Are you unhappy at work? Beware of the Sunk Cost Fallacy

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Are you unhappy at work? Be aware of the Sunk Cost FallacyAlexandra Humbel Coaching

If you are considering making a big decision, like changing jobs or embracing an entirely new industry or career, you better be aware of your decision-making process. What stands in the way of making educated choices and how can you debunk your own biases?

I had an aha moment when I discovered that what I had experienced myself, and observed in others for many years, had a name. Award-winning journalist David Mc Raney masterfully described the Sunk Cost Fallacy:

Misconception: You make rational decisions based on the future value of objects, investments, and experiences.

Truth: Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.

Psychologist Daniel Kahneman gave a fascinating insight on the topic. According to him and his colleague Amos Tversky, organisms that placed more urgency on avoiding threats than they did on maximizing opportunities were more likely to pass on their genes. Over time, the prospect of losses has become a more powerful motivator on your behaviour than the promise of gains.

According to Behavioral economist Dan Ariely, the “pain of paying” arises whenever you must give up anything you own.

How does the Sunk Cost Fallacy impact your career decisions?

You, and possibly your parents, have invested in your education, giving you opportunities to start a career in an area of your choice. Since then, you have made your way in the corporate world to better jobs, better pay, more empowering positions. Or you may have created your own company, maybe several, and led them to growth. You had your share of successes and failures. The sum of time and effort you have put into your career has created the professional you are now, at this moment of time.

Even though you are not happy with what you experience at work now, the idea of giving up what you have built, year after year, is just unbearable. David Mc Raney gives this example:

“Have you ever gone to see a movie only to realize within 15 minutes or so you are watching one of the worst films ever made, but you sat through it anyway? You didn’t want to waste the money, so you slid back in your chair and suffered.”

Your career is not fiction and your investment is worth more than a movie ticket. But still, why are you staying? Are you paying a tribute to all the pain, time, and effort which resulted in this not-so-fulfilling position where you are now? How do you bypass the Sunk Cost Fallacy?

Awareness starts with small things

In your everyday life, you make dozens of micro-decisions, from what to buy for dinner to how to respond (or stay silent) when you disagree in a meeting. Become an avid observer of your decision-making process. I recently bought a suitcase, however, I was not 100% sure that it was the cabin size I wanted. I came home and realized that it was the wrong size, which hardly surprised me. I had completed the purchase at the end of an afternoon of shopping which was all but enjoyable, for various reasons, including that I did not find the things I wanted to buy. So I wanted to go back home with at least one useful item to justify my unsuccessful shopping afternoon. Our decisions patterns are pretty much the same for every instance of life. Get curious about your own bias.

There is no loss, only transformation

This is not an easy one, rather a big chunk of wisdom that takes a lifetime to digest. How does it relate to your career? Wherever you go, everything you have learned and achieved stays with you. Think of the value you will bring to a new environment, a new team, and a new project. This travels with you and continues to expand as you challenge yourself.

Zoom in: Transferable skills

This is something I invite my clients to explore thoroughly at some point. You think all your skills are described in your CV, but this is only the tip of the iceberg. At this point in your life, you deserve more than doing the things you know you can do. You want to focus on what you shine at, on the things that come to you so naturally and willingly, that you are in a flow and deliver your best work with the greatest impact. For more on this, read my post here.

Zoom out: The big picture

Questions about your next career move can become painfully obsessive, for a good reason. There is much at stake and you want to make educated choices, especially if you have to step beyond your comfort zone and take risks. At that point, I invite my clients to put aside, for a moment the career topic. This can sound counterintuitive, as this is the very reason why they hired me. It takes one session to understand that your real agenda is the life you want, including your health, how much time do you need for your family, for your personal wellbeing, how much money you need to sustain this life, what needs to change to put your project in motion, among others. Read more about the big picture in this article.

