The Art of Manliness - When to Quit

00:00:00.000 brett mckay here and welcome to another edition of the art of manliness podcast

00:00:10.560 don't be a quitter quitters never win and winners never quit these maxims encapsulate

00:00:16.000 our usual attitude towards quitting which deceit is a bad thing a weakness character defect we

00:00:21.460 celebrate those who stick with things we have grit but my guests would say that quit and grit

00:00:25.760 are just two sides of the same coin and that quitting is a valuable skill to learn and get

00:00:29.920 good at her name is annie duke and she's a former professional poker player speaker consultant and

00:00:34.880 an author in her latest book quit the power of knowing when to walk away she seeks to rehabilitate

00:00:40.220 quitting by showing how whether it's in the context of ending a relationship leaving a job or climbing

00:00:44.960 a mountain it has essential benefits we discuss those benefits in today's show as well as how to

00:00:49.860 know when to quit we unpack how whether you should stick with something comes down to an equation of

00:00:53.860 its positive expected value how setting goals too rigidly can get in the way of being able to assess

00:00:58.560 that value and the cognitive biases that keep you from quitting when you should we enter conversation

00:01:03.240 with two strategies for overcoming these biases including establishing kill criteria to give yourself

00:01:07.780 a timetable for how long to go after a name after the show's over check out our show notes at awim.is

00:01:13.200 all right annie duke welcome back to the show well thank you for having me back i think this is my third

00:01:36.380 time this is your third time on the show and i've really enjoyed our previous conversations and your

00:01:41.060 episodes have been big hits with our audience and i'm sure there's going to be another good one

00:01:45.020 you got a new book out it's all about quitting and this is something you probably thought a lot about

00:01:50.440 as a professional poker player uh you know thinking about when to fold them right but quitting is

00:01:56.660 something that most people don't like to think about like to celebrate they don't feel good about it

00:02:02.500 instead we like to talk about grit right we like we like the stories of people who persevered

00:02:07.580 but something you start off the book with is saying that grit needs to be in conversation with quit

00:02:14.080 and that they're two sides of the same coin so let's start off things there tell us more about

00:02:19.580 this idea of grit and quit yeah so so i think that we think about you know grit and quit as opposing

00:02:27.180 forces right and in that battle of the binary you know grit has clearly won the day we think about

00:02:34.920 grit as a virtue and quit as a vice i mean just simply put like brett if if someone called you

00:02:40.840 a quitter would you take it as a compliment no i wouldn't no no i mean they're clearly trying to

00:02:45.640 insult you so you know we really sort of think about perseverance is synonymous with heroism or

00:02:52.620 building character you know it's character building but the issue with thinking about those as

00:02:58.320 opposing forces is that as you said they're actually the exact same decision so at any time that i've

00:03:05.620 started something i have the choice to either continue or to walk away so if i choose to continue if i

00:03:13.020 choose to persevere i'm by definition choosing not to quit and if i choose to quit i'm by definition

00:03:19.200 choosing you know not to stick and so as we face that decision the factors that go into whether

00:03:26.280 we stick or quit are the same because it really is the same decision but we don't think about it that

00:03:31.300 way and what that means is that it's really absurd for us to have created this binary where like one is 0.98

00:03:38.400 good and one is bad when something is the same decision and it's about the context because it's

00:03:44.380 really easy for me to give you example after example after example where it's incredibly obvious that

00:03:51.220 someone should quit and if they were to persevere in these circumstances that that would be folly

00:03:56.880 that that would actually be a bad thing a like super simple example is if you're on a road where

00:04:04.900 there's a huge accident and there's an exit right in front of you and you could take that exit and get

00:04:10.280 on another road that's going to get you to your destination it would be silly to stay on the road where

00:04:13.860 there's an accident and the traffic isn't moving so that's like a silly little example but there's all

00:04:20.700 sorts of big big examples of that type of decision where you can very clearly see that quitting has

00:04:28.140 to be the better choice as an example if you're on the top of everest and a snowstorm is rolling in

00:04:36.320 is you're you know attempting the summit and we've all read those kinds of stories don't we think that it

00:04:43.660 would be silly to continue up in those circumstances because you're almost definitely going to die

00:04:48.740 right like you should obviously turn around in that situation so as i thought about that and i

00:04:54.420 realized well look quitting is a skill that we ought to develop and get good at because it does depend

00:05:02.120 on context and it is actually just the other side of the coin of grit and we need to get good at both

00:05:09.100 of those in parallel and figure out when we should do one or the other thing right that that was really

00:05:14.940 kind of what made me say like i need to write this book because my goal here is to rehabilitate the

00:05:21.160 word to say it's okay to quit things because quitting is often the wisest choice when i i think when you

00:05:30.840 that idea of that grit and quit are the two sides of the same coin i think i look at my life in order

00:05:36.680 for me to persevere in some things means i have to quit other things right like i mean like i think back

00:05:43.020 when i played sports as a kid there was a period where i was playing basketball and i was playing

00:05:47.100 baseball and i was playing football and i remember when i was ninth grade tenth grade where i had to

00:05:53.340 decide which one do i really need to focus on if i want to get good at it and it was football and so

00:05:58.860 i didn't say i was quitting baseball and basketball or whatever and wrestling but i was uh yeah because i i in

00:06:06.200 order for me to to focus on football and really persevere in that i had to quit the other stuff but i think

00:06:11.180 that's funny i mean we quit all the time i mean think about all this stuff we all have hobbies that

00:06:15.120 we as a kid that we did like i would i went through a magic phase but i don't do magic anymore because

00:06:20.500 i wasn't any good at it and i didn't enjoy it and there's other things i found but instead of saying

00:06:24.600 we quit we we you talk about how in our we tend to like change how we talk about quitting so it

00:06:29.760 doesn't sound like quitting it's like well i shifted my focus or i'm pivoting right but we quit

00:06:34.620 all the time yeah we hate the word quitting so much that we have a like a whole like a huge variety

