HANNAH BATES: Welcome to HBR On Strategy, case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business. When you think of quitting, do you associate it with failure? Today, we bring you a conversation about strategic decision-making with Annie Duke. She’s an author, consultant, and former professional poker champion — and she argues that quitting something that isn’t worthwhile is itself a success. In this episode, you’ll learn about why we often resist quitting – even when other paths would yield better results. And you’ll learn why it’s a mistake to prioritize “easy wins” when you’re embarking on a new project. This episode originally aired on HBR IdeaCast in November 2022. Here it is.
ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.
LADY GAGA: It’s not about winning, but what it’s about is not giving up.
LEBRON JAMES: You have to work the hardest. You have to chase what seems impossible over and over, and over again because giving up is not an option.
SERENA WILLIAMS: Just never give up because you never know what can happen. You never know who you can inspire.
ROCKY BALBOA: Nobody is going to hit as hard as life, but it ain’t about how hard you hit, it’s about how hard you can get hit and keep moving forward.
STEVE CARELL: I will never stop trying because when you find the one, you never give up.
BARACK OBAMA: You might want to give up. Don’t give up.
ALISON BEARD: Whether it’s in sports, movies, politics, or business, we spend a lot of time celebrating people who persevere. We prize stick-to-itiveness, grit and persistence. We applaud winners and especially underdogs who beat the odds. But our guest today wants us to rethink those assumptions. If you don’t succeed, not just at first but over and over, is it really best to try, try, try, try again? Long-term, do winners never quit and quitters never win? Or should we be thinking unless all or nothing terms about our businesses and careers? Annie Duke is an author, consultant, and former professional poker champion. She wrote the book, Quit: The Power of Knowing When to Walk Away. Hi, Annie.
ANNIE DUKE: Hi, Alison.
ALISON BEARD: Why is quitting so stigmatized?
ANNIE DUKE: Oh my gosh. We have so many cognitive biases that really stop us from stopping things. Our aversion to quitting is really built pretty deeply into our mindware. And then you see this reflected in even the English language. So, when you look at the synonyms for grit or grittiness, you have metal or pluck. It’s a sign of character. Those who stick it out are the heroes of our stories. Whereas when you look up synonyms for quitter, it’s like loser, basically, coward. They’re not the heroes of the story, they’re the villains. I think that that is very much a reflection in the way that all languages of the way that our minds think about quitting.
ALISON BEARD: I should step back and ask is this a version to quitting common across different geographies and cultures or is there something about the American environment that makes it particularly salient here?
ANNIE DUKE: Well, to be fair, I haven’t looked at every single culture, so I’m not sure that I am perfectly equipped to answer that. But what I can tell you is that bias is like the sunk cost fallacy, for example, that cause us to take into account what we’ve already spent in deciding whether to spend more on an endeavor or continue loss aversion, the endowment effect, the sort of price we put on ownership, how much we overvalue things we own versus identical things that we don’t own. Even issues of identity, these really cut across all cultures. These are very well replicated findings over about half a decade of scientific research. So, I think that this is really in large part, part of the human condition.
ALISON BEARD: Yeah. And there are so many cognitive biases. You just mentioned a few of them that push us into sticking with things even when there are signs telling us we probably shouldn’t. In your work as a consultant, a human moving about the world, which one do you see arise most often for individuals thinking about their careers?
ANNIE DUKE: I can’t really pick one because I think it’s a combination of two things. One would go under the broad category of sunk cost. So, in a job setting you’ll see people not shut down projects, not abandon a product they’re developing or even not leave their job because they’ll say, “Well, then I’ll have wasted my time or my money if I quit.” So, we don’t want to leave a job because we say, “I’ve put so much time into it. I’ve spent all this years in school and training and learning the culture. And if I quit, I’ll have wasted all of that time. I don’t want to shut this project down because what about all the money that we’ve already spent on it? If I quit, there’s no way that I can get that back.” Now, that’s a fallacy because it’s already spent. What really matters is whether the next minute or the next dollar or the next bit of effort that you put into that project is worthwhile. So, I would say that’s a very strong force that stops us from quitting. But interestingly on the other side of things, I would say that loss aversion also really stops us from quitting. So, it’s a little bit weird because loss aversion has to do with a problem with starting things in the sense that we focus on the potential losses that are associated with the decision that we might make, not thinking about what the expected value is or what the overall return on investment is. You might ask, “Well, what does that have to do with quitting?” Well, when you’re quitting something, you’re not just quitting, you’re going to start something new. And so, if we have an aversion to starting things where we imagine the ways in which they might not work out, this will actually stop us from starting new things, which in turn stops us from quitting. So, a simple example of that is you’ll hear people when they’re in a job that they hate, say things like, “Well, I don’t want to quit because what if I take a new job and I hate that one and it’s not good?”