 

 

Sources
Mc Raney, D. “You Are Not So Smart”
Kahneman, D. “Thinking, Fast And Slow
Ariely, D. “Predictably Irrational”

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The Big Picture

The Big Picture - Alexandra Humbel at the Wynwood Walls in MiamiAlexandra Humbel

The Wynwood Walls, in the famous street art district of Miami, are a source of awe for me. I love to feel dwarfed and overwhelmed by these powerful pieces of mural art. My latest visit inspired me with a question: Are you watching the big picture in your life? Or only some fragments of it?

The big picture of your world is what you call reality. Because you have been taught that what you see, touch and feel at every moment is reality, the very idea that the person sitting next to you in the bus or at a concert has a different perception is weird. Aren’t you seeing the same buildings, feeling the same bumps on the road, hearing the same music? Nevertheless, your neighbour’s experience is vastly different from yours. Her values, her culture, the past and current circumstances of her life are telling a different story from the same material. Even you, are having a different perception today than you did a few years before. Do you remember how the building next to your childhood house looked high at the time, and how average it looks today? Like the child you use to be, your world is changing with you. This is why you need to update your big picture, embrace it as it is now because you don’t want to carry on old beliefs and outdated perceptions into your current and future life.  

The big picture of your achievements is much, much more than your CV. Slow down a moment and consider this: If someone was introducing you at a conference, and detailing all your achievements until now, all of them, what would she say? Your marathon running, your dedicated parenting, your sales targets outperforming, your engagement with ageing parents, your capacity to thrive in a new job, a new country or a new industry, your capacity to learn new competencies, your incredible taste at decorating a home, your resilience and courage facing disease, your priceless friendship… You know what value you are bringing to this world. Is this reflection an apology of self-satisfaction and idleness? Not even close. It is an invitation to consider, once in a while, how great and brave you are. Studies say we celebrate our successes for minutes and our failures for years. Does it ring a bell?

The big picture of your dreams is directly connected to the previous. While we worry about the things we did not do, did wrong, should do, or should not do, there is not much brain space left for our dreams to expand. Big dreams need big walls. You need space to explore them, embrace them, get inspired, get excited and eventually, driven to action. Once in the middle of the action, you may lose sight of the big picture while achieving smaller goals. One of my clients was feeling out of sync, whereas she just had achieved major progress in her ambitious project. Something was blocking her energy just before the finish line. We realized that she has lost sight of the bigger picture beyond the immediate goals. We built up a strategy to overcome the hurdle and accelerate the process by visualizing the next steps as if she was already there. 

And you, what does your big picture tell you?

 

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The Barefoot Boss

Every month, meet an inspiring ground-breaker and achiever, a leader who is changing the culture around age, work, and living a purposeful second act of life.

Ed Kushins is an ex-US Navy submarine officer, entrepreneur, startup investor, social innovator, sharing economy trail-blazer, people connector, avid traveler, and good life lover.  Please join me for a fascinating conversation on a sunny Californian beach with my ex-boss, mentor, and friend, a man who makes his most strategic decisions barefoot in the sand.

How did your 50’s look professionally?

In my 50’s I was running two businesses in parallel. One was a family scrap metal recycling business, Fairway Salvage, that I subsequently built from 2 to 55 employees. I had a partner on board, which allowed me to run the company without spending too much time on it.

The other one started more as a hobby than a business but ended up becoming much larger. I had been on a home exchange vacation with my family and came back enthusiastic about the concept. The owner of that company declined my offer of some free marketing advice, so I started my own company in competition. The game-changer was taking the service from paper to digital, making HomeExchange one of the first online communities in the nascent sharing economy.  In 2006, the romantic comedy “The Holiday” propelled home exchange into the spotlight. The success of the movie was a booster for the company, which started to become profitable.  The same year, I sold Fairway Salvage to focus on HomeExchange.

From day one, I ran the company from my home near the beach in Southern California, never from an “office”. It was a conscious decision that when building the Team, I recruited Reps, Customer Service, and even my Partners exclusively from our community of Members. I figured they would be satisfied users who could relate personal experiences and would know everything about the home exchange process with almost no training.