00:06:41.440 of euphemisms for it like starting a new chapter or you know shifting my focus as you said or the big

00:06:50.560 one is pivot pivot yeah i'm pivoting and it's really interesting like there's an example that i have in

00:06:56.560 my book about lindsey vaughn and then recently serena williams did the same thing where you have people

00:07:01.940 who have shown a tremendous amount of grit like clearly nobody nobody can question their ability

00:07:09.040 to persevere right and to stick to it and yet when they make the decision to retire they say i'm not

00:07:16.320 quitting so lindsey vaughn you know announces like i've decided that i'm gonna stop skiing okay stopping

00:07:23.220 is quitting right i have to listen to my body which is telling me that you know it's broken and i really

00:07:29.720 can't continue but uh i'm not quitting and for all the kids out there like never give up right and and

00:07:38.140 it's so jarring and then serena williams just did the same thing where she said like i'm not quitting

00:07:42.380 i'm heading down a new path or something like that and you just look at these things and you say

00:07:48.300 what is going on like they're demonstrably quitting they're retiring from the game

00:07:53.460 that's quitting but why are they so unwilling to say the word and it's like i i say like quitting

00:08:01.620 gets the valdemort treatment right like the word that shall that shall not be named right so we want

00:08:08.320 to talk around it and not actually say that we're doing the thing that we're actually doing and and to

00:08:14.680 your point what a silliness and by the way angela duckworth who wrote grit the power of passion and

00:08:19.980 perseverance i think really agrees with this like i i think that you know it may seem like oh i'm

00:08:25.900 having a disagreement with her but i actually have no disagreement with her whatever i i think that

00:08:31.020 people misinterpret her work as like perseverance is just good and it's character building but her

00:08:35.880 point is that you have to explore a lot of stuff and then find the thing that you're passionate about

00:08:42.380 and then be willing to stick to that even if it's hard but what she would never tell people to do

00:08:49.560 is stick to hard things that aren't worthwhile you know so your story about well you tried a bunch of

00:08:55.560 different sports so you were exploring different sports and then you had to decide what is the

00:09:00.060 thing that i'm really going to you know spend my time on and i have to quit the rest in order to be

00:09:05.020 able to do that is a good example of how someone can be gritty and quitty at the same time because we

00:09:11.620 have limited time and limited resources and limited attention that we can devote to anything at one single

00:09:18.920 time so you have to figure out what are the things that aren't worth my time so i can quit those to

00:09:25.240 free up those resources to turn your attention to things that are worth your time and so most people

00:09:32.460 who are really good at quitting are also quite gritty in fact they view the point of doing the quitting

00:09:39.660 in order to be able to have to free themselves up to persevere at the things that really matter

00:09:44.920 okay so yeah let's talk about i mean the benefits of quitting we've kind of been

00:09:48.920 talking around it but it one thing it allows you to focus more of your time on the things that

00:09:53.600 matter to you any other benefits that of quitting that we overlook when we think about quitting

00:09:58.520 the primary function of quitting is to help you deal with uncertainty so imagine if you were

00:10:07.200 omniscient not just omniscient so you knew everything there was to know but you also could see into the

00:10:12.860 future then you know quitting wouldn't be such a valuable skill because when you chose to do

00:10:19.620 something you know you would be choosing something that was probably going to continue to be great

00:10:23.820 going forward you know likely just because things change you you may want to do some quitting in the

00:10:29.880 future but it would be less valuable because you wouldn't be deciding under so much uncertainty

00:10:33.820 in other words there wouldn't be so much information discovery occurring after the fact after you

00:10:38.860 actually started something but that is not the world that humans live in we are neither omniscient

00:10:43.960 nor time travelers and so what that means is that whenever we enter into any course of action whenever

00:10:48.820 we choose to start something we're choosing to start something with very little information and a strong

00:10:54.980 influence of luck on on the way it's going to turn out like think about something as simple as a decision

00:10:59.760 to hire somebody right you have a few interviews with them and maybe like two references

00:11:03.780 and then you hire them and obviously that's very little information you know you're going to find

00:11:09.200 out a lot about that person after they're actually in the job right are they good at it are they bad at

00:11:14.000 it you know so on so forth this is true like very simply in poker like i start a hand and then i'm going

00:11:19.060 to find out all sorts of new stuff like my opponent is going to take certain actions they're going to

00:11:24.220 tell me something more about what they're holding and then there are going to be new cards that come

00:11:27.980 and i need to have the option to be able to quit in order to deal with that in order to be able to enter

00:11:33.300 into that decision so quitting is what allows us to do that because imagine like imagine if the first

00:11:41.920 date you went on you had to marry that person it would be so hard to ever make a decision about who

00:11:47.220 to go on a date with because the stakes would be so high because you you wouldn't be able to get out

00:11:52.180 of it but we can get out of it and so you can go on lots of dates so that's really like the primary

00:11:57.000 function and primary benefit of quitting but then when we sort of say okay so we have this option

00:12:02.440 to quit when we quit what does it allow us to do well it allows us to get off paths that aren't

00:12:08.780 really worthwhile in other words we we start things all the time that it turns out are not causing us

00:12:15.240 to advance toward our goals in the way that we thought they would so maybe we're not gaining as

00:12:21.680 much ground as we had hoped or maybe we're actually losing ground and we find that out after we've started

00:12:27.500 the thing so what quitting does is allows you to stop doing that thing and go do something that

00:12:34.080 is going to cause you to gain more ground toward your goal and in that sense we can see where people

00:12:39.680 really have it wrong about quitting most people when they think about quitting they think it's going

00:12:44.680 to stop their progress it's going to cause you to lose ground well that's only true if you're quitting

00:12:51.880 something that's worthwhile but if you're quitting well and quitting the things where after you've

00:12:58.800 started them you sort of discover you know what this isn't really getting me to where i want to go