ALISON BEARD: The devil is better than the devil you don’t.
ANNIE DUKE: Right. And that’s really the loss aversion speaking, right? It’s like, “Well, I know I’m going to be miserable in this job, but if I start something new, what if I’m miserable in that as well?” Never mind the fact that you have a much higher probability of being happy in the new endeavor than the one that you’re sticking to. And just for people who are thinking, “Well, don’t you have loss aversion for the things that you’re already doing?” The answer is not as much. It’s asymmetric. Because the status quo, whatever it is that we’re sticking to, we don’t think about that as starting something new every day. Even though in reality it is. So, in some sense, every day that you do it, you’re starting anew, but we just don’t process it that way. So, where loss aversion really gets recruited is in the thought about quitting something to start something new. So, you can see where these two biases work together in a really malign way, which is, I don’t want to stop something for fear. I’ve wasted everything I already put into it and I don’t want to start something new because I’m worried about maybe that won’t work out.
ALISON BEARD: Yeah. It seems like that would be equally prominent when businesses are thinking about projects and strategies to pursue. Are there any particular cognitive biases that you see more often in organizational settings?
ANNIE DUKE: One of the biggest things that I see is opportunity cost neglect. We don’t tend to take into account the gains that might be associated with another course of action in comparison to the thing that we’re already doing. So, if you have resources that are pursuing a particular project, those are resources that can’t pursue other projects. And any other project that you might pursue has losses and gains associated with it. We’re almost myopic in the sense that we really can’t even see the other opportunities that are available to us and that causes us to neglect the gains that might be associated with those other opportunities. One of the places that I see this really strongly separate and apart from things like strategic initiatives is in employment decisions. So, people will have underperformers in a job. What I see is, again, people really focusing on, “Well, what if I fire them and I don’t hire someone who’s good into that new role?” What they neglect is the gains. One of the things that I try to do with them is I say, “Well, imagine that you did let this person go and there was nobody in the role? Would it be better or worse?” We work through things like, “Well, they’re having a really negative impact on the team, so if they weren’t there, I think that the culture of the team would be healthier.” Generally the answer is it would actually be better not to have anybody in the role. And then we really try to focus on what’s the probability that somebody new will be better than the person that you currently have, to try to get them to stop focusing on the possibility of loss and start focusing on the gains that might be associated with other options. And this generally helps to get them to those decisions more quickly, whether it’s about employment or deciding to stop pursuing a sales lead or shutting down a strategic initiative.
ALISON BEARD: I know that the first step in all of this is understanding that these biases trying to recognize when they come up, but you make a really good point in the book that there is a difference between recognizing they exist and preventing them from affecting you.
ANNIE DUKE: So, you’re absolutely right, Alison. I think that we have the intuition that once we know about these types of biases that we won’t do them. So, if I explain really clearly the sunk cost policy to you and I say, “Look, if you buy a stock at 50 and it’s trading at 40, you’re more likely to hold that stock than in comparison to whether you would buy that stock at 40.” So, in other words, if you wouldn’t buy the stock at 40, you shouldn’t hold it just because you happen to buy it at 50. So now I’ve told you that and I’m sure, Alison, that you have the intuition. Well, okay, so now I know that so I won’t do it anymore.
ALISON BEARD: Right. But you tell a really poignant story in the book about a researcher who knew all of it.
ANNIE DUKE: Yeah. So, there’s a broad umbrella term that all of these forces both cognitive and motivational go under when it comes to failure to quit, and it’s called escalation of commitment. Escalation of commitment is just a broad phenomenon that we have the intuition that once we start something, when we discover information that would tell us that things aren’t going well. We’ll actually stop doing what we’re doing. What a variety of researchers have shown is very specifically Barry Staw and someone named Jeffrey Rubin who are really kind of the pioneers in this field, is that it’s perversely opposite in the sense that we’ll actually escalate our commitment to the losing cause. So we see the negative signals and we just invest more. Jeffrey Rubin was one of the pioneers, as I said, and he was very much an expert on these entrapment problems, these escalation of commitment problems. Jeffrey Rubin was also a very avid mountain climber. He had set a goal for himself to climb the hundred peaks. He was climbing his hundredth peak with a graduate student and a really heavy fog rolled in. His graduate student said, “Hey, I really don’t think that we should continue up. It’s pretty foggy here.” And he said, “No, it’s fine. I’m going to keep going.” The graduate student turned around and Jeffrey Rubin’s body was found two days later. So for anyone who thinks knowing is the same as doing, he really understood these problems with being entrapped in losing causes, the way that we ignore the signals that we ought to turn around. And yet he kept going and he perished.
