In a world that champions hard work and perseverance as the keys to success, quitting is hard. Sometimes it feels downright shameful, especially when you’ve invested time, energy, or money into a decision.
However, to become a smarter decision-maker, you need to master the art of quitting, argues Annie Duke. Before becoming one of the top poker players in the world, Duke studied cognitive science and decision-making, and she currently works as a special partner for decision science at First Round Capital, a US-based venture fund focused on the seed stage. She’s the author of Quit: The Power of Knowing When to Walk Away and Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.
We recently spoke with Duke to understand how business leaders can become stronger decision-makers—and the common biases that stand in their way.
Q: Annie, you draw lessons about decision-making from your days as a professional poker player, as well as your background studying cognitive and behavioral science. How does losing make us weaker decision-makers?
A: So in the simplest sense, [let’s say I decide] to climb Mount Everest. When I set out, maybe it’s a beautiful, clear day and the weather forecast is really good. Then, when I’m halfway up to the summit, a blizzard hits me. Well, isn’t it good that I have the option to turn around so I can get out of the blizzard? ... We have the intuition that, when we get [bad] news—when that blizzard comes upon us—we will actually turn around, we will actually quit.
When you’re thinking about it in the abstract, if you buy a stock and it starts to tank in a way that completely disproves your thesis for buying the stock in the first place, obviously you would sell it. If you take a job because you think it’s going to be your dream job and it turns out that you don’t like the culture of the company, obviously you’re going to walk away from it. If you develop a product and you can’t find the product market fit, obviously you’re going to stop developing the product. These things seem super obvious to us in the abstract, but it turns out that our intuition is bonkers because we don’t actually walk away from some things—not once we’ve started them, not enough.
The reason has to do with what we would call [in poker] “being in the losses.” It can mean that we’ve sunk resources into something—time, money, effort, attention—and if we walk away, we’re going to have to abandon them. Those resources will have been wasted. ... And it turns out that when we’re in the losses in this way, we don’t want to quit things because we want to get our money back.
Q: In business, leaders sometimes make the irrational decision to double down on a strategy that isn’t working only because they feel they have a leg in the concept. As decision-makers, how can we overcome that trap?
A: [Here, we can look to Astro Teller for inspiration.] He is the CEO, otherwise known as the “captain of moon shots,” of X, which is Google’s in-house innovation hub. Their charter is to take projects from initial idea to commercialization in five to 10 years. And they want [these projects to make] a 10x change to the world, so these are really big swings. These are moon shots.
He’s developed a mental model called “monkeys and pedestals” that helps X think about this.1 It goes like this: Imagine that you’ve decided that you’re going to create an act to make a lot of money, and the act is that you’re going to train a monkey to juggle flaming torches while standing on a pedestal in the town square. People will obviously throw a lot of money in the hat for that.
So my question for you is, if you’re going to do that, what part of the problem should you tackle first? Should you figure out if you can train the monkey to juggle the flaming torches first? Or should you build the pedestal first?
Q: Well, the monkey’s the problem, isn’t it?
A: Exactly. The monkey is the unknown. It’s the bottleneck. We don’t want to build the pedestal first for three reasons. Reason No. 1 is if you can’t train the monkey, what’s the point? Then you just have a useless pedestal lying around.
Reason No. 2 is that the pedestal actually represents false progress. It creates the illusion of progress. ... You already know that you can build it, so you have learned nothing if you build that pedestal.
And then the third reason, which I think is probably Astro Teller’s biggest insight, is that building the pedestal first is going to stop you from quitting the project when it turns out the monkey’s really hard to train. ... You’re going to say, “But I can’t quit now because I put in all this effort, and look at this pedestal I built.” So his whole thing at X is you [first] have to identify: What are the monkeys? What are the unknowns? The bottlenecks? The things that we’re not sure if we can solve for? And then you’ve got to go at those first before you build any pedestals.
Now I know that, in the abstract, this seems really obvious, but I’ll put it to you: How many meetings have you ever been in where people say something like: “What’s the low-hanging fruit here? Where are the easy wins?” What they’re really saying is, “What are the pedestals?” And then they’re telling you to go do those first so that people feel like they’re making progress. That feeling of making progress is actually really bad because that’s what causes us to not abandon [a bad decision]. We’re accumulating sunk costs; we’re getting endowed to the project. Our identity is getting tied up in what we’re doing. We become afraid of failure because we’ve invested so much already.
What we want to say, instead, is: “What’s the hard part of the problem? What are the things that are going to really trip us up? Let’s figure out if we can do those first.”
Q: In your work, you also talk about how the hardest thing to quit is your identity. How so?
