Here is an excerpt from an article written by Dina Smith for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive email alerts, please click here.
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Projects, relationships, and jobs don’t always work out as planned — and it’s not always clear when to throw in the towel. We’ve all repeatedly heard the adage that “quitters never win,” but sometimes the best decision is to cut our losses.
Think about that relationship you held on to even after it had run its course or the job you stayed in despite your boss making you miserable. Many of us try to hold onto the last ray of hope, thinking we can make it work, whatever “it” is. If you strongly identify as not being a quitter, your tendency is likely to stick with things for a little too long. And while tenacity is generally an excellent quality, it may also incline you to over-invest in something that is no longer a good idea.
As an executive coach, I work with numerous passionate and hard-working leaders who don’t want to “quit.” But the smartest leaders learn to discern the difference between quitting too soon and holding onto something that they shouldn’t.
Here are [the first two of] five strategies you can use to learn how to cut your losses when it’s time to go.
Refocus your thinking.
We are all susceptible to the sunk-cost fallacy an unconscious bias that leads us to persist in an endeavor we have already invested time, effort, or money into — even when abandoning it would be more beneficial.
We realize that we can’t get back the resources we’ve given, so we persevere — investing in a project that should be halted, staying in a relationship that should be over, or finishing a book we no longer enjoy and should put down, but fail to, because we’re already halfway through it. If quitting is “not your thing,” you may be especially susceptible to this bias.
The sunk-cost fallacy causes us to overly worry about what we’ll lose if we move on and not think enough about the costs of not moving on.
To offset this bias, deliberately refocus your thinking on the gains so you can more objectively weigh the alternatives. Ask yourself: What might I gain by cutting my losses now? Will you be happier or have time for another (better) opportunity? Then ask yourself: What will it cost me to soldier on? For example, is it possible that you’ll be throwing more good money after what you’ve already lost? Or that you won’t have the energy and headspace to capitalize on other promising possibilities?
Assess what’s in your control.
The illusion of control can also interfere with our best judgment, leading us to overestimate our ability to control events and attain a positive outcome. This bias gives us a sense of agency and can promote mental health. However, high self-efficacy can also result in escalating commitment to a losing course of action.
Especially when combined with an “I’m not a quitter” mentality, feeling like we have more control over an event or person than we do puts us at risk of doubling down when we should pull out.
To counteract this bias, consider your situation and make a simple two-column list of what’s in your control and what’s not. Think rigorously. Often, you can only truly control your effort and your attitude. While you may be able to influence other people and various circumstances, you can’t force them to change or go your way.
Getting clear on what you can control and what you can’t is essential to making a quality decision about whether to call it quits or persevere. With a written list in hand, you can ensure you focus on what you can control and better assess whether your continued efforts are worth the expense. Expending effort and emotion on things you can’t control can be both draining and disempowering.
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Here is a direct link to the complete article.