00:13:02.680 very fast or maybe it's actually causing me to lose ground so i'm going backwards now if you quit it will

00:13:09.600 get you to where you want to go faster because it allows you to switch to something that is going to

00:13:14.460 cause you to gain ground toward your goals and that's something that i want people to really understand

00:13:19.080 and internalize that quitting doesn't stop your progress it speeds you up it allows you to get to

00:13:26.740 where you want to go faster and that's why like one of the things i say is we have this thing like

00:13:31.420 winners never quit and quitters never win what i say is no winners quit a lot and it's part of why they

00:13:35.820 win because they're constantly trying to get on the best path that's available to them and so yeah this

00:13:42.200 idea this is bringing the economic stuff that you you research with quitting when we make a decision to

00:13:47.460 quit or continue we're using what's called expected value correct yeah so expected value simply put is

00:13:55.540 if you compare the long run uh cost to the long run benefits are you net positive right so like i said

00:14:05.920 a very simple way to explain expected value is if we were betting on a coin flip and heads you win

00:14:13.100 tails i lose and when you win i give you two dollars and when you lose you give me one dollar

00:14:19.260 that would be a positive expected value bet for you because we know that you're going to win the bet 50

00:14:24.420 percent of the time and so when you win half the time you're going to get two dollars so we can

00:14:30.300 multiply 50 by two dollars and that means that's a one dollar long term win for you and then half the

00:14:37.840 time you're going to lose a dollar and so 50 of a dollar is 50 cents and so now we can take that

00:14:45.080 gross earnings that dollar that you're going to earn in the long run against that 50 cents that

00:14:50.060 you're going to lose and you can see that for every dollar that you're risking on every flip you're

00:14:54.560 actually going to make 50 cents now what's important to understand about expected value it's it's kind

00:14:59.140 of a long run weighted average and so what that means is that notice that on no flip do you actually

00:15:04.220 get 50 cents you either get two dollars or you give me a dollar right but if we do it like you

00:15:10.080 know 10 000 times you're going to end up making 50 cents for every time that you bet so it'd be

00:15:16.040 10 000 times 50 cents is what you would make some five thousand dollars so that would be pretty good

00:15:20.700 you would like that um but expected value isn't just about like these bets or money you know like

00:15:26.520 if i invest a dollar in a stock am i earning money on it uh expected value also has to do with

00:15:32.300 you know how are we achieving our goals there are there are different types of benefits that we can

00:15:37.180 achieve as human beings that aren't monetary things like happiness or health right if you're choosing

00:15:42.900 to run a marathon there are things that that's costing you like time with your family some degree

00:15:49.740 of expected physical discomfort but what you're getting in return for that is maybe the feeling of

00:15:56.100 having accomplished something that very few people accomplish you know the physical fitness that comes

00:16:01.900 with it you know that being in a flow state the feeling of that endorphin rush you know so on so

00:16:08.200 forth we can think about what are the things that you're getting from deciding to train for a marathon

00:16:13.480 versus what are the things that you're sacrificing and when you decide to start it what's implied

00:16:18.560 is that you think that you're positive expected value that you're winning to that decision that the

00:16:23.220 benefits are going to outweigh the costs right but what we need to realize is that when we're

00:16:28.980 entering into a decision when we're deciding to start something we're making educated guesses

00:16:33.320 about whether it is positive expected value whether you're going to win to that in the long run not

00:16:39.760 only are we making educated guesses about that where maybe maybe our forecast was actually wrong but also

00:16:45.780 the world things can change about the world and things can change about us so we can start a marathon

00:16:52.680 and decide that the physical discomfort is worth it compared to the things that we're going to win

00:16:58.400 but then maybe we break our leg in the middle of a marathon and then that expected value equation is

00:17:03.680 going to shift based on that that new event that has occurred and we want to always be paying attention

00:17:08.760 to that so that's essentially like if we get to the core of how do you figure out when it's right to quit

00:17:14.280 versus when it's right to stick to something or persevere it's really a question of expected value

00:17:20.280 right if the path that you're on is expected value particularly in comparison to other things

00:17:24.960 you could be doing with the time and then you should you should probably continue even if it's

00:17:28.880 really hard and if it's not then you should switch taking into account switching costs so this this

00:17:34.960 requires like a lot of self-reflection and knowing what you want so i think sometimes you when you get

00:17:40.460 stuck on a goal you forget about what you want you're like well i got this goal and i got to do it even

00:17:45.840 though you don't you're really not getting any satisfaction out of it well i think this brings

00:17:51.180 up actually a real problem with goals so you know goals obviously there's there's lots of research

00:17:57.160 that said goals are good like i'm not telling people don't set goals having clear goals you know

00:18:01.940 in this world of kpis and okrs right like having clear well-defined goals for people to try to achieve 0.98

00:18:09.360 is a motivating factor it does help people to achieve those things more quickly and increases the

00:18:14.960 probability that they'll do so but i think that we have to remember that there's a downside of goals

00:18:19.460 and i think one of the best examples of that is a woman named siobhan o'keefe who was running in the

00:18:25.260 2019 london marathon and somewhere around like mile three she started to experience a lot of pain

00:18:32.560 in her leg and i think it was right around mile eight that her fibula snapped oh geez yeah so she broke

00:18:41.020 her leg so i assume you know i mean like really broke her leg i i assume that you have the same

00:18:46.440 intuition that that i do that if if that were to happen to you you would quit running you would just

00:18:51.180 say whoops i guess i'm going to stop this marathon right because i just broke my leg but that is not

00:18:56.580 what happened she actually continued to run despite the medical people telling her that she should stop

00:19:01.700 and she finished the marathon now you might think you know oh that's super nutty that she did that 1.00

00:19:09.360 that's got to be pretty rare but the fact is it's not rare actually three other people in that same

00:19:14.320 marathon did the same thing broke something relatively early in the race and then continued

00:19:18.980 and ran until the end and then if you just like do a google search of like you know people who break

