The Tyranny of Optionality

Hello everyone,

Upon celebrating my 3-year anniversary on the forum, I realized the prominent number of discussions involving optionality (aka exit opportunities), from the choice of undergrad, to internships, to the first permanent contract.

I started to research the subject and found two interesting articles I want to share with you.

The first article, "The Trouble with Optionality" by Mihir A. Desai (HBS Finance Professor) discusses the risks of overvaluing optionality - keeping choices open at the expense of commitment and true passion. Desai argues that an overemphasis on keeping options open can lead to a 'safety net mentality', potentially hindering true ambition and risk-taking. This perspective is contrasted with the pursuit of 'alpha' in finance, where hard work and dedication to core beliefs are seen as paths to success. 

"The Yale undergraduate goes to work at McKinsey for two years, then comes to Harvard Business School, then graduates and goes to work Goldman Sachs and leaves after several years to work at Blackstone. Optionality abounds! This individual has merely acquired stamps of approval and has acquired safety net upon safety net. These safety nets don’t end up enabling big risk-taking—individuals just become habitual acquirers of safety nets." 

The second article, "The Tyranny of Optionality" by Rowan Kunz, echoes similar sentiments. It argues that pursuing careers with high optionality, like consulting or investment banking, can lead to decision paralysis, lower satisfaction, and a cap on potential upside. Kunz emphasizes that while having options seems strategic, it often results in deferring decisions and a continuous chase for more options​​.

Simply settling on ‘consulting’ because it will give you options is the lazy choice. Not only does it not necessarily answer the question for you (as it can lead to the ongoing deferral of decision making and self-deception about what we want) it also places the onus on ‘consulting’ or ‘investment banking’ as the solution to getting exposure to different opportunities to find your career clarity. This often results in you not taking the responsibility yourself to do the hard work, soul searching and experimentation required to really find your ideal match quality, which is the degree of fit between your abilities, interests and the work you do, which is the key determinant of your level of fulfilment and performance.

Are we too focused on maintaining optionality in our careers at the expense of not committing to a specific path? Does this approach hinder our potential for success and fulfillment?

I realize that many of us are doing this for the money, but many other career paths, certainly riskier ones, would probably be more rewarding.

I'm interested in your perspectives on this.