Quit

Persistence is not always the best decision, certainly not absent context. And context changes.

That’s the funny thing about grit. 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. The trick is in figuring out the difference.

By definition, anybody who has succeeded at something has stuck with it. That’s a statement of fact, always true in hindsight. But that doesn’t mean that the inverse is true, that if you stick to something, you will succeed at it.

Success does not lie in sticking to things. It lies in picking the right thing to stick to and quitting the rest.

quit should be done long before you are facing the quitting decision. It recognizes, as Daniel Kahneman has pointed out, that the worst time to make a decision is when you’re “in it.”

That’s why, if I had to skill somebody up to get them to be a better decision-maker, quitting is the primary skill I would choose, because the option to quit is what allows you to react to that changing landscape.

Quitting is the tool that allows you to make that different decision when you learn that new information. It gives you the ability to react to the way the world has changed, your state of knowledge has changed, or how you have changed. This is why it’s so important to skill up on quitting, because having the option to quit is what will keep you from being paralyzed by uncertainty or being stuck forever in every decision you make.

When you are weighing whether to quit something or stick with it, you can’t know for sure whether you can succeed at what you’re doing because that’s probabilistic. But there is a crucial difference between the two choices. Only one choice—the choice to persevere—lets you eventually find out the answer. The desire for certainty is the siren song calling us to persevere, because perseverance is the only path to knowing for sure how things will turn out if you stay the course. If you choose to quit, you will always be left to wonder, “What if?” Just as the Sirens of mythology lured sailors toward their song, we are lured to persevering because we want to know. It’s the only way to avoid those “what ifs.” The problem, of course, is that sometimes, the siren song lures you toward a rocky shoal that breaks your ship apart. Or it leads you to your death at the top of Everest. In fact, the only time you can be sure you should quit is when it’s no longer a decision, when you’re at the edge of the abyss or you’ve already stumbled into it. Then you have no choice but to abandon course.

As the world changes, we should be quitting stuff that isn’t working or is no longer what people want or what we want. We should be surveying the landscape, both to understand when that may happen as well as to find something better we can turn our attention to.

If you quit on time, it’s not going to seem like anything particularly dire is happening at that particular moment. That’s because quitting is a problem of being able to glimpse at the range of ways the future might play out and see that the likelihood that things will turn out poorly is too high to make it worth your while to continue. At the moment that quitting becomes the objectively best choice, in practice things generally won’t look particularly grim, even though the present does contain clues that can help you figure out how the future might unfold. The problem is, perhaps because of our aversion to quitting, we tend to rationalize away the clues contained in the present that would allow us to see how bad things really are.

There is a well-known heuristic in management consulting that the right time to fire someone is the first time it crosses your mind. This heuristic is meant to get businesses to the decision sooner, because most managers are reluctant to terminate personnel, hanging on to them too long.

We are reluctant to walk away when we should because we have the feeling that doing so will slow our progress or stop it altogether. But it is the reverse that is actually true. If you stick to a path that is no longer worth pursuing, whether it’s a relationship that isn’t going well, or a stock that you’re invested in that’s losing money, or an employee that you’ve hired who isn’t performing, that is when you lose ground. By not quitting, you are missing out on the opportunity to switch to something that will create more progress toward your goals. Anytime you stay mired in a losing endeavor, that is when you are slowing your progress. Anytime you stick to something when there are better opportunities out there, that is when you are slowing your progress.

“Imagine it’s a year from now and you stayed in the job that you’re currently at—what’s the probability you’re going to be unhappy at the end of that year?” She said, “I know I’m going to be unhappy, one hundred percent.” I followed up by asking, “If it’s a year from now and you switched to this new job you’re considering, what’s the probability you’re going to be unhappy?” She said, “Well, I’m not sure.” “Is it one hundred percent?” She said, “Definitely not.” At that moment, she realized, “Oh, wait a minute. I’m always going to be unhappy if I stay. If I switch, sometimes I’ll be unhappy, but sometimes I won’t. Sometimes, I’m going to find real fulfillment in the job that I’m switching to, and that has to be better.”

When you are making a decision about whether to quit, you need to listen to those people from the past who are giving you important advice. Sometimes, the person sending you a message is someone who has traveled a similar path before you. And sometimes, the person traveling from the past is an earlier version of yourself.

If you feel like you’ve got a close call between quitting and persevering, it’s likely that quitting is the better choice.