00:19:25.160 something but finish marathons you'll see that it's very well populated people are doing this all the

00:19:31.300 time and if we talk about you know what we were saying before about you know if you're if you're

00:19:36.080 doing something it can prevent you from doing other things and so there's a cost to that right

00:19:41.460 so you want to be making sure that you're quitting the stuff that isn't worthwhile there's also another

00:19:46.080 problem which is sometimes when you continue something it's going to stop you from being

00:19:49.580 able to do that thing in the future so there are also future costs to that in the case of running a

00:19:54.480 marathon you know from mile eight where you're now going to be running 18 more miles on that broken

00:20:00.400 leg clearly you're increasing the probability that you may never actually run a marathon again

00:20:06.260 because that injury is now going to become more and more severe there's no question that you're

00:20:13.380 increasing the length of recovery and so you're going to sacrifice some time and it may be significant

00:20:19.220 time and being able to pursue something that you clearly love so the question is you know it goes so

00:20:25.940 counter to our intuition as to why would someone continue run when they have a broken leg and so

00:20:33.920 why is that like why do we why does that break our intuition so badly and that the answer really is

00:20:40.600 because there's a finish line and that's really what a goal is right so when you start a marathon

00:20:46.660 there's a finish line it's 26.2 miles and here's the problem with goals there's a few of them

00:20:53.480 the first one is that they're graded pass fail so if you complete eight miles of a marathon

00:21:01.280 you've failed in fact if you complete 25 miles of a marathon you have failed never mind that you ran

00:21:11.460 25 miles more than most people right so let me let me just ask you this because I think that it's important

00:21:17.060 to kind of get at this intuition so which would feel worse to you Brett let's imagine that you

00:21:23.340 determined that you had no interest ever in running a marathon and so you like stayed on the couch

00:21:29.660 and watched you know television or you know obsessed about the news or something or or you read a billion

00:21:36.840 non-fiction books while sitting on the couch which may be part of what you spend your time on so imagine

00:21:42.300 that that that was that version of Brett and imagine another version of Brett who decides that you want

00:21:47.280 to run the marathon a marathon so let's say you want to run say the New York City marathon

00:21:51.520 and you train for it which involves a lot of running and you go out on that day to run the marathon

00:21:57.600 and you get injured on mile 16 so severely that you can't continue and you so you have to stop running

00:22:05.440 so you have to quit which feels worse never having tried at all or having started the marathon and

00:22:15.820 having to walk away on mile 16 well I know my intuition would be like the quitting would feel worse

00:22:21.820 right right and so I you know and I don't know anybody who doesn't have that intuition and think

00:22:27.720 about how weird that is because in one version of Brett you never ran a mile but the other version of

00:22:34.720 Brett ran many many miles so isn't the other version of Brett like more accomplished at least as it comes

00:22:42.500 to that of course but the problem with the version of Brett that stopped on mile 16 is that you were

00:22:47.920 10.2 miles short of the finish line so therefore you failed because there is no in-between and so this is

00:22:55.560 the issue that we have with goals and we have to be very careful about it is that the minute that you set

00:22:59.680 a goal you also start that's the moment that you start so now you have a starting line and a finish

00:23:06.580 line and as soon as you step your toe over the starting line you are now at least cognitively

00:23:12.200 what we would call in the losses this is a term that Richard Taylor uses a lot so in the losses means

00:23:20.360 that we are we have some sort of loss on paper at that moment so when you're 16 miles into a race

00:23:27.820 we can see that sort of in reality from an object objective standpoint you have gained 16 miles

00:23:34.780 16 miles more than from when you started but cognitively that's not how we do it because being

00:23:40.240 in the losses is a cognitive phenomenon and from you know our own cognition is is processing that as

00:23:46.260 being in the losses in other words 10.2 miles in the losses because we measure that the way that we

00:23:51.700 sort of feel about losses and gains is in relation to our destination not in relation to where we

00:23:57.560 started from and as Richard Thaler likes to point out we do not like to close mental accounts in the

00:24:04.600 losses that's a just a fancy way for saying we don't like to stop short of finish lines and we will do

00:24:11.320 everything that we can to not do that and what that means is that even in a case where the goal is no

00:24:17.180 longer worthwhile we will continue toward it we will keep running with a broken leg we'll stay in a

00:24:23.540 relationship that is uh toxic we'll stay in a job that we hate that we're miserable in because we

00:24:31.140 don't want to have to close that account as a failure so that that's like piece number one that's

00:24:36.680 kind of a problem with goals and then what goes along with this pass fail nature of goals is that goals

00:24:42.020 are also fixed objects so what do i mean by that well you know we talked about cost benefit analysis

00:24:48.060 and these expected value calculations when you set a goal you're doing that cost benefit analysis so

00:24:54.680 you're saying in terms of the things that i'm trying to achieve i'm going to have this goal or this okr

00:25:00.120 or whatever and this is what i think is going to cause me to to be on a path that's positive expected

00:25:06.900 value that's going to get me to actually produce the things that i'd like to produce in my

00:25:11.020 life which may just be happiness right and so you go through that expected value calculation like

00:25:15.960 and when you decide to run a marathon you're doing that right like what are the things this is going

00:25:20.480 to cost me what are the things that i'm going to gain from this okay this seems like a reasonable

00:25:25.360 goal to set in relation to the things that i'm trying to gain and the things that i'm willing to cost

00:25:30.800 myself and so now i'm going to start and i'm going to head down that path toward that goal

00:25:34.520 the problem is that once we set the goal it's a little bit set it and forget it

00:25:38.860 as marie schweitzer of the wharton school says i think he says this really well goals are fixed

00:25:44.300 objects in a changing world so what happens is that we sort of make our best guess under uncertainty

00:25:49.860 about what is going to be the best goal to set in terms of what we're trying to achieve

00:25:54.700 and then once we start on it the goal itself becomes the object and it's a fixed object despite

