19.08.2022

FOBO in business and ways out

seven closed doors

Which is the best option?

What decision shall we take in order to reach our goal best?

In today’s world there is usually an abundance of different alternatives available – this might be a case of FOBO.

[In der Blog-Übersicht wird hier ein Weiterlesen-Link angezeigt]


FOBO stands for Fear of Better Options and is the inability to decide between different options when all of them are decent. On a personal level it is an emotional experience including one or several of these elements:

  • stress coming from the desire to include as many options as possible in the decision process,
  • fear that that the goal cannot be reached, 
  • frustration during the decision process or as a consequence,
  • regret when a decision is taken (fear that a better option would have been possible to choose),
  • indecision in case of no action taken.


FOBO in business

The Fear of Better Options can distort decision making processes also in business massively.

Imagine you are recruiting for an important position in your team. You shortlisted the most promising five candidates after having had decent interviews. They meet your defined requirements largely but not perfectly. 

What to do?

You draft the contract for your number one on your shortlist – a promising lady coming from a different industry. But you do not send the proposal to her. 

Another application came in which looks like the perfect fit and you hear from two colleagues that they know a person each whom they recommend for your team. So you decide to test these additional options, they could be a better fit.

One week later: the interview with the promising new applicant was a disaster, the recommended persons showed no interest.

Unfortunately, the promising lady from your shortlist is not available anymore, the other candidates also lost interest as they did not hear back from you for weeks.

Back to square one, the search starts again...

 

There are multiple goals and interests in business life to consider. We were often socialised to maximise results, to go for the best option. This can make extremely anxious, and the number of options tends to have increased as well. The internet and the mass introduction of sophisticated technology has accelerated the availability of information.

This might overwhelm us with choice and lead to overthinking – also in business.

The desire to maximise the outcome of a decision makes FOBO extremely relevant. The usual incompleteness of information in combination with additional (and potentially unknown) options stresses.

Consequently, decisions might not be taken in time – instead of realising the best option to reach a goal, the objective is totally missed. Instead of the best option, no option is chosen, or the decision happens too late – with costly effects!

This is not only relevant like in the recruiting example before – think about investment decisions, strategy creation, project management, etc.

The Fear of Better Options is highly relevant in today’s business world!


The background of FOBO

In order to consider ways to mitigate the effect of FOBO, let’s first investigate the background and conditions of it.

The background of the phenomenon, similar to other patterns and unconscious biases, lies in our past. In the course of evolution, the main target has been survival of the species. Maximisation decisions had a direct impact on the chance of survival. Consider the choice on where to spend your limited amount of energy for gathering food in an hostile environment. Waiting for a better option often made sense.

In today’s world, this pattern can actually harm our well-being and effectiveness – what are conditions for the Fear of Better Options?

  1. In order to experience FOBO, there must be an observation of some socially-desired alternative – this can be an information, an experience or an action.
  2. FOBO is quite independent on culture, social groups or personality type.
  3. The number of available alternatives increases the likelihood of FOBO (also in case they are only hypothetical or imagined).
  4. If there is a low satisfaction in the subject (e.g. the current solution to an issue), FOBO is more likely.
  5. In case there is a chance to expand time for the decision (e.g. there is no deadline for it), it is easier to looks for other options which can enforce FOBO.

 

Another important factor to consider is the decision space in the concrete situation. Our perception might tell us that the available number of options is stable whereas the real dynamics might be much more volatile. This is a significant consequence for the point in time where the decision process should be closed (which is usually earlier than perceived).

The tendency to over-analyse both the context as well as options might also significantly impact the decision context, in particular with a “maximiser” culture as valuable time might be lost.


How to mitigate the Fear of Better Options?

The Fear of Better Options is a social anxiety impacting behaviour. It is amplified when a “maximising culture” is in place – the ambition to reach the highest possible result through rational decision-making.

If we connect the phenomenon of FOBO to the addressed points, we came to a couple of recommendations on how to reduce its effect in business (of course usable in private situations as well):

  • accept the fact that FOBO exists and that it will show during decision processes,
  • define a clear timeline for decision making and stick to it,
  • acknowledge that information in today’s business world is incomplete and some options will simply miss > focus on those elements which have the highest relevance to the decision in place (the Pareto principle is good to remember here),
  • consider that more does not necessarily mean better – this also goes for options,
  • create a solid decision process which can enhance the likelihood for success for the organisation in general (read more about ways to increase decision quality), and develop clear criteria for options to end up at the shortlist,
  • limit information sources based on a quality assessment – in particular social media channels produce a lot of “noise” and can create the illusion of additional options which are not really worth considering,
  • ensure commitment to take a decision instead of postponing – this goes hand in hand with an organisational culture to have decision making at the core of activities.

 

A certain amount of FOBO is both rational and useful as the choice for the first available option might not be the best. It is important to realise that after a certain point more options actually do not raise the chances to realise a goal but endanger reaching it.


Taking a decision consciously is usually better than doing nothing, and there will be possibilities to calibrate outcomes that turn out less desirable than planned.

When you do not decide, you even do not get started.




Further material on the subject

 

 

 

 

FOBO and FOMO

The term FOBO was coined by Patrick McGinnis, who introduced  it together with the well-known term “FOMO” (Fear of Missing Out) in a 2004 article for the Harvard Business School newspaper. 

He was of the opinion that although people think that the number of options they have will only grows and will be almost endless, life isn’t that much predictable. Humanity also experiences economic crises, epidemics, and wars, which obviously limits the options in many ways.