We’ve all heard the saying, “Quitters never win and winners never quit.” This has been promulgated by hugely successful people like Thomas Edison, who failed a thousand times before figuring out how to create a light bulb to football coaching legend, Vince Lombardi, who brought the Green Bay Packers into the limelight and the championship.
But you’ve also heard that sometimes you need to know when to fold and cut your losses. You may have even heard of the sunk cost fallacy. Just because you’ve invested a lot of money, time or resources in something, that doesn’t mean you should stick with it.
Annie Duke, author of How to Decide says, “Quitting doesn’t deserve its nearly universal negative reputation.” She points out the positive side. Quitting can be a great way to defray opportunity cost.
Duke points out that whenever we choose one option, we do so with limited knowledge. As we start to experience our choice, we learn more and might see it has a bigger downside than we realized. As soon as you realize you are on a less than optimal path, you should consider quitting in order to course correct and get on a better, happier path.
So how do you know whether you should cut your losses, quit and move on or stick with it?
Sometimes quitting has a very low cost and sometimes the costs are quite high. It’s easier and cheaper to end a relationship after a few dates than to end a marriage of many years. In any long-term relationship or marriage, there will inevitably be black periods and you need to weather these storms to reach the calm on the other side. So this isn’t necessarily carte blanche to throw in the towel at the first domestic squabble. On the other hand, as Nora Ephron humorously quipped, “Never marry a man you wouldn’t want to be divorced from.”
Part of making good decisions in the first place is factoring in the cost of quitting. You can afford to make a lot of poor decisions while deciding what to wear or who to date. The cost of going on a bad date is low. You may lose a few hours of your time compared to the cost of getting into a bad marriage. So while you don’t need to spend much time deciding who to date, you do need to take time deciding whom to marry.
There is so much negativity around quitting that we don’t often consider how to quit effectively. If you got into a marriage, it makes sense to have an exit clause (a prenuptial agreement) given the grim statistics that 50% of all marriages end in divorce. Before you agree to that business partnership, write up the terms for ending the arrangement in the contract. Then if you’ve made a mistake the costs to unwind it will be clearly spelled out, making it easier to move forward with a better option.
By nature, I tend to be very loyal and stick to my decisions whatever the cost. However, after reading Duke’s book I am starting to see that cutting your losses is often an excellent strategy. Sometimes we make decisions based on a past that is no longer true. In my business, I have been investing heavily in making it a scalable and sellable venture thinking that I needed a zero-touch business. This was important to free up my time while the children were small. But now that they are older and fairly self-sufficient, I’ve discovered that I don’t need or even want a zero-touch company. My joy has always been coaching clients 1-1. Now that I have the time, I’m going back to coaching, speaking and writing. I was afraid to let go of the digital business but now I’ve realized I don’t have to. All I need to do is pivot my attention to 1-1 coaching. The cost of switching focus has been minimal and the rewards in joy and happiness far outweigh the costs.
The pandemic has also forced a few hands. A client had no choice but to shutter her business during the pandemic. A business she had bought and run for 15 years. This enforced break helped her realize that she didn’t like 75% of the tasks she had been doing to keep the business growing. Initially, a gut-wrenching decision to cut her losses, she is now salvaging what she can by selling the business and moving on to a new field that she is thoroughly enjoying. She feels lighter and happier as a result.
Quitting is sometimes necessary in order to move on to new and better opportunities.
Read the second part of this blog here.