00:26:00.840 the fact that the world might be changing and we might be changing and it stops us from taking that

00:26:06.120 stuff into account because we're just sort of like heading toward the goal come what may and so

00:26:11.940 you know i think that people have to be careful when they're setting goals to realize that this is the

00:26:16.320 case and then start thinking about how can you create more flexibility in your goals so that you

00:26:22.060 can react more rationally to like breaking your leg in the middle of a race we're gonna take a quick

00:26:27.400 break for your word from our sponsors and now back to the show you highlight some other cognitive biases

00:26:36.860 that make it hard for us to quit sunk cost fallacies status quo bias the endowment effect even our sense

00:26:43.300 of identity can make it hard to quit and there's this great example you found really obscure business

00:26:49.300 story i think the guy was named sta right his last name was sta yeah yeah he owned this he opened up this

00:26:55.280 chain of stores was a success but then he just had a hard time quitting when he should have and i think

00:27:02.440 it was a confluence of these biases that get in the way can you talk about this and like what this

00:27:06.620 example highlights about why it's so hard to quit sometimes yeah so i mean i just want to say sort

00:27:12.380 of off the top here that i think that we have the intuition that after we start something when we get

00:27:18.800 signals from the world that tell us that we should stop we will you know like i think we have the

00:27:24.940 intuition that if you're running a marathon and you break your leg you're going to stop running

00:27:27.780 so but that that intuition is wrong and harold sta i think is such a great example of showing

00:27:33.640 that not only do we not pay attention to the negative signals but we actually tend to escalate

00:27:37.820 our commitment to the cause in other words we we double down we redouble our efforts in what we're

00:27:43.340 doing so harold sta moved to california with his family when he was a young kid in the late 40s

00:27:51.220 there he met his future wife shirley and they moved to the inland empire and this was during a period of

00:28:01.160 boom so this was in the 50s so this was like post-war america when there was obviously a big

00:28:06.560 economic boom so they sort of got some you know they sort of scratched together some money and they

00:28:13.560 bought a little storefront that at one point had actually housed chickens and so they went in and they

00:28:18.840 like you know swept out all of the feathers and whatnot and they started a store and it did really

00:28:26.280 well pretty quickly he got to move out of the air sets chicken coop because he started to open some

00:28:31.860 other locations he renamed the store as the abc stores so you could think about it as like kind of

00:28:37.280 like a kmart that's sort of where he ends up that's what the stores were like so household goods and

00:28:43.180 appliances and sort of anything that you could imagine he actually then leases a 50,000 square

00:28:49.560 foot property in montclair and there he not only has his stores but he's also sort of like almost like

00:28:56.320 a mall he's got booths or storefronts that he's leasing out now to other people like comp usa and

00:29:02.500 whatnot and so it's it's it's becoming pretty big and he's moving west there's a highway being built

00:29:07.340 connecting the inland empire to la and he starts to move west toward la and eventually even ends up

00:29:13.840 with locations in la so he was a pretty big retailer and very successful and at some point he gets

00:29:20.620 offered a merger with a similar chain that's in texas called sage stores so now they merged and

00:29:28.380 because i think staub was sort of the bigger chain he ends up being the the ceo of the whole darn thing

00:29:34.120 harold staub's stock was worth i think about three million dollars okay so he's a rich guy he's he's

00:29:40.460 built a business from a basically a chicken coop into this this huge business worth where his his worth

00:29:48.000 is is three million dollars but what happens at this time is that you know as i've mentioned kmart

00:29:55.260 this is when kmart which started off as ss creche starts to sort of expand across the country and

00:30:01.940 particularly in california they start they start to have a lot of stores and it starts to impinge on

00:30:07.560 the abc stores business at this time walmart is in arkansas and it has not sort of moved out of

00:30:15.180 there so sage is not experiencing the same problems so kmart is kind of crowding abc stores out but the

00:30:22.080 sage stores are booming so what happens is that the california stars stores the abc stores harold harold

00:30:29.420 stores start to become kind of lost leaders and the shareholders come and say we want to sell off

00:30:37.420 all of the california locations and just concentrate on the texas locations which makes sense right you

00:30:43.580 have one part of the business that's making money that's booming the texas part of the business

00:30:47.400 but the california business because of kmart is starting to lose money and harold says no he doesn't

00:30:55.460 want to do that he not only says no in the face of that very clear evidence but he says no in sort of

00:31:02.040 like the unkindest cut of all which is when he finally gets sued to force his hand to sell these

00:31:09.300 stores his lawyer switches sides and represents the shareholders so basically like his lawyers and his

00:31:18.800 lawyer and one of his best friends ends up suing him over this and yet he still stubbornly sticks to

00:31:25.160 his opinion that that you should you know that this is that he was unwilling to sell these stores he ends

00:31:30.920 up getting pushed out and they separate in a deal where basically he kind of gets his stores back

00:31:36.600 and that's what he kind of takes out of it he gets his stores back and he abandons any interest in

00:31:44.380 the sage stores and then it just kind of goes from there you know the stores are losing money

00:31:50.620 he had obviously built up a significant personal fortune that he starts to you know dump into the

00:31:57.260 stores to try to keep them afloat other independent retailers are starting to go out of business

00:32:03.260 because of kmart and instead of just sort of allowing that to happen he starts to buy those stores

00:32:09.800 that are clearly in trouble so that's sort of that escalation of commitment doubling down on the

00:32:15.320 cause even though the signs are very clear that things aren't going well and you're losing money

00:32:19.860 and then eventually i think somewhere around 1970 ish fred meyer who's a very big retailer

00:32:25.520 based out of oregon decided that they want to get it wanted to get a foothold in california

00:32:30.760 and they made harold a buyout offer for his stores which at this point you know i mean he's

00:32:36.140 dumping his personal fortune into here he's he's just losing money at this point

00:32:39.700 and he refuses that as well because he doesn't think the offer is high enough