To help our 60+ Team members (who all worked remotely around the world) bond together, I invited them every year with their families to a half-work, half-vacation retreat somewhere fun, usually on the beach… Evian, Croatia, Greece, Biarritz, Hermosa Beach, Myrtle Beach, Mt. Tremblant, Taormina, and more! With the input of my Team and partners, HomeExchange continued to grow until we sold it to a competitor in 2017.

When you sold HomeExchange you were hitting 70. What was next for you?

I was happily retired for 6 months, then a new idea kicked in. I am a networking guy, I’m always looking for ways to connect people. My new website, VacationPropertyPartners.com connects two families to partner to split the cost and enjoy the benefits of a vacation home. We “hold their hands” until they buy the vacation home together.
Besides VacationPropertyPartners, I make myself available to help business owners with their marketing strategies. I am an active member of the Rotary, where I contribute to 3 to 4 projects. As an ex-Navy officer, I am part of an initiative that helps veterans re-enter civilian life. I am also active in an investors’ group focusing on startups.

Do your professional engagements support other aspects of your life?

Totally. I’ve made a conscious effort to not only keep a balance between the time and energy devoted to the professional and personal areas of my life but to use each of them to enhance the other. Terry and I love to travel and I actually chose to concentrate on HomeExchange because it allowed me to create more opportunities to do so for business and pleasure. For me, learning, meeting people from around the world, building a successful business around a product, culture, team, and members that I believe in, have all been incredibly satisfying.

Along the way, I’ve developed some habits and rules I try to follow:

  • Keep my work, personal life, and health in balance.
  • Prioritize my tasks so I know what I want/need to do each day/week/month/year. Sometimes “Go to the beach” is on the list. It’s OK to get away from the computer for a while.
  • Appreciate my customers and try to keep them happy.

I’ve got 5 long-term priorities… “The journey of 1000 miles”  that I’m taking the first steps on:

  1. Appreciate my wife and always try to make her happy
  2. Do what I can to stay healthy
  3. Launch my new website, VacationPropertyPartners.com
  4. Write (or dictate) a memoir
  5. Finish my long-in-process (only 35 years) book about the personal decision-making process. Becoming aware of how you make personal and professional decisions, however big or small, is a super-power.

What is your definition of success and how would you evaluate your success on a scale from 1 to 5?

Definitely 5/5. My insight into how and why I’ve made the choices I’ve made allows me to accept and feel comfortable with what I’ve done.  I accept the result of choices and actions that I’ve made along the way, given my expectations of the risks and rewards, as well as the work, time, effort, and sometimes money I’ve followed through with.

Life is good. Every night I go to bed grateful and excited for another day.

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Embracing the Mid-Life Riser: Redefining Success in the Second Act of Your Career

Embracing the Mid-Life Riser: Redefining Success in the Second Act of Your Career - Alexandra HumbelAlexandra Humbel

Studies show that, long before our 50th birthday, we want to work differently. If conditions are met, we are happy to work longer, even beyond the official retirement age.  For most of us, the retirement cliff does not work anymore.

For some, the perspective of retirement is attractive. It gives hope for a better, more relaxed future, with plenty of time to do the things they love. So why do you feel a tingle in your stomach from the perspective of being “out” at a given date? As a skilled professional, are you a product with an expiration date? Do your competencies vanish at sixty-something? Does your appetite to contribute dry out the day you have covered the legal number of quarters? The truth is, there is an abyss between how people see and feel themselves, and the mandatory path they are herded into.

Another deadly effect of the standard retirement age is that, if you happen to be in the labor market after 50, you enter an undescribed grey zone. Just a few years earlier, you were a searched-for, high-potential professional. You worked your ass off to improve your skills and climb the ladder. But for some reason, you are starting to hear things like “too expensive”, “lack of technology skills” and all sorts of polite variations of “too old”. The rich CV that you hold like a trophy is becoming a burden. You catch yourself shortening the “Education” and Early jobs” sections. You avoid putting dates in front of milestones, especially the ones from the past century.

