Tag: Annie Duke

Annie Duke on Quitting, Part 6

In her book, Quit: The Power of Knowing When to Walk Away, Annie Duke shares her inspiration and recommendations to help us make better decisions.

These are some of my favorite recommendations from reading the book.

Chapter 6 Monkeys and Pedestals

“Monkeys and pedestals is a mental model that helps you quit sooner.”

“Pedestals are the part of the problem you know you can already solve, like designing the perfect business card or logo. The hardest thing is training the monkey.”

“When faced with a complex, ambitious goal, (a) identify the hard thing first; (b) try to solve for that as quickly as possible; and (c) beware of false progress.”

“Building pedestals creates the illusion that you are making progress toward your goal, but doing the easy stuff is a waste of time if the hard stuff is actually impossible.”

“Tackling the monkey first gets you to no faster, limiting the time, effort, and money you sink into a project, making it easier to walk away.”

“When we butt up against a hard problem we can’t solve, we have a tendency to turn to pedestal-building rather than choosing to quit.”

“Advance planning and precommitment contracts increase the chances you will quit sooner.”

“When you enter into a course of action, create a set of kill criteria. This is a list of signals you might see in the future that would tell you it’s time to quit.”

“Kill criteria will help inoculate you against bad decision-making when you’re “in it” by limiting the number of decisions you’ll have to make once you’re already in the gains or in the losses.”

“In organizations, kill criteria allow people a different way to get rewarded beyond dogged and blind pursuit of a project until the bitter end.”

“A common, simple way to develop kill criteria is with “states and dates:” “If by (date), I have/haven’t (reached a particular state), I’ll quit.””

Annie Duke on Quitting, Part 5

In her book, Quit: The Power of Knowing When to Walk Away, Annie Duke shares her inspiration and recommendations to help us make better decisions.

These are some of my favorite recommendations from reading the book.

Chapter 5 Sunk Cost and the Fear of Waste

“The sunk cost effect is a cognitive illusion where people take into account resources they have previously sunk into an endeavor when making decisions about whether to continue and spend more.”

“The sunk cost effect causes people to stick in situations that they ought to be quitting.”

“When deciding whether to stick or quit, we are worried that if we walk away, we will have wasted the resources we have spent in the trying.”

“You might be experiencing the sunk cost fallacy if you hear yourself thinking “If I don’t make this work I will have wasted years of my life!” or “We can’t fire her now, she’s been here for decades!””

“Sunk costs snowball, like a katamari. The resources you have already spent make it less likely you will quit, which makes it more likely you will accumulate additional sunk costs, which makes it again less likely you will quit, and so on. The growing debris of your prior commitment makes it increasingly harder to walk away.”

“We don’t like to close mental accounts in the losses.”

“Knowing about the sunk cost effect doesn’t keep you from falling prey to it.”

“You can’t trick yourself into not taking sunk costs into account by trying to view the situation as a new choice. Asking whether or not you would continue if the decision were a fresh one doesn’t mitigate the sunk cost effect the way you might intuitively think it would.”

Annie Duke on Quitting, Part 4

In her book, Quit: The Power of Knowing When to Walk Away, Annie Duke shares her inspiration and recommendations to help us make better decisions.

These are some of my favorite recommendations from reading the book.

Chapter 4 Escalating Commitment

“When we are in the losses, we are not only more likely to stick to a losing course of action, but also to double down. This tendency is called escalation of commitment.”

“Escalation of commitment is robust and universal, occurring in individuals, organizations, and governmental entities. All of us tend to get stuck in courses of action once started, especially in the face of bad news.”

“Escalation of commitment doesn’t just occur in high-stakes situations. It also happens when the stakes are low, demonstrating the pervasiveness of the error.”

Annie Duke on Quitting, Part 3

In her book, Quit: The Power of Knowing When to Walk Away, Annie Duke shares her inspiration and recommendations to help us make better decisions.

These are some of my favorite recommendations from reading the book.

Chapter 3 Should I Stay, or Should I Go?

“A key finding of prospect theory is loss aversion, the phenomenon whereby the emotional impact of a loss is greater than the corresponding impact of an equivalent gain.”

“Loss aversion creates a preference for options associated with a lower chance of incurring a loss. It makes us risk averse.”

“When we are in the gains, we have a tendency to quit too early in order to avoid the risk of giving those gains back. In other words, we like to quit while we’re ahead.”

“When we are in the losses, we become risk seekers. We want to keep going, hoping we can avoid ever having to realize the loss. Daniel Kahneman has characterized this as sure-loss aversion. In other words, we like to stick when we’re behind.”

“Quitting on time usually feels like quitting too early, and the usually part is specifically when you’re in the losses.”

“Retail investors show this pattern of quitting when they’re ahead and sticking when they’re behind.”

“Even expert investors don’t get their quitting decisions just right. They outperform on their buying decisions but underperform on their selling decisions.”

“We naturally track and get feedback on the things we are doing. But once we quit something, we also quit keeping track of that course of action. This creates a problem with getting high-quality feedback, which in turn makes it hard to hone our quitting skills.”

Annie Duke on Quitting, Part 2

In her book, Quit: The Power of Knowing When to Walk Away, Annie Duke shares her inspiration and recommendations to help us make better decisions.

These are some of my favorite recommendations from reading the book.

Chapter 2 Quitting On Time Usually Feels Like Quitting Too Early

“The hardest time to make a quitting decision is when you’re in it.”

“Our intuition is that quitting will slow down our progress. The reverse is actually true. If you walk away from something that is no longer worthwhile, that frees you up to switch to something that is more likely to help you achieve your goals—and you’ll get there faster.”

“When the time is objectively right to quit, nothing particularly dire will be happening right at that moment. Getting the timing right means looking into the future and seeing that the chances things will go your way are too slim.”

“Thinking in expected value helps you figure out if the path you are on is worth sticking to. EV is not just about money. It can be measured in health, well-being, happiness, time, self-fulfillment, satisfaction in relationships, or anything else that affects you.”

“If you feel like the choice between persevering and walking away is a close call, it’s likely that quitting is the better choice.”

“In hindsight, we can see when someone has waited too long to quit, and we tend to be harsh in our judgment of those people. But when someone quits before it seems obvious to others, we mock them for quitting too early. That’s the quitting bind.”