00:32:43.280 you know and eventually all of the stores go bankrupt and the only thing he ends up being

00:32:48.580 left with is that big sort of lease that was sort of a lifetime lease on that property in montclair

00:32:54.800 which is the way that he ends up sustaining himself until his death in i think the 2000s

00:32:59.980 so and he just sort of sustained himself by you know leasing that space out to other retailers

00:33:05.620 so it's a real kind of like rags to riches to rag story but what's so weird about it is that he had

00:33:13.640 so many opportunities to save himself right i mean the signs were all there yeah and so like you said

00:33:21.780 this there's a lot going on with this guy probably there was some sunk cost fallacy right he probably

00:33:26.420 he was probably thinking well if i give up everything we work for the chicken coop and all that struggling

00:33:32.220 it would have been in vain if if we if we give up on this thing there's this idea of the endowment 0.62

00:33:36.780 effect like we we prefer things that we already own even if it's garbage like we we like our garbage 0.51

00:33:44.080 and so he's like he had he was invested like this is my my store i can't give up on it because it's

00:33:48.280 mine i'm sure his identity was tied up with his these stores idea this is like i've i've been doing

00:33:53.920 this since i was just a poor guy if i give up on it i'm giving up on a part of me so i can't do that

00:34:00.080 and so all these things contributed him to just to escalate as you said even when all the signs

00:34:05.820 were saying he should give up and i'm sure all of us have experienced something like that to some

00:34:10.220 extent in our lives yeah so you know i mean i think that one of the things that you touched on that that

00:34:15.200 is really important here is the endowment effect so the endowment effect is basically things you own

00:34:21.740 you value more than identical things that you don't own so it's kind of simple that way so you know i

00:34:28.700 mean i think we've all experienced that like you know you have a car and you you're thinking about

00:34:32.620 selling it and you look at the kelly blue book and you think the price that they're that they say

00:34:36.680 that your car is worth is completely absurd but when you go to buy an identical car you think that

00:34:41.580 the that the person is asking too much right right so okay so that doesn't make a lot of sense

00:34:47.480 and i think that you can see this endowment effect with harold stoss so clearly right because the

00:34:52.980 question is why when the california stores were failing and the texas stores were booming

00:34:57.700 and remember he was ceo of the whole thing okay so he has an interest in in in all of this right

00:35:04.480 why did he was he so stubborn that he would not sell off those california stores and the reason is

00:35:17.100 because those were the things that he really owned right those were the things that he built

00:35:21.720 and when we build things we have a particular ownership over them so he was endowed to the

00:35:28.400 california stores in a way that he was not endowed to the texas stores which was not an empire that he

00:35:33.880 himself built and we can see that again reoccur when fred meyer gives him the offer and he thinks the

00:35:41.020 offer is too low because he thinks that what he has what he built is worth more than other people from

00:35:48.180 the outside might might see it and this then causes him to to escalate his commitment uh not sell not

00:35:56.160 quit you know not just say let's go with the texas stores and a lot of it is is is because that is the

00:36:03.620 thing that he built separate and apart from that as you said we have this problem of of thinking about

00:36:09.520 waste as as sort of a backward looking issue as opposed to a forward looking issue so when we quit

00:36:14.660 things we think we're going to have wasted all the time and effort and money that we put into

00:36:18.460 something right and i'm sure you've had that feeling before you know where people will say

00:36:22.940 that right like why haven't you broken up with this person well because i put so much time and effort and

00:36:27.460 i don't want that to be wasted why haven't you quit the job well because onboarding was so hard and now i

00:36:33.640 know the ropes and i don't want to have wasted all of that work but the problem is that waste is not a

00:36:40.180 backward looking problem those those costs are already sunk it's a forward looking problem

00:36:44.220 does it make sense for me to put another dollar another minute or another bit of effort into the

00:36:50.440 thing that i'm doing that's what you ought to care about but that's not the way we think about it

00:36:54.280 so if we go back to harold staw it's like yeah okay so he put a lot of time and effort and a lot of

00:36:59.440 money and so on so forth into building that empire but the question is is it is it does it make sense

00:37:04.220 for him to do that going forward but we're very bad at looking going forward instead we think about

00:37:11.200 what we've already put into it and making a decision about whether to continue and then there's a very

00:37:16.240 you know big issue of identity because really in the end the hardest thing to quit is who you are

00:37:21.760 and the more that we make decisions around sticking to something particularly when we're now taking a

00:37:30.160 non-consensus decision the more that our identity gets wrapped up into it and then when we buck

00:37:37.860 everybody else to make a decision to continue again it kind of snowballs and our identity becomes more

00:37:43.400 and more entangled in whatever it is that we're doing and you can see that with harold staw as well

00:37:49.160 you know he builds the stores and then uh they're telling him at sage that you know everybody can see

00:37:56.460 that you ought to give it up and he makes a very non-consensus difficult decision he breaks up with

00:38:01.360 one of his best friends over it in order to hold on to the california stores and you can see how that

00:38:07.480 becomes a choice that really defines who you are and that's something that you find quite a bit like

00:38:12.300 if i believe that the earth revolves around the sun it's not really part of my identity because

00:38:17.800 everybody believes that so then if i get information to the contrary it's really not hard for me to change

00:38:23.540 my belief but if i believe something that's very non-consensus like i don't know the earth is flat

00:38:29.620 i can present you with all sorts of evidence that that's not true and what's going to happen is that

00:38:36.040 you're going to tend to reject the evidence as opposed to change your belief because if you change

00:38:40.320 your belief you're abandoning a big part of your identity which is this non-consensus extreme thing

00:38:47.280 that you hold to be true that other people don't hold to be true so it is part of who you are

00:38:53.060 and you know i love this harold staw story just because it it kind of wraps all of that stuff

00:38:58.700 into it but the other thing i really love about the harold staw story is it turns out his son barry

00:39:03.680 staw started doing research in the 1970s which really actually was some of the first work that

