One of the fundamental problems of quitting boils down to a common misconception: quitting on time will usually feel like quitting too early.
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 rationalise away the clues contained in the present that would allow us to see how bad things really are.
It shouldn’t be surprising that making good decisions about quitting requires mental time travel since the worst time to make a decision is when you’re in it. That’s when you are in the present, facing down the decision whether or not to cut your losses, unable to see past what is happening right now.
When we do think about the future, we are often considering our hopes, our goals, our ambitions. That optimism means that, too often, we allow a disastrous future to hurtle toward us, noticing it only as it’s arriving on our doorstep.
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.
Dismissing an employee who isn’t working out is, of course, a form of quitting (from the employer’s perspective). Companies have to face down this situation all the time. To manage their workforce, they have to decide whether to let underperforming personnel go.
Hiring is a much more uncertain decision than most people want to believe. You have a job candidate’s CV, their references, and a few interviews. That’s the equivalent of entering a long-term relationship based on a couple of dates and having two mutual friends. The hiring success rate of managers has long been estimated at just 50 per cent, which completely squares with the uncertainty involved. How much can you know about whether a new hire will work out before they’ve actually done the job for a while?
What mitigates the risk associated with such an uncertain decision is that employers have the option to let employees go, just as employees have the option to quit. Of course, that means you need to be good at exercising that option. But the decision to fire someone is itself a decision made under uncertainty, which, as we’ve already explored in several circumstances, contributes to our tendency to persist too long.
That’s why the heuristic about when to fire someone is well known but not often put into practice.
Quit: The Power of Knowing When to Walk Away by Annie Duke
The mistake of keeping people too long after you recognise it’s not working out carries with it a heavy price tag.
Geoff Smart, a management consultant and expert on the topic of hiring talented teams, has found from studies done with his company’s clients that, in hard costs and lost productivity, an average hiring mistake costs fifteen times that person’s salary. Of course, once the hiring mistake has been made, hanging on to that employee too long contributes to that cost.
This is true of all our delays in changing course. If we don’t cut our losses when it’s warranted, those losses will continue to accumulate.
This exposes a common misconception about quitting. 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. Any time you stay mired in a losing endeavour, 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.
Contrary to popular belief, quitting will get you to where you want to go faster.
This is an edited extract of Quit: The Power of Knowing When to Walk Away by Annie Duke (Ebury Books, RRP $35). Available now from booksellers, as an eBook and an Audiobook. Purchase a copy here.