. Rarely are things in our lives certain (see joke about death and taxes) so we have to do it to some degree regardless but it's in that leveling that you find your path forward. This means striking a balance between times when we're adequately informed to decide and times when we need to exhaustively consider each potential avenue. It's about weighing the risks of doing the wrong thing versus the risk of doing nothing.