00:39:09.820 was done on this problem of escalation of commitment and so it was just really this really

00:39:14.380 cool connection that you know you had this amazing researcher who had done so much work on

00:39:21.200 showing this phenomenon that when we get bad news we don't abandon the cause we double down and become

00:39:28.900 grittier right so you've got this guy who that's his life's work and his father is harold staw

00:39:35.120 so one thing i've found when i've read books about cognitive biases that cause us to make

00:39:41.280 bad decisions is that even though i know that they exist there's like i don't i feel like there's

00:39:47.240 like knowing does not doesn't really do anything have you found that to be the case is like even

00:39:51.120 though you know about this stuff like okay we know this stuff exists what do you do about it like what

00:39:55.940 so like what how do you how do you overcome all this stuff so that you can quit when you need to

00:40:01.820 yeah this is actually where barry staw becomes so influential you know in the book which is first of

00:40:08.520 all he shows that you know knowing about it isn't particularly helpful but what he also shows

00:40:13.160 is that trying to do like a jedi mind trick where you say well i'm not going to worry about what i've

00:40:17.420 already put into it i'm just going to think about it going forward right like if you go like i know

00:40:22.040 i bought the stock at 50 and i i it's now at 40 but i'm not going to think about that i'm just going

00:40:27.660 to think about whether i'd buy it today which is actually something that people in finance say all

00:40:31.400 the time and he did some really beautiful work that showed that's not true uh you will take it into

00:40:37.660 account and just saying to yourself oh i'm going to treat it like a new decision what would i do if i were

00:40:43.040 starting this today does nothing to solve these problems of escalation commitment and sunk cost

00:40:48.880 and so on and so forth but he did find that there were two things that are really helpful and they

00:40:53.180 both relate to something which kahneman talks about a lot which is that the worst time to make a decision

00:40:57.980 is when you're in it so what does that mean when you're actually facing down the decision that's when

00:41:02.620 you're going to be at your decision making worst when you're actually facing the choice so what staw found

00:41:08.100 is that there's two strategies that can actually be really helpful the first is to think in advance

00:41:14.780 about what are those signals that i might see in the world that tell me that i ought to walk away

00:41:19.600 so it kind of goes back to what his point was when he was first thinking about this problem which is we

00:41:25.140 have the intuition that when we get those signals we're going to actually react to them and walk away

00:41:29.560 and that's not true so he says but what if you actually thought about what those signals were

00:41:34.400 beforehand instead of assuming that when you see them you'll notice it think in advance about what

00:41:39.820 those signals might be and then write those down and pre-commit to what the action is that you're

00:41:45.940 going to take and that that actually is really helpful the term that i use for this is kill criteria

00:41:51.320 one of my favorite examples of this type of thinking is called the turnaround time which they use in

00:41:57.200 mountain climbing so on everest when you go on summit day you're leaving at about midnight from camp

00:42:03.540 four to head toward the summit but they set a turnaround time before you ever start and that

00:42:08.300 turnaround time is 1 p.m and what a turnaround time means is that no matter where i am on the mountain

00:42:13.820 even if i haven't reached the summit if it's 1 p.m i have to turn around and the reason they do that is

00:42:20.920 that after 1 p.m you're basically the probability that something really terrible is going to happen

00:42:25.600 gets up too high because you're too likely to not reach what's called the southeast ridge

00:42:30.380 on the descent and daylight and that would be a very dangerous thing to do so they said they set

00:42:35.960 turnaround times of 1 p.m are people perfect in following these things no but more people follow

00:42:41.760 them than don't because you've actually thought about this in advance i've done that with sales

00:42:46.160 teams as well where we think about what the adverse signals are that you might see from say a lead that

00:42:51.440 you're pursuing something like in the first meeting they only wanted to talk about price they didn't even

00:42:55.960 want to know what your product was and we write those down as kill criteria and say if you see

00:43:00.900 those then you shouldn't pursue the lead anymore and that's really important because sellers who are

00:43:05.560 ready by nature um even if they go to the first meeting and the the prospect only wants to talk about

00:43:11.000 price they still think they can close the deal and now they're wasting time when they could be spending

00:43:16.160 that time on better more fruitful prospects so that's kind of the first thing you can do is sort of

00:43:21.980 think in advance and notice this gets you out of the decision the other thing that barry stahl found

00:43:26.940 is that you can get someone else to be the decider for you this is something that that kahneman says

00:43:33.340 he would call a quitting coach kahneman's quitting coach is richard thaler so i mean i'd like to have

00:43:39.360 richard thaler as my quitting coach but i don't but basically it's the idea that you know when we're in

00:43:44.760 it we don't see things very clearly but people from the outside looking in can see things very clearly

00:43:49.400 you know just as like when we're when i tell you the harold stahl story it's very easy for you to

00:43:54.360 see that well he should have quit when he had that offer to uh split up and sell off those california

00:44:01.360 stores and just concentrate on the texas stores like duh why didn't he do that because we can see

00:44:06.420 that from the outside we can see friends of ours who are in relationships where we're clearly they

00:44:11.820 should be breaking up and we know it we see friends in miserable jobs where we know that they should

00:44:16.800 stop doing it we see friends holding on to investments where we know that they should let

00:44:20.500 it go so on and so forth it's very easy to see it from the outside looking in but it's not so easy

00:44:24.900 from the inside looking out and so going and find somebody on the outside that can actually help you

00:44:30.860 and coach you toward those quitting decisions is super helpful so i can see this happening let's say

00:44:36.120 there's a career you're thinking about and you can set a kill criteria it's like i'll give myself

00:44:41.100 three years yeah and if i don't reach this this benchmark then i need to quit i knew someone who

00:44:46.800 they wanted to give theater a go and they gave themselves a deadline if i don't if i don't make

00:44:51.600 a career out of this where i'm getting paid regularly i can make a living by x date then i got to stop

00:44:56.780 and he ended up stopping and he went on to something else and he's successful there so i guess that first

