“Know when to fold ‘em...”

There's a song by the country singer, Kenny Rogers, called "The Gambler."  The chorus has a line that goes, "You've got to know when to hold 'em.  Know when to fold 'em.  Know when to walk away.  Know when to run."  There's something to be said about knowing when to give up on a hand in poker and count your losses.  What's true for poker is many times true in life.


I recently finished the book, Late Bloomers: The Power of Patience in a World Obsessed with Early Achievement" by Rich Karlgaard.  Karlgaard devotes all of Chapter Six ("Quit! Subversive Advice for Late Bloomers") to knowing when to walk away from something.  There are all kinds of books on perseverance and willpower, and I am certain that many of you have heard the saying, "Winners never quit and quitters never win."  Tenacity.  Perseverance.  Persistence.  These are all great traits, but as Karlgaard emphasizes in his book, "Sometimes quitting is the right decision."  He discusses in convincing detail that the research in this area makes three key points:


1. "Tenacity, or willpower is a limited resource." 
As it turns out, there is a limit to tenacity (defined here as doggedness, determination, persistence, perseverance, and resilience).  Several years ago, the psychologist Roy Baumeister published one of my favorite studies of all time about something that he called "ego depletion" (I have posted about this topic a few times before - see, for example, "What do I know of man's destiny? I could tell you more about radishes" or "You're not you when you're hungry...").  Basically, there's a limit to how much willpower we can take.  If we exhaust our willpower on one thing (say, resisting the temptation for that ice cream sundae), then we have less willpower to keep us from doing something that is beneficial to us (maybe going for a 3 mile run) or to stop us from doing something that is not good for us (maybe sitting on the couch and watching television instead of finishing that homework assignment).  Baumeister wrote that willpower is "a scarce and precious resource" - if we push our willpower to exhaustion, it's just like exercising our muscles to our breaking point - we will no longer have enough to get us through and we eventually break down.  Karlgaard writes, "Perseverance applied in meeting others' expectations - whether family, community, or society - will deplete our reserves of willpower.  And then when we really need determination and resolve, we may not have enough left to pursue a new pathway or genuine passion."  In that case, if we are trying to do something against our will, or if our heart just isn't in to it, maybe it is better to quit and re-direct our efforts towards something that we are either fully engaged with or something to which we are passionately motivated to succeed. 


The economist Steven Levitt, the co-author of the book, Freakonomics, has a similar take.  We should recognize, as soon as possible, if a project or new idea just isn't going to be working out.  Rather than continuing to waste precious resources (time, energy, and willpower) on something that is doomed to fail, we should learn from our mistakes and re-direct our efforts on something that has a higher likelihood of success.  He writes:


If I were to say one of the single most important explanations for how I managed to succeed against all odds in the field of economics, it was by being a quitter.  That ever since the beginning, my mantra has been "fail quickly."  If I started with a hundred ideas, I'm lucky if two or three of those ideas will ever turn into academic papers.  One of my great skills as an economist has been to recognize the need to fail quickly and the willingness to jettison a project as soon as I realize it's likely to fail.


The problem is, due to something called the "sunk cost fallacy", our brains are wired in such a way that if we have already invested resources in a project or idea, we are likely to continue to invest those resources even when it's obvious that the project or idea has very little likelihood of succeeding.  Karlgaard emphasizes that we should recognize this tendency and quit before we waste any more time or deplete our willpower reserves.


2. "Quitting can be healthy."
Karlgaard also mentions several studies that show that subjecting ourselves to either the "sunk cost fallacy" or "ego depletion" can be hazardous to our wellbeing.  For example, a number of studies show that our stress hormone levels decrease, our sleep-wake cycles improve, our moods improve, and our immune system works better when we quit trying to achieve difficult or "unattainable goals" (recall my experience with the famous Incline in Colorado Springs, Colorado).  The psychologist Carsten Wrosch has conducted a number of studies in this area that are of interest (check out a few of these studies here and here or search online using the terms "goal disengagement" or "unattainable goals" for some additional examples).  Here, I think, it is always important to push ourselves by setting what are known as "stretch goals" - however, we should also subscribe to the principle of setting so-called "SMART" goals, where the "A" stands for achievable.  In other words, if we want to run a marathon, we should certainly set that goal.  But our goal shouldn't be to run a marathon tomorrow.  We should train for it, so that it is truly an achievable goal.  Doing otherwise can be hazardous to our physical and mental wellbeing.  As Karlgaard writes, "...misplaced tenacity can actually make us sick."


3. "Quitting, not doggedness, often produces better results."
Lastly, Karlgaard writes that "quitting often works."  He goes on further, "Any experienced tech startup founder will tell you how critical it is to know when to quit."  He talks about the late Andy Grove, who at one time was the CEO of Intel.  Apparently, at one point, during the early 1970's, Intel made most of its money on memory chips.  However, by the end of the decade, Japanese and South Korean companies had entered the memory chip market and were undercutting (and beating) Intel on price.  Intel had developed a microprocessor, but the company continued to focus on memory chips instead.  Grove recommended quitting the memory chip business altogether and focusing solely on microprocessors.  He finally asked one of Intel's other co-founders, Gordon Moore (of Moore's Law fame), "What would happen if somebody took us over?  What would the new guy do?"  To which Moore replied, "The new owner would get rid of us and get out of the memory business."  That is exactly what Intel did.


It turns out, Kenny Rogers was absolutely correct.  You do have to "know when to fold 'em."  Quitting, rather than being "for losers" can actually be the smartest decision to make at times.  Knowing when to quit is incredibly important.  Here are a few final tips:


1. It's okay to quit working on a project or idea if doing so is completely disrupting your life to the detriment of your physical and mental health.


2. It's okay to leave a company if your goals are not aligned with the company's.  If you want to make microprocessors and the company doesn't, maybe it's better to just leave. 


3. It's okay to re-focus or re-direct your efforts on a new project or idea - the important point is to learn from your mistakes.  Maybe trying to run a marathon isn't such a good idea after all, and you should try bicycle riding instead! 


4. We should always get out of relationships (and that goes for personal ones, as well as business ones) if the relationship is causing us harm.