ALISON BEARD: One of the solutions that you recommend is to calculate the expected value of a particular course of action that could be staying where you are. It could be doing something different. As a poker player, you’re used to sort thinking about probabilities, but for the rest of us, how do you make effective estimates in that way, especially when there are internal factors, your own feelings, but also external ones like the market and luck?
ANNIE DUKE: Well, first of all, I just want to make something really clear that when you make a decision, whether you’re doing it explicitly or not, you are making these types of forecasts. You are making these types of estimates. If I choose to marry person A instead of person B, what’s implied in that is that I’ve determined that the chances that I’m happier with person A is greater than the chances that I’m happier with person B. I think where we get tripped up is that when we say them out loud and explicitly, we think about it like a test. All of a sudden you could be right or wrong. But it’s not about being right or wrong, it’s about thinking explicitly about what path is going to be more likely to help you achieve your goals. Given what at the moment, understanding that it is a forecast and it’s probabilistic and you’re having to do these things knowing very little in comparison to all there is to be known. But if you’re implicitly doing it anyway, it’s always going to be better to do it explicitly. First of all, you can ask other people about it and they can help give their perspective. You can look things up from taking one career over another. I can look at on average what’s the opportunity for promotion? How long does it take someone from the position that I’m taking to get to the next level or to get into leadership or maybe even to get to the C-suite. And the other thing is, when you do this, you can actually write those things down and then as the world unfolds as it does, it makes it a little bit easier to close the feedback loops that would help you then learn, because you can see what was I thinking at the time? Why did I choose the path that I chose? And now it’s much easier to learn from that. We think of expected value as like, “Well, I have to calculate exactly what my return on investment is going to be.” But we can think more broadly just about, “What are the chances I’m happy doing A or B?” Happy being a proxy for all the things that we value. And I’ve actually done this with people. I did it with a woman named Sarah Olstyn Martinez, who was an ER doc who was really, really unhappy in her job. She asked me just for help with a decision about whether she should quit. She had another job offer from an insurance company where she was going to be evaluating cases. So, I said to her, “Well, if you’re really deeply unhappy and have been for years in the job that you’re in, why don’t you want to go and take this new job, and loss aversion?” She said, “Well, what if the new job doesn’t work out?” So, I shifted the conversation to one of expected value, but one which is palatable to somebody who might not be so mathematical. I said, “Imagine it’s a year from now. What are the chances that you’re happy in your current position?” And she said, “Well, that’s 0%.” I said, “Okay, so imagine you take this new job. I understand you’re worried it won’t work out, but what do you think the chances are that you’re happy in that new position?” She said, “Well, I’m not sure, but I guess maybe it’ll be like 50-50.” And I said, “Well, it’s 50% greater than zero.” She said, “Yes,” and she quit the next day. By the way, she’s much happier for it.
ALISON BEARD: So that does seem more straightforward for either or decisions. You had one great line from the book, “Success does not lie in sticking to things, it lies in picking the right thing to stick to in quitting the rest. But that suggests from among multiple options, picking the best one that’s going to give you the greatest chances of achieving the very most you can. So, what do you advise people to do when they’re confronting multiple paths?
ANNIE DUKE: First of all, ask yourself, can I do any of these things in parallel? As an example, I was a professional poker player and I was a speaker focused on decision-making and I did some consulting. Obviously, it made it a lot easier when I thought about quitting poker that I had something else to turn to.
ALISON BEARD: And companies quite obviously have to do that. They’re pursuing multiple projects at once. So, what’s a good way to figure out what’s the strongest option versus the things that you should stop doing?
