Maximization vs. Optimization

by Jean-Eric Plamondon | 3 Aug, 2024 | Scalable Business Model

The short answer: Maximization means pushing for growth and market share and accepting some mess to get there. Optimization means refining what you already have to get more from less. Early on, maximize; to keep growing and scaling, alternate between periods of maximization and optimization. Maximization gives you traction; optimization gives you velocity.

Every business owner, at some stage, grapples with this choice:

• Should I pour resources into creating explosive growth and capturing more market share in the short term?
• Or should I refine existing processes to be more efficient and consistent (and risk losing market share)?

The former is what we call maximization; the latter, optimization.

Both approaches have their place and their appeal, but understanding the core of each can mean the difference between fleeting success and lasting impact.

Let’s dive deeper into these concepts to help you make an informed decision.

Maximization is about pushing the boundaries.

It’s the pursuit of the highest possible performance or result.

When a business maximizes, it focuses on achieving a specific aim – typically growth – and places a lower priority on being efficient with costs.

Maximization is akin to “punching above your weight class” and trying to land the biggest account or contract you’ve ever landed.

Often the motivation is to justify the overhead and infrastructure the business may have just invested in – or wants to invest in – like new employees, a larger office space, or a new and expensive machine that isn’t being used enough to justify its costs.

This focus on growth often comes at the expense of other aspects of the business.

Optimization is about efficiency.

Think of it as the art of getting more from less.

When a business optimizes, it aims to make the best possible use of its current resources.

That means minimizing waste, improving efficiency, and reducing costs – while still delivering quality.

Often the motivation is to reduce cashflow burn, tame the feeling of chaos in the business, or to lessen the amount of energy required to keep things going at the pace that was set during a maximization phase (which can feel a bit like running an engine at the red line.)

I often describe the difference like this: “Maximization makes a mess. Optimization cleans it up.”

When would you go for one over the other?

It depends on the stage and priorities of your business.

Choosing Between Maximization and Optimization

A good way to understand maximization and optimization is to think of it like your car’s transmission.

To get up to speed, you use the lower gears – which provide power to get you rolling. You could maximize first gear by giving it more gas, but you’ll quickly hit a limit for how fast you can go – and if you pursue this driving strategy, you certainly burn more fuel and even risk blowing your engine.

Or you could optimize by shifting into higher and more efficient gears. Optimization uses (and relies on) the momentum you’ve built through maximization.

This combined strategy gives you both speed and fuel efficiency – as long as the road conditions support it. If, for example, you encounter a steep grade, you’ll need to shift down.

Choosing between maximization and optimization is like skillfully navigating through your car’s gears, choosing the right one for the terrain and the moment.

It’s the same concept in business.

Maximization gives you traction. Optimization gives you velocity.

Early-stage businesses and new innovations call for maximization.

When you’re trying to break into a market or introduce a new product, maximization might be the better option. You’re looking to make an impact, gain traction, and grab attention.

For example, in their initial phases, many tech companies focus on user acquisition.

They might burn cash, offer free services, and spend aggressively on marketing, aiming for maximum growth.

Sometimes business owners contact me to build systems for them when they are too early in their journey. Their problems are caused by a lack of sales, not a lack of process.

In these cases, my advice is to not worry about optimization yet – simply do what you must do to bring in sales. You need to put it into low gear and get rolling!

Scaling and long-term growth require periodic optimization.

As businesses mature, optimization is required. Once you have sales flowing in, it’s time to streamline processes, make every dollar count, and ensure stability without compromising on the “special-sauce” that generated all of the momentum.

Going back to our tech company example – as they stabilize, the emphasis shifts to optimizing revenue streams, refining their business model, and achieving profitability.

Long-term growth requires consistency, predictability, and sustainability.

Many owners hold onto maximization strategies for too long. They become accustomed to (or even enjoy) the constant fire-fighting and problem-solving that maximization creates – to the point where they believe that “this is just how business is and more of this means I’ll get to where I want to go.”

These owners are essentially pushing their businesses past the redline – causing damage, draining resources (including their people), and risking failure – completely unaware of the potential they could reach if they simply shifted gears.

Ultimately, if you want to continue to grow and scale your business to new levels, you need to alternate between periods of maximization and optimization.

Putting full power into maximizing to reach the next plateau, then levelling off and optimizing systems to increase capacity – then powering up again.

The interesting part is that when we dial in the optimization, it’s still a climb. It’s just not as steep of a climb. To the point where it sometimes feels like you’re standing still, but you’re actually still climbing because you’re getting more for less effort.

One of my clients summed this up perfectly when he told me, “Wow. We just had our biggest month ever. But I thought it was slow!” That’s what I call the best kind of growth!

If you’d like similar results in your business, hit us up for a consultation call.

Common questions

When should a new business maximize rather than optimize?

Early on, your problem is usually a lack of sales, not a lack of process. Do what you must to bring revenue in first. Building systems before you have sales is optimizing an engine that isn’t moving yet.

How do I know it’s time to shift to optimization?

When the fire-fighting stops feeling temporary. If constant problem-solving has become normal, you’re running past the redline, burning fuel and people to hold a speed a higher gear would carry more easily.

How do maximization and optimization work together?

Think of a car’s transmission: the lower gears give you the power to get rolling, and optimization uses the momentum built through maximization as you shift into higher, more efficient gears. In business, that means putting full power into maximizing to reach the next plateau, then levelling off and optimizing systems to increase capacity, then powering up again.

What happens if you maximize for too long?

Many owners hold onto maximization strategies for too long and become accustomed to the constant fire-fighting. They end up pushing their businesses past the redline, causing damage, draining resources (including their people) and risking failure, unaware of the potential they could reach if they simply shifted gears.