Quitting on time usually feels like quitting too early. The hardest time to make a quitting decision is when you’re in it. Our intuition is that quitting will slow down our progress. The reverse is actually true. If you walk away from something that is no longer worthwhile, that frees you up to switch to something that is more likely to help you achieve your goals—and you’ll get there faster. When the time is objectively right to quit, nothing particularly dire will be happening right at that moment. Getting the timing right means looking into the future and seeing that the chances things will go your way are too slim. Thinking in expected value helps you figure out if the path you are on is worth sticking to. EV is not just about money. It can be measured in health, well-being, happiness, time, self-fulfillment, satisfaction in relationships, or anything else that affects you. If you feel like the choice between persevering and walking away is a close call, it’s likely that quitting is the better choice. In hindsight, we can see when someone has waited too long to quit, and we tend to be harsh in our judgment of those people. But when someone quits before it seems obvious to others, we mock them for quitting too early. That’s the quitting bind.

When we are coming to a decision fresh, having not yet incurred any losses or gains, loss aversion creates a preference for options associated with a lower chance of incurring a loss. It makes us risk averse and stops us from getting started, from choosing options where we might lose. But when we have already accrued losses on paper, we become risk seekers. Daniel Kahneman subsequently characterized this as sure-loss aversion.

Our goal, obviously, should be to persist when we have a positive expected value, regardless of whether we have already won or lost to a prior course of action. Because these decisions are made under uncertainty, we rarely know for sure whether sticking or quitting is the best choice. In the same way that it’s easier for the cab drivers to see if they’ve met a daily goal, it’s easier for any of us to see whether we’re ahead or behind so we use that signal to determine whether or not to persevere.

A key finding of prospect theory is loss aversion, the phenomenon whereby the emotional impact of a loss is greater than the corresponding impact of an equivalent gain. Loss aversion creates a preference for options associated with a lower chance of incurring a loss. It makes us risk averse. When we are in the gains, we have a tendency to quit too early in order to avoid the risk of giving those gains back. In other words, we like to quit while we’re ahead. When we are in the losses, we become risk seekers. We want to keep going, hoping we can avoid ever having to realize the loss. Daniel Kahneman has characterized this as sure-loss aversion. In other words, we like to stick when we’re behind. Quitting on time usually feels like quitting too early, and the usually part is specifically when you’re in the losses. Retail investors show this pattern of quitting when they’re ahead and sticking when they’re behind. Even expert investors don’t get their quitting decisions just right. They outperform on their buying decisions but underperform on their selling decisions. We naturally track and get feedback on the things we are doing. But once we quit something, we also quit keeping track of that course of action. This creates a problem with getting high-quality feedback, which in turn makes it hard to hone our quitting skills.

There are all sorts of ways we get stuck in our decisions. Presented with the opportunity and the relevant information, we will over-persist, rejecting the chance to quit and backing up our original decision by spending even more resources to try to save the endeavor.

When we are in the losses, we are not only more likely to stick to a losing course of action, but also to double down. This tendency is called escalation of commitment. Escalation of commitment is robust and universal, occurring in individuals, organizations, and governmental entities. All of us tend to get stuck in courses of action once started, especially in the face of bad news. Escalation of commitment doesn’t just occur in high-stakes situations. It also happens when the stakes are low, demonstrating the pervasiveness of the error.

Like the katamari, rolling around collecting debris, which makes it grow in mass and collect more and even bigger debris, there is a self-reinforcing aspect to the sunk cost fallacy that we really need to watch out for. When we embark on an endeavor, we also accumulate debris—the time, money, and effort we have spent. As we accumulate costs, the mass grows, escalating our commitment and making it more and more difficult to quit. That decision to persevere then makes us accumulate more costs, which then makes us even more likely to continue the next time we consider quitting. And that keeps adding weight to the scale in favor of persevering. The whole thing snowballs.

What really matters is maximizing your expected value across all the things you start, across all of your mental accounts. If you’re investing in a number of stocks, some are going to win and some are going to lose. What matters is whether you’re winning across your whole portfolio not whether any one investment is up or down. But that’s not how we naturally think. We don’t think about the whole portfolio of stocks we own. Each is associated with its own mental account that we don’t want to close out unless we are in the gains. What’s true for one stock or one hand of poker is just as true for an individual decision or a project, or climbing a mountain, or opening a discount store in a converted chicken coop. When we start any of these things, we open a mental account. When things start going poorly, we don’t want to quit because we don’t like to close accounts in the losses.

But the reality is that when it comes to decisions about whether to continue or withdraw, what matters is whether the next life is worth putting at risk, as much as we instinctively want to take into account the lives already lost. If we continue, are our chances of getting the outcome we want worth risking additional lives and imposing those losses on other families?