A: Let’s talk about Sears [as an example]. We all know Sears, the retail company founded in the late 1800s with the “Book of Bargains.”2
You could buy anything in there—socks or a house, pretty much anything you could imagine—and the idea was that mail routes had just opened up. There were people who lived in rural America. Remember, this was before cars, so people couldn’t get to cities to buy things that were available to people in the cities, and the Sears catalog was the way that people would be able to buy goods. Very, very, very successful company. ...
In the 1930s, cars started to become ubiquitous ... and the catalog business was starting to dip because people could actually drive now to places where they could get these goods. [Sears] had the idea to open up retail locations, actual physical stores, to play off of the brand that they had already developed with the Sears Roebuck catalog. That was a very successful pivot. By the 1950s, Sears represented 1% of US gross national product, so it was a very big company. The problem for Sears was that the Targets and the Walmarts and the Kmarts started to come along throughout the ’60s, ’70s, ’80s, and ’90s, and the retail business started to falter. By the ’90s, [Sears was] actually no longer the No. 1 retailer.3 ... It eventually went bankrupt. We all know the story of the rise and fall of Sears in that way, but there’s another story of Sears that most people don’t know. And that’s of Sears, the financial services company.
As you recall, in the 1930s, I said they opened these retail locations because people started to have cars, and that was hurting their catalog business. And they said: Well, everybody has these new cars. They may need insurance for them. So they founded a company called Allstate Insurance, [which originally had desks inside of Sears stores where they would sell insurance].4 ... That became the largest insurer of personal liability.5 ... [Later,] in the [’80s,] Sears [acquired] Dean Witter, which was a big stock brokerage firm.6 They also founded the Discover [credit] card7 ... and they acquired Coldwell Banker, which is a real estate company.8 ...
So the question then becomes if they owned this thriving financial services company, how on earth did they go bankrupt? And it turns out it has to do with the problem we have with quitting things that are associated with our identity.
In the ’90s, it went to the board: ... The retail locations are losing money, so what are we going to do? And the board came out of that saying, our decision is that we have to get back to our retailing roots.
So they spun off all of the financial services in an IPO in order to raise money to be able to save the retail business, which obviously did not go well. ... [The retail business] was wholly part of their identity. And when they were faced with the choice, from the outside looking in, [the decision should have been] completely obvious: Save the thriving business and get rid of the faltering business. But they saved the faltering business because that is who they were.
And what is true for Sears is also true for us as individuals, not surprisingly, because companies are collections of individuals making decisions. This is one of the biggest problems of quitting. The things that we do become part of our identity. And once it’s integral to our identity, it’s incredibly hard to walk away from them because what does that mean for who you are? Are you a consistent human being? Were the decisions that you made mistakes? And we will protect our identity to our own demise.
Q: As human beings, we value grit and perceive quitting as something to avoid. How would you change the way we think about that as a society?
A: This is part of the problem. ... People think about quitting as this negative thing to do. A failure. A character flaw. Grit, [on the other hand, is seen as] a way that you build character. It’s the hero of the story. ...
I tell the story of Siobhan O’Keeffe, who was running the 2019 London Marathon, and then, on mile eight, she broke her leg.9 Her fibula snapped. The medical personnel obviously advised her that she ought to stop running. But we can see this idea of “being in the losses.” From her perspective, she’s 18.2 miles short. ... She kept running and she finished the race.
That seems bizarre, except three other people in the same race did the same thing.10 And in every single marathon, people do this. They break things, whether it’s their ankle or their leg, or they pull something horrible or they tear something, and they keep running until they get to the finish line.
But here’s the interesting thing: As much as we can say, “Oh, that’s so ridiculous; of course, I would walk away in that situation,” I’m betting there’s also part of you that’s saying: “I wish I were that tough. I wish I had that kind of grit.” ... Because we do admire it. ... What we really need to do, though, is recognize the value of walking away from things. ...
Now, I’m not dissing grit here. I think that Angela Duckworth, her work is brilliant.11 I think people should read her book Grit because when things are hard, you still have to have a view of whether it’s worthwhile and be willing to stick to it, even though it’s tough. I agree with that. But the problem with grit is that that turns us into Siobhan O’Keeffe. It gets us to stick to hard things that are not worthwhile, that are actually going to cost us in the long run. ...
When we discover, say, a monkey that we can’t tackle, when we discover that something isn’t worthwhile, then it behooves us to quit that so we can switch to something that is worthwhile. ... When you quit in those situations, that actually takes courage because now you’re going to have to walk away from your identity. You’re going to have to walk into the unknown and you may take a lot of flak for it. The ability to do that is actually the courageous act.
We need to start to get into that mindset. ... The road to success is actually paved with a lot of quitting.
This interview is an excerpt from “The Provocateurs” podcast, a collaboration between Thinkers50 and Deloitte US. It has been edited for length and clarity.
The views and opinions expressed by interview subjects are solely their own and do not reflect the opinions of Deloitte. This interview provides general information only and is not intended to constitute advice or services of any kind.