ANNIE DUKE: So, one is just generally when you’re choosing to start something, you’re going to be taking your best guess at it. So, you want to collect as much information as you can. Hopefully you can get some base rates, in other words sort of what happens in situations similar to the one you’re considering. Get different perspectives of the members of your team. Think about the resources you have and then make your best forecast or educated guests about what the most fruitful paths to follow are going to be, and reject the rest. But what comes with that, because of these issues that we get stuck in stuff is that we have to think in advance about what would make us stop the thing that we’re starting. We could choose a path that’s going to work out 80% of the time, and by definition that means it’s not going to work out 20% of the time and we don’t have any control over that part of the equation. So, what I recommend for people to do is say, “Imagine it’s a year from now and things didn’t work out. They were kind of a disaster. Looking back, you realize there were early signals that things weren’t going well. What were they?” And you write those things down. So, if it’s a project, it could have to do with blown timelines, blown budgets, product failures, early signs that you don’t have product market fit, for example. But you write those things down. Now, you have created a list of what I would call kill criteria. When you observe those things in the world, you stop and you now switch to something else, which could be an option that you rejected in the past. It could be a new option that you’re newly considering. What that’s going to do is it’s going to basically make it so that you’re reducing the cost of choosing a path that ended up not working out well. Because what we have to remember again is that when we start things, we’re doing it under uncertainty. The good news is that we can quit when we find out new information. The bad news is the science tells us we don’t do that. So that’s what we’re trying to solve for.
ALISON BEARD: We do hear from Silicon Valley in particular this whole idea of fail fast, which in essence is sort of quit fast, right? Figure out a project isn’t working and leave it behind so you can focus your energies elsewhere. So, what are some ways that you see organizations doing that?
ANNIE DUKE: Yeah, so first of all, I just want to say I hate the term fail fast because it makes it seem like stopping something is a failure. And I think that stopping something that isn’t worthwhile is a success. I want people to start saying, “Succeed fast or quit fast.” I think this obsession with failure, I’m not sure that it’s helpful because it keeps tying quitting to failure. And quitting is not a failure. But there’s another way that you can approach sort of the prioritization of projects, which is to make sure that the path you’re on is the right path to pursue because you’ve actually solved the hard part of the problem. So let me try to explain using a mental model. And this mental model comes from Astro Teller who is the CEO, otherwise known as Captain of Moonshots over at X, which is Google’s innovation hub. So obviously, they’re doing things that are highly uncertain when they choose to start a project, mostly things are going to not work out, but if it does work out, it’s going to create this amazing change for the world. And the way that Astro Teller approaches everything is that he wants to get to that answer really quickly of whether the thing that they’re pursuing is worth continuing with. So, he offers up this mental model, which I think is wonderful, called Monkeys and Pedestals, and here’s how it goes. So, Alison, imagine that you’ve decided that you’re going to create an act. And the act is that you’re going to train a monkey to juggle flaming torches while standing on a pedestal. Now, obviously people are going to give you tons of money for that. Yay. So, if you’re going to approach that project, there’s kind of two pieces to the project. One is training the monkey to juggle the flaming torches and the other is building the pedestal. So, my question for you is, which should you attack first?
ALISON BEARD: Well, I’ve read the book so I would train the monkey.
ANNIE DUKE: Right. Now, what’s interesting though is that in normal project planning, people would build the pedestal first. And the reason for that is that the pedestal is also known as low hanging fruit. I’m sure that you’ve been in project meetings where people are like, “Well, what should we do? Well, what’s the low hanging fruit? Let’s do that first.” Well, the problem with building pedestals first is that you already know you can do it. If you build the pedestal first, it’s the illusion of progress. You’re not actually making any progress because you already know you can do it. The bottleneck, the hard part of the problem is if you can train that monkey to juggle the flaming torches, that’s the thing that you don’t know. So, what Astro Teller’s mental model tells us is that we need to attack the hard part of the problem first. In other words, when we’re thinking about pursuing something, we need to say, “What are the unknowns? What are the bottlenecks to success? And let’s not do anything until we figure out if we can solve for that.” So actually, here’s a really good example of the power of Monkeys and Pedestals in terms of prioritization. So, at some point in X’s history, they were pitched the hyperloop, essentially a vacuum tube that will take a train from coast to coast in the United States in two hours. So, it’s a super high speed rail. So, in this particular case, the technology itself wasn’t a monkey because that had already been proven. You could move things through these tubes just fine. But they did identify two monkeys that they didn’t know if they could solve for. The first had to do with regulatory problems, which was that you’re going to have to move this system through many, many different townships. Each of them are going to have different regulations. And that seemed like a very tough problem to solve. And separate and apart from that, really to know whether this thing is going to work, you have to know given the speeds that this is going to run at, that you can stop the train safely without killing people on board. So that’s a pretty big monkey, right? And so, as they discussed it, they realize that in order to get the train all the way up to speed, that you’ll basically have to build almost the whole thing before you could figure out if you could stop it safely, which is tons and tons and tons of money before we can figure out whether we can actually stop the thing safely. So, they’ve rejected the idea, how long did it take them to reject it using monkeys and pedestals? It took them 15 minutes. Now, let’s compare that to Virgin who did decide to pursue the hyperloop. They’ve raised hundreds of millions of dollars for this. And there was just an article in the New York Times, maybe a month or so ago where they said, “Oh, the hyperloop is in trouble. We can’t figure out if we’re going to be able to build this all the way across country, given the fact that every single township has different rules. But then the other thing was that they had only ever built enough of the system to get the train up to one sixth of the speed that it would eventually reach. They had never been able to accomplish a real safety test, at which point they did not abandon ship. Instead, they’re pivoting, let’s say to instead of wanting to bring people across country, they want to bring cargo across country, which is a problem that we don’t really have.
