The Paradox of Option Value

When I was in college, the management consulting recruiting pitch leaned into option value. As a consultant, you’ll work on a wide variety of problems in disparate industries. You’ll become a flexible, capable generalist, and this skillset will keep doors open for the future. In fact, recruiters and consulting staff will happily rattle off the exciting and impressive work destinations of the firm alums.1 The span of these subsequent positions illustrates the option value a consulting stint could buy a fresh college graduate. Additionally, the emphasis on what you might do next firmly establishes option value as a distinguishing feature of the position.

I was excited by a future abounding in choice, and I was simultaneously terrified of the choice I faced in the moment. When faced with that tree chock full of fleetingly ripe figs, why content yourself with just one? Why not rebel against this lamentable scarcity and demand for yourself a figgy abundance?2 I chose to maintain an ability to do anything next. Or, at least a lot of things.

Option value comes in many flavors. Here, I’ll focus narrowly on next options, rather than more extended chains of career moves. In my experience, I fixated far too strongly on this more immediate form of option value. In what follows, I’ll use the generic “option value” term to refer to this specific form of option value.

To maximize option value, you curate an expansive set of possible career moves, and these career moves should be exciting/interesting/prestigious, or whatever features you care about.

To operationalize this approach, you need to do a fair bit of exploration of possible career paths. Management consulting is great for that. You can work in consumer packaged goods one month, trucking the next, and then public health.3

However, this breadth is achieved at the expense of depth. By necessity, the exploration is shallow, not deep. To its credit, shallow exploration is non-destructive. It will not destroy any options. It might even add to your set of options. You’ll maintain the ability to do many things next.

Deep exploration, on the other hand, is inherently destructive. The problems you solve in your work will shape your thinking and abilities, and specialization can preclude career paths that may have been available to you when you were a bit more malleable. So, deep exploration will destroy many options relative to shallow exploration. However, deep exploration also unlocks options unavailable to you if your exploration is shallow. The net decrease in options under deep exploration hides the newfound opportunity to find uniquely interesting work that requires distinct, focused experience. If you have an extensive inflow of options, you’ll get the chance to see many more options in your lifetime, even if these inflows are more than offset by outflows.

In sum, we face a paradox of option value: if you adopt a strategy of shallow exploration and maximizing (short-run) option value, you’ll indeed find yourself with more options at any given time. However, you’ll miss out on those precious opportunities with a unique confluence between the world’s needs and your distinct capabilities and experience.4 These opportunities require you to have explored a problem in depth.5 Accordingly, you expand your choice set in the short-run, but you shrink it over the course of a career.

I think a desire for security is implicit in the pursuit of options. These options can be a hedging strategy: with many options, you can limit the variance in the quality of your next career step. I think this is a reasonable and well-founded motive for many. However, I suspect that many people make the mistake of overvaluing security, especially early in their careers.6

While job security concerns seem to me a reasonable objection, I am much less amenable to career capital objections. As you accumulate career capital, you should improve your ability to conduct your current work. It is reasonable to pursue career capital that will be transferable to new work. Indeed, you should be doing exactly this. However, I believe option-value-maximization focuses not on improving your ability to do your work, but rather on making your current set of skills more transferrable to new contexts. You can do this within reason, but I do not endorse it as a primary objective.

When I graduated from college, I fell under the tyranny option value. While option value is healthy and valuable to an extent, if unduly preferenced it will be achieved at the expense of specialization. I regret the degree to which I let it rule my career choices. I kept my exploration shallow. I attempted to maintain the ability to do anything, before I realized I might end up doing nothing.

Narrow paths beget more narrow paths. At any given point, a self-inflicted narrowing of choice can be intimidating, especially when option-preserving choices abound. However, we might also call these narrow paths interesting. Then, interesting careers beget interesting careers. An effort to maintain a broad—but not deep—set of available career pivots at any given time can limit the evolution of your lifetime set of career options. Maintaining options now might destroy them later.

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