The Power of Knowing When to Walk Away
0593422996
Annie Duke
Notes
While grit can get you to stick to hard things that are worthwhile, grit can also get you to stick to hard things that are no longer worthwhile.
…whether it is on the level of an individual, an organization, or a governmental entity, when we’re getting bad news, when we are getting strong signals that we’re losing – signals that others plainly see – we don’t refuse to quit. We will double and triple down, making additional decisions to commit more time and money (and other resources) toward a losing cause, and we will strengthen our belief that we are on the right path.
The bottleneck, the hard thing, is training a monkey to juggle flaming torches. The point of this mental model (monkeys and pedestals) is to remind you that there is no point in building the pedestal if you can’t train the monkey. In other words, you ought to tackle the hardest part of the problem first… we have a tendency, when we butt up against a monkey that is proving difficult to solve, to turn our attention to building pedestals rather than giving up.
In general, his idea of casting yourself into the future, imagining a failure, and then looking back to try to figure out why is called a premortem. Using a premortem is a great tool to develop high quality kill criteria.
The Endowment Effect is particularly strong if the thing you own you also built. This is known as the IKEA effect, for obvious reasons. Most furniture you buy from IKEA, you have to put together yourself. We’ll value the nightstand that we built much more than an identical one that was preassembled.
We’re more wary of “causing” a bad outcome by acting than “letting it happen” through inaction. This phenomenon is known as Omission-Comission bias.
When it comes to quitting, the most painful thing to quit is who you are…this desire to maintain internal consistency, as we’ve already seen stops us from quitting. As does the worry that other people are going to judge us as harshly as we judge ourselves.
Ron Conway’s approach to being a quitting coach
- Let them know that you think they should consider quitting.
- When they push back, retreat and agree with them that they can turn the situation around.
- Set very clear definitions around what success is going to look like in the near future and memorialize them down as kill criteria.
- Agree to revisit the conversation and, if the benchmarks for success haven’t been met, you’ll have a serious discussion about quitting.
…Explore-Exploit problem – How much time you spend exploring the landscape for new opportunities and how much of your time should you spend exploiting things that are already positive expected value…They learned the lesson that the ants have down pat: Don’t wait to be forced to quit to start exploring alternatives.
We need to start thinking about waste as a forward-looking problem, not a backward-looking one. That means realizing that spending another minute or another dollar or another bit of effort on something that is no longer worthwhile is the real waste.
- Expected Value
- Cognitive Dissonance
- Loss Aversion
- Endowment Effect
- Katamari
- Entrapment
- Explore-Exploit problem
- Kill Criteria
- IKEA effect
- Premortem
- Prospect Theory
- Status-quo Bias
- Sunk Cost Effect
- Escalation of Commitment
- Rational actor Theory
- Monkeys and Pedestals
- Sure-loss Aversion