Many people have become habitual option collectors — a mindset that prevents them from reaching their goals. They don’t want to miss out on anything, so they hold on to too many options without taking action.
If you are not sure what to do with your life, you can easily fall prey to the optionality fallacy.
The primary essence of optionality is the ability to exercise the most favourable option that will advance your goals without predictable knowledge that would allow you to make an informed decision.
“Keep your options open” is not necessarily a bad advice but when it stands in the way of taking action, you will miss out on a lot of experiences in life and waste your precious time in the process.
“Research by Harvard psychologist Dan Gilbert, author of Stumbling on Happiness shows that reversible, keep-your-options-open decisions reliably lead to lower levels of satisfaction than irreversible ones. In other words,
we are significantly less happy with our choices when we can back out of them,” writes Heidi Grant Halvorson, a psychologist and author of No One Understands You, and What To Do About It.
Optionality is a popular concept in the finance world.
“When you hold an option and the world moves with you, you enjoy the benefits; when the world moves against you, you are shielded from the bad outcome since you are not obligated to do anything. Optionality is the state of enjoying possibilities without being on the hook to do anything,” writes Mihir A. Desai, a M.B.A. graduate of Harvard Business School and a Ph.D. graduate of the Graduate School for Arts and Sciences.
People in finance love collecting options, especially low-cost options. Every option has a cost associated with it though. Preserving optionality means waiting as long as possible to make a decision.
The same mindset, when applied in life, may not be a good idea if you keep hedging your bets without taking action. Success comes from taking strategic actions.
Optionality can be a backup tactic, not something to pursue first. When maximising options becomes an end in itself, you can never achieve your goals.
Life is ultimately about choices — what you choose to do and as a result, what you choose not to do.
If you are choosing amongst options that are relatively inexpensive, or without high life-changing costs, you can benefit from the theory of options.
Nassim Taleb, author of Antifragile: Things That Gain from Disorder argues that prediction is impossible in the modern world is impossible hence the need to maximise optionality.
Instead of trying to predict what is going to happen, position yourself in such a way that you have optionality.
He explains, “If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognise favourable outcomes when they occur.”
But for anything to qualify as an option, it must have limited downside with large, open-ended upside.
Beware of the Optionality Trap
“Keep your options open” is the advice offered to many of us at different stages of out lives. “While this advice isn’t necessarily wrong, very rarely do we take a step back and examine what exactly we’re collecting all these options for,” explains Neil Soni, author of The Startup Gold Mine.
In many situations, “You can’t steal second base and keep your foot on first.”
If applied in many life situations, the optionality maximisation mindset can turn into habitual option collection and prevent you from making a decision, taking a step, or advancing your goals.
“Once we’ve committed to a course of action, we stop thinking about alternatives. Or, if we do bother to think about them, we think about how lousy they are compared to our clearly superior and awesome choice”, says Heidi Grant Halvorson.
The idea of creating optionality without any obligations can backfire in surprising ways in life and career.
Acquiring safety net upon safety net can lead to hesitation, procrastination, and indecision. When a temporary destination becomes an end in itself, you stop growing, learning and improving.
Many people consistently hedge their bets not only in their careers, but in business, and relationships.
“…optionality isn’t restricted to the professional domain alone — it is also applied in areas like love (avoiding an emotional commitment because there may be someone better out there), friendship (having superficial equations with lots of people for fear of losing out socially), and hobbies (refusing to throw yourself wholeheartedly into something because that would require saying no to other possibilities),” writes Vivek Gambhir, a Whole Time Director.
Millions of people postpone their dreams and undertake choices that they think will enable their dreams but end up in soul-crushing environments.
If your dreams are apparent to you, pursue them. Creating optionality can be a dangerous diversion that will keep you from taking an important leap in life.
Quoting Neil Soni again: “The optionality trap is something that ensnares us, not through outside forces, but through our own risk aversion and indecisiveness.”
Optionality is a means, not an end.
Holding on can do more harm than good.
Never messing up might make you feel “safe”, but it also keeps you from course-correcting and leading a richer, more authentic life.
Andy Dunn explains:
“The risk is not in doing something that feels risky. The risk is in not doing something that feels risky. Very little is obvious in the research on human decision-making and happiness. Very few things are proven. One thing that is proven is this: the only regrets octogenarians have are for the risks not taken.
Here’s why: If the risk taken does pan out, it is good. But if it doesn’t — and here’s the key thing — we find a way to justify the risk taken as learning.”
Taking steps, learning, relearning, and taking more steps is the only way to grow and make progress.
When you choose a path, things start to happen. You make progress, real progress. You cannot predict an outcome in advance, but taking a calculated step is the only way to move forward.
“If you can’t decide what to do, get on the road. You won’t find the answer. It will find you,” says Dunn.
Never miss an opportunity to advance your life or career in the direction of your dreams. It’s good to create options and explore possibilities — but not when it becomes a way of life rather than a means for achieving your goals.
This post was previously published on Mind Cafe and is republished here with permission from the author.
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Photo credit: Yukai Du