The sunk cost effect is a cognitive illusion where people take into account resources they have previously sunk into an endeavor when making decisions about whether to continue and spend more. The sunk cost effect causes people to stick in situations that they ought to be quitting. When deciding whether to stick or quit, we are worried that if we walk away, we will have wasted the resources we have spent in the trying. You might be experiencing the sunk cost fallacy if you hear yourself thinking “If I don’t make this work I will have wasted years of my life!” or “We can’t fire her now, she’s been here for decades!” Sunk costs snowball, like a katamari. The resources you have already spent make it less likely you will quit, which makes it more likely you will accumulate additional sunk costs, which makes it again less likely you will quit, and so on. The growing debris of your prior commitment makes it increasingly harder to walk away. We don’t like to close mental accounts in the losses. Knowing about the sunk cost effect doesn’t keep you from falling prey to it. You can’t trick yourself into not taking sunk costs into account by trying to view the situation as a new choice. Asking whether or not you would continue if the decision were a fresh one doesn’t mitigate the sunk cost effect the way you might intuitively think it would.

Astro Teller clearly understands that quitting gets you where you want to go faster. The sooner you figure out that you should walk away, the sooner you can switch to something better. And the sooner that happens, the more resources you’re saving, which you can then devote to more fruitful endeavors.

One of Teller’s valuable insights is that pedestal-building creates the illusion of progress rather than actual progress itself. When you are doing something that you already know you can accomplish, you’re not learning anything important about whether the endeavor is worth pursuing. You already know you can build the pedestal. The problem is whether you can train the monkey. On top of that, Teller realizes that when you’re building pedestals, you are also accumulating sunk costs that make it hard to quit even as you find out that you may not be able to train the monkey to juggle those torches. By focusing on the monkey first, you naturally reduce the debris you accumulate solving for something that’s, in reality, already solved.

Astro Teller also understands a subtler but no less important point, that 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. We prefer that illusion of progress to having to quit and admit defeat.

Figure out the hard thing first. Try to solve that as quickly as possible. Beware of false progress.

If we can identify in advance what the signals are that we should pay attention to and make a plan for how we will react to them, we can increase the chances that we’ll cut our losses when we ought to. Essentially, when you enter into an endeavor, you want to imagine what you could find out that would tell you it’s no longer worth pursuing. Ask yourself, “What are the signs that, if I see them in the future, will cause me to exit the road I’m on? What could I learn about the state of the world or the state of myself that would change my commitment to this decision?” That list offers you a set of kill criteria, literally criteria for killing a project or changing your mind or cutting your losses. It’s one of the best tools for helping you figure out when to quit closer to on time. Kill criteria could consist of information you learn that tells you the monkey isn’t trainable or that you’re not sufficiently likely to reach your goal, or signs that luck has gone against you.

In general, this 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 help develop high-quality kill criteria.

The importance of thinking about states and dates in setting kill criteria in advance has been developed and tested in situations with the highest possible stakes, affecting large numbers of people and gigantic, world-changing decisions. But the concepts are broadly applicable to your personal decisions, where you are trying to spend your resources on things that matter and avoid pedestal-building when you ought to be quitting.

mental model and kill criteria help us overcome our aversion to closing accounts in the losses. First, they both get you to no faster, which naturally limits the losses that you have to absorb when you quit. And the less you are down, the easier it is to walk away. Second, when you set out clear kill criteria in advance and make a precommitment to walk away when you see those signals, you are just more likely to follow through, even when you are losing. Anytime you can make a decision about cutting your losses in advance, you’ll do better at closing those mental accounts.

Monkeys and pedestals is a mental model that helps you quit sooner. Pedestals are the part of the problem you know you can already solve, like designing the perfect business card or logo. The hardest thing is training the monkey. When faced with a complex, ambitious goal, (a) identify the hard thing first; (b) try to solve for that as quickly as possible; and (c) beware of false progress. Building pedestals creates the illusion that you are making progress toward your goal, but doing the easy stuff is a waste of time if the hard stuff is actually impossible. Tackling the monkey first gets you to no faster, limiting the time, effort, and money you sink into a project, making it easier to walk away. When we butt up against a hard problem we can’t solve, we have a tendency to turn to pedestal-building rather than choosing to quit. Advance planning and precommitment contracts increase the chances you will quit sooner. When you enter into a course of action, create a set of kill criteria. This is a list of signals you might see in the future that would tell you it’s time to quit. Kill criteria will help inoculate you against bad decision-making when you’re “in it” by limiting the number of decisions you’ll have to make once you’re already in the gains or in the losses. In organizations, kill criteria allow people a different way to get rewarded beyond dogged and blind pursuit of a project until the bitter end. A common, simple way to develop kill criteria is with “states and dates:” “If by (date), I have/haven’t (reached a particular state), I’ll quit.”

In large part, we are what we do, and our identity is closely connected with whatever we’re focused on, including our careers, relationships, projects, and hobbies. When we quit any of those things, we have to deal with the prospect of quitting part of our identity. And that is painful.

He described the endowment effect as “the fact that people often demand more to give up an object than they would be willing to pay to acquire it.”