Satisficing – A Decision Making Strategy for Health Care Leaders

On March 20 The Economist (web edition only) published a short bio of the late Herbert Simon, 1978 Nobel Laureate in economics, who is considered to be one of the leading management thinkers of his time. The piece is a synopsis of a longer chapter in “The Economist Guide to Management Ideas and Gurus”, by Tim Hindle.

Simon’s area of special interest was decision making by managers – he is known best for developing the “theory of bounded rationality.” The Economist describes this as: “… a theory about economic decision-making that Simon himself preferred to call “satisficing”, a combination of two words: ‘satisfy’ and ‘suffice’.” As I read about this, it seemed to pretty well sum up the conundrum healthcare leaders find themselves in – and why former clinicians can feel really conflicted as managerial leaders.

Facing Up to Our Limits

According to this article, Simon developed the concept of satisficing in recognition of how managerial decisions must be made given what he termed “cognitive limits” – the practical limitations on access to information coupled with the human brain’s biologic limitations on the ability to contemplate more than a fraction of information that is theoretically required for decision making .

As a result, Simon reasoned, there is immense pressure on human beings to adopt a “good enough” approach to many situations. Now, this is a big problem for healthcare leaders, especially physician leaders who often have been well-respected clinicians. Can we really think of ourselves as seeking to make “good enough’ decisions when lives are at stake? Well, apparently if we take our heads out of the sand, we will face the fact that due to our “cognitive limits” it’s simply the way things often are managerial – even if we think otherwise. It flies in the face of who we are, or have been, clinically.

Which Man (Woman) Are We Anyway?

Simon appears to recognize this dilemma. He describes two archetypes – “economic man” who seeks to make optimal decision to maximize economic gain and “administrative man” who knows his limits, and the limits of the system, and therefore satisfies. In Simon’s words: “Because he treats the world as rather empty and ignores the interrelatedness of all things (so stupefying to thought and action), administrative man can make decisions with relatively simple rules of thumb that do not make impossible demands upon his capacity for thought.”

It seems to me that one of the big problems with becoming a healthcare managerial leader (“administrative man”) after having been an outstanding clinician (“economic man”) is that our idealistic instincts to optimize come into immediate conflict with organizational pressures to make decisions that are broadly effective and acceptable – and we are therefore forced into a lot of pragmatic “least common denominator” thinking.

Administrative Schizophrenia?

Sometimes this works out OK. I am currently working with physician and informatics leaders on a physician engagement strategy to support an enterprise EMR implementation at a large, complex, medical center. Physician leaders and IT administrators have both come to the conclusion that getting off the ground requires a “good enough” approach to the first live version of the inpatient EMR and that “the perfect is the enemy of the useful” should be the guiding implementation moniker. However, at the same time, this project is being promoted as a “path to excellence” in clinical care and patient safety. Which it is as well. True- True, and related.

The dilemma in Simoneze terms, it seems, is for physician leaders and health care executive leaders to balance “administrative man” with “economic man” at all times. While this could lead to administrative schizophrenia I’d prefer to think about it as bringing the “best of both worlds” to the table. Which is what effective healthcare leaders try to do all the time. What’s important about Simon’s framework is that it provides the theoretical and scientific framework for understanding why we feel so torn apart, as well as the validation we require to be unafraid to be pragmatic while simultaneously holding our more perfectionist core values.

We can’t duck our “cognitive limits” but there’s no reason we can’t be satisfied as “pragmaperfs,” now is there?