ALISON BEARD: Let me give you a counterexample though. So, we’ve all heard the story of the James Webb telescope that was years and hundreds of millions of dollars in development, many, many challenges, setbacks. They finally created a design and they did deploy it, and it’s now sending us pictures from the deepest reaches of space. So, it does sometimes work, right, to grit, not quit?
ANNIE DUKE: I’m not at all saying that you shouldn’t stick to things. It’s that you should stick to things that are worthwhile. So, I imagine with the James Webb telescope, while there were setbacks, they did actually have the monkey solved. In other words, they did understand that they could build the lens. They knew that they could launch it into space. I mean, we already had the Hubble telescope up there. Right? The hard part of the problem, I’m sure that they were very confident that they could solve. And if you’ve decided that you can solve the part of the problem and the payoff is great enough, then you have to grid out the setbacks also. I have no issue with that whatsoever including in your own life.
ALISON BEARD: Yeah. I was going to ask you about of famous founders and CEOs and politicians and musicians, and actors, and athletes who do face tons of adversity and they don’t give up on their dreams and they end up really successful, but I imagine it’s the same thing. It’s like they’ve made that calculated risk that they have the talent or they have the connections or they have the drive, frankly, to get to where they want to go to get to that goal.
ANNIE DUKE: Yeah. I mean, look, first of all, I want to be really careful of survivorship bias here. So I want to be really careful about the founder who got down to their last 50,000, couldn’t raise another round, kept at it, and somehow managed to turn it around and have us take the lesson from that that you should get down to your last 50,000 and keep going, right?
ALISON BEARD: Yeah. We all know most founders fail.
ANNIE DUKE: Right. But again, I think it’s a calibration issue. That’s where we need to understand grit is great. Sometimes you see something that other people don’t see, but sometimes when the world is yelling at you to stop and you ignore them, that’s no longer a virtue. Then it’s folly.
ALISON BEARD: So that leads me to ask you just about one other saying that you hear all the time quit while you’re ahead. Do you believe that that’s the right thing to do?
ANNIE DUKE: Yeah. So quit while you’re ahead is terrible advice. But then again, all advice about quitting is terrible advice. So, you have winners never quit, quitters never win, so and so forth. So, we know that that’s really bad advice because winners quit a lot. They quit all the things that aren’t worthwhile so that they can stick to the things that are. Quit while you’re is also really bad advice because the errors we make about quitting are mostly quitting too late, but occasionally it has to do with quitting too early. And specifically when we quit too soon is when we’re ahead. So just a really simple example, when you look at retail traders, well, retail traders will also put in take gain orders. It’s like you buy it at 50, at 60, you’re going to automatically sell it and take the gain. And what happens there is that they also cancel those orders, but in order to sell it at 55. In other words, they’ll sell much earlier than the take gain that they’ve set in place. Why? Because when we’re ahead, we love to quit and turn those gains on paper into realized gains because we don’t want to keep the risk on. And so, we don’t need advice. Quit while you’re ahead, because we already do it in fact too soon.
ALISON BEARD: Terrific. Well, thank you so much for teaching us about the value of sometimes quitting and not gritting. It’s been a pleasure.
ANNIE DUKE: Well, thank you very much.
HANNAH BATES: That was former professional poker champion Annie Duke – in conversation with Alison Beard on the HBR IdeaCast. Duke is the author of Quit: The Power of Knowing When to Walk Away. If you liked this episode, search for HBR IdeaCast wherever you get your podcasts. We’ll be back next Wednesday with another hand-picked conversation about business strategy from the Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review. We’re a production of the Harvard Business Review – if you want more articles, case studies, books, and videos like this, be sure to subscribe to HBR at HBR.org. This episode was produced by Mary Dooe, Anne Saini, Ian Fox, and me, Hannah Bates. Special thanks to Rob Eckhardt, Maureen Hoch, Adi Ignatius, Karen Player, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and you – our listener. See you next week.