00:45:01.880 thing just establish well for any goal you set out establish you know kill criteria where you're like

00:45:06.920 this is when i gotta stop yeah and the best kill criteria combine a state and a date which is what

00:45:12.760 your friend did if by this date i'm not in this state then then i need to quit one of the examples

00:45:19.420 that i love is you know which is similar to theater is if you get a phd in the humanities tenure track

00:45:26.360 positions are quite rare but if that's your goal then you should go and look up the average time it takes

00:45:33.200 for somebody a newly minted phd to get a tenure track position write that date down and literally

00:45:39.500 circle that date in your calendar and say if on that date i don't have a tenure track position

00:45:44.740 then i'm going to go and do something else and what that stops you from doing is that constant

00:45:49.960 you know feeling of making progress like so if we think about your friend with theater i'm sure that

00:45:55.280 he got some roles in between right and so then he gets a role he gets paid for it he thinks but i just

00:46:01.240 got a role i know that my success is just around the corner you know and then it's kind of not going

00:46:06.120 as planned but then he gets another role that kind of gives him hope and then it's like oh it's i know

00:46:10.760 i'm about to break through right and that can literally go on for 20 years where you always think you're

00:46:17.020 about to make it but by doing what your friend did you're tethering yourself in advance to reality

00:46:23.160 which is there's all sorts of things that can occur here that are going to feel like progress to me

00:46:28.540 but they're not actually enough progress you know when we go back to that idea of stick to hard

00:46:34.180 things that are worthwhile don't stick to hard things that aren't worthwhile what does it mean

00:46:38.740 to not be worthwhile it means that you're not making enough progress toward your goal and that

00:46:43.160 there are other things you can do that would help you to do that better so but there's all sorts of

00:46:47.960 things that give us the illusion of progress so for somebody who is you know a newly minted phd

00:46:54.700 they can do adjunct positions they can do postdocs they can do all these things that are making them

00:47:00.000 feel like they're making progress in their career but in relation to the actual goal that they have

00:47:05.220 which is to become a tenure track you know to secure a tenure track position they're really making no

00:47:10.360 progress at all but if you get that postdoc you know you're going to say okay i got another postdoc

00:47:17.800 this is great because i know this is going to be the end that's going to get me the job right and

00:47:22.560 then the job doesn't materialize and you get an adjunct position and then you rinse and repeat and

00:47:27.540 you say but now i've got an in with the university and i just know that when a position opens up at

00:47:32.300 this university because i'm doing such a good job they're going to take me you know and then that

00:47:36.100 doesn't happen and then you get another adjunct position you get and you can see how this can just

00:47:40.100 kind of go on forever if you haven't thought about it in advance and that's why i love that example

00:47:46.460 of turnaround times on everest if i am not at the summit at 1 p.m i must turn around right it's like

00:47:55.340 the perfect example of a state and a date that you can then apply as your friend did to a wide variety

00:48:02.220 of types of decisions okay so establish kill criteria and if you want to up that bring in

00:48:07.640 someone else a third party who is not so tied up into the decision right because they'll avoid all the

00:48:12.780 they don't have their identity wrapped up in your decision they don't have there's no endowment effect

00:48:16.800 going on to hold you to that well andy this has been a great conversation where can people go to

00:48:21.260 learn more about the book and your work well first of all i just want to i want to tell you how grateful

00:48:26.020 i am to you because when thinking of bets came out you know nobody knew me as an author in this space i

00:48:32.420 don't think people even knew that i had a background in cognitive science and i was just really

00:48:36.380 appreciative that you took a chance on having me on your podcast way back then and so i just want to

00:48:41.820 tell you um how grateful i am for that because you were a really big part of the success of that

00:48:47.700 book and the continued success of that book and so i'm also very appreciative of you having me on to

00:48:52.240 come talk about my latest obsession which is quitting so but anyway i so i just want to i just want to

00:48:57.000 express my gratitude there it's my pleasure in terms of finding out about me you know you can

00:49:03.340 obviously follow me on twitter i am the one who's actually running my twitter account so that's where

00:49:08.800 you're going to get the most authentic version of annie duke but you can also just go to my website

00:49:13.580 annieduke.com you can contact me there i do try to respond to people who contact me i'm not always

00:49:20.840 perfect at it it depends a little bit on how busy i am but i try you can also uh you know see like

00:49:27.180 speeches and and writing that i've done and sort of find out what the latest media is there there's a

00:49:32.380 newsletter there that you can subscribe to which i think that i hope that people enjoy and obviously

00:49:38.420 you can find out about where to buy my books there as well so that's really kind of the best place to

00:49:42.540 go find me and then the last thing is i would love it if people would check out the alliance for

00:49:47.840 decision education which is a non-profit that i co-founded trying to take a lot of the principles

00:49:52.500 that i talk about and write about you know to an adult audience and bring that into k-12 education

00:49:58.340 to start to think about you know in the world that we live in now shouldn't we be teaching kids

00:50:05.500 starting very very early about how to make decisions you know how to process information

00:50:12.340 and understand what is true how to figure out what to do once you find out what's true you know what is

00:50:18.520 a habit how do you think about your habits how might you change your habits and i i think that we

00:50:23.780 spend a lot of time teaching kids trigonometry and not enough time teaching kids how to make good

00:50:29.300 decisions and that's what we're trying to do is bring decision education into k-12 well annie duke

00:50:34.440 thanks for your time it's been a pleasure well thank you so much i really appreciate it my guest today

00:50:40.080 was annie duke she's the author of the book quit it's available on amazon.com and bookstores

00:50:43.880 everywhere you find more information about her work at our website annieduke.com also check out

00:50:48.200 our show notes at aom.is slash quit we find links to resources we delve deeper into this topic

00:50:52.640 well that wraps up another edition of the aom podcast make sure to check out our website at

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The Art of Manliness - October 10, 2022

When to Quit

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