Quit: The Power of Knowing When to Walk Away

by Annie Duke

That’s not just true for investors or ants. For any of us, having a diversified portfolio of interests, skills, and opportunities helps to protect us from uncertainty.

One of the goals for all of us should be to, as much as possible, maximize the diversification of interests, skills, and opportunities in each of our portfolios.

the amount of exploration you’re doing should never go to zero.

That’s because it’s easier to walk away when you know what you’re walking toward.

Third, when you’re currently employed, you have a mental account open. Being forced to quit caused all those people to close those accounts. We know that when you have an account open, it’s difficult to walk away.

It’s been repeatedly demonstrated that goals that are both challenging and specific get you to work harder and are more effective than goals that are more amorphous and general.

As you might already suspect, clearly defined finish lines should come with

a warning: Danger, you may experience escalation of commitment.

They point to numerous negative consequences of goal setting, several of which interfere with rational quitting behavior. In particular, they note the pass-fail nature of goals, their inflexibility, and how pursuing them leads to ignoring other opportunities that might be available.

Why? In part, because they are graded as pass-fail.

To understand why the pass-fail nature of goals can impede progress and increase escalation of commitment, consider this thought experiment. Which feels worse? If you never try to run a marathon, or if you make the attempt and have to stop after sixteen miles?

I think that we all share the intuition that the latter case would feel worse, even though that version of you trained for distance running and actually ran 16 miles of a 26.2-mile race, compared with the version of you that never got off the couch.

Progress along the way should count for something, but we discard it because goals are pass-fail, all-or-nothing, yes-or-no. There’s no partial credit given.

If you complete 5 kilometers in the context of a 5K, you’ve succeeded. But if that’s as far as you run in the context of a half-marathon, that’s a failure. If you run 13.1 miles in the context of a half-marathon, that’s a success, but in the context of a full marathon, you have failed. And successfully running 26.2 miles becomes a failure if you were attempting an ultramarathon.

Second best in the world counts for little when the goal is to be first.

Exacerbating the pass-fail problem is that once we establish a goal, we rarely revisit it. Goals tend to be set-it-and-forget-it. The finish line doesn’t move.

An “unless” is a powerful thing. Adding a few well-thought-out unlesses to our goals will help us achieve the flexibility that we’re seeking, be more responsive to the changing landscape, and reduce escalation of commitment to losing causes.

This is why having kill criteria is so important. When you set a goal, creating a list of kill criteria gives you the unlesses that you need to be more rational about when it’s the right time to walk away.

The way we view goals as pass-fail is, by definition, inflexible and categorical, causing us to discount or completely ignore any progress that we’ve made. That means, to counteract this problem, we need to find ways to mark that progress, to celebrate the things that we’ve accomplished on the way to the finish line.

More than half of the participants (56%) answered “no” to all those questions.

This is another reason that a bucket list is a bad idea.

Goals can make it possible to achieve worthwhile things, but goals can also increase the chances that we will escalate commitment when we should quit. Goals are pass-fail in nature. You either reach the finish line or you don’t, and progress along the way matters very little. Don’t just measure whether you hit the goal, ask what you have achieved and learned along the way. Set intermediate goals and prioritize goals that allow you to recognize progress along the way or acquire something valuable even if you don’t reach the goal.

Goals, when set, are a proxy for an expected-value equation, balancing the benefits that you’re trying to gain against the costs you’re willing to bear. Inflexible goals aren’t a good fit for a flexible world.

With better advance planning (like identifying monkeys and pedestals and kill criteria) and the help of a good quitting coach, you can make goals more flexible, setting at least one “unless” and planning regular check-...

“Profound truths [are] recognized by the fact that the opposite is also a profound truth.”

Thinking, Fast and Slow, 284; Thaler, Misbehaving,

One of the few aphorisms that encourage quitting is “Quit while you’re ahead.” The quote originated with a priest named Baltasar Gracian, who wrote it as advice in a 1647 book named The Art of Worldly Wisdom. (Gracian added, “All the best gamblers do.”)

“escalation of commitment.”

Thaler, during which he reminded me of the importance of including the concept and getting it right, at one point saying, “I think everything in life is about mental accounting.”

As Mauboussin and Callahan noted in their paper, many of the strategies that teams have been slow to adopt were covered in a March 2020 talk Richard Thaler gave at the MIT Sloan Sports Analytics Conference. Thaler’s talk included NBA three-point shots and two-for-one opportunities, bunts and stolen bases in MLB, and NFL fourth-down decisions and draft picks.