It does not have to be this way. Between a full-time, highly competitive rat race, and a life of leisure, there has to be something that works for you. This something is not published as a job opening. It requires some serious work to figure out what your next step is, and the sooner the better. Seniority at work and experience of life are blessings. But in the perspective of creating something entirely new and highly subjective, these assets can stand in your way. Beliefs and motivations that have helped you get to a point of success may not be that useful to create a fulfilling second act. Some parts of yourself have been extended and nurtured to get you where you are. Some parts, on the contrary, have been ignored. Now is the time to acknowledge them. Now is the time to activate these talents and evaluate a more integrative new life project. Maybe you crave meaningful work, maybe you want more impact in your engagement. And likely, you value your health, you are more aware of your personal needs and you long for and a better work-life balance.  “Think big” is a concept to re-visit with an open mind. “big” is not the opposite of “small” but the opposite of “conventional, one-size-fits-all, black-and-white, finished”. Opportunities for an unconventional, fulfilling second act of life are out there, invisible to the eyes which have not been opened, yet. And this is great news because the world needs your experience and your talent.

Are you ready to become a mid-life riser?

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COVID-19: 7 Things to Rediscover While in Home Confinement

COVID-19: 7 Things to Re-Discover While in Home Confinement - Alexandra HumbelAlexandra Humbel Coaching

While are all gradually assigned to stay at home, due to containment measures, experiences differ considerably according to our personal situations. For those who have no kids at home, the sound of silence can be vastly disturbing, and loneliness painful. Here are 7 simple things to re-discover while in home confinement.

1. Binge-read

Groucho Marx once said: “I find television very educating. Every time somebody turns on the set, I go into the other room and read a book”. Netflix is not the only growing value boosted by COVID-19. Books are too. Even though you are in home office mode, the time freed by the absence of commuting is yours. Precious extra time, scarcely available even during weekends, that you can now enjoy in the comfort of your home. The only problem is to give yourself permission. Does it feel better if someone else does? Famous author George R.R. Martin said: “A reader lives a thousand lives before he dies… The man who never reads lives only one.” That’s enough for me.

2. Fix the kitchen cabinet door

It is interesting to see one’s own home in a new light. Not weekends’ light. Working hours’ light. For some reason, disturbing realities are suddenly claiming your attention. The stain on the living room carpet. The pile of dusty magazines you will never read (unless today is the day? See point 1) and the sofa which cringes each time you sit. You think: “I’m on home office, I am not supposed to tinker.” Sure, you are not. But consider this: At the office, you would take more pauses than you even know. Chat at the water cooler. Walk 10 minutes to join a meeting in another building. Wait at the meeting room door until occupants evacuate. Minutes of unproductive time add up during an ordinary workday. So technically, you are entitled to a pause. Optimize your break. And fix the damn kitchen cabinet.

3. Love grocery shopping

Who would have thought, that grocery shopping would be the highlight of your day? Now that you get one permission a day, you are not going to miss that chance. Going to the closest supermarket becomes a secret expedition with a purpose. Officially, to fill the fridge. Secretly, you are on probation. Appreciate every moment. Breathe the air on your way to the store. Walk every alley. Pick up your favourite yoghurt flavour. Ponder to buy tissue paper and instead mentally start a shopping list for tomorrow. On the way back, resist the temptation to go for a road trip in a steal-blue cabriolet, hair in the wind, “Thelma and Louise” style.

4. Experience slow motion

Seriously, how can days be so long? When locked at home, time stretches in a bewildering way. The uneasy feeling starts with the radical offset between our usually speedy, efficient, “let’s not waste a second” self and the reality of our limited and quiet space. The truth is, should you not slow down, you would soon be bouncing on the walls. The strange combination of limited space, extended time and deprivation of buzzing sounds of life are profoundly disturbing. The interesting outcome is that your productivity is not diminished. Your useless agitation is.

5. Meet your neighbours and bow

Relationships between neighbours can be awkward, especially in big cities. We salute each other politely and engage in some small talk when inevitable (elevator). COVID-19 may change the dynamics. If you are confined at home so are your neighbours. Chances are, you will meet on your way back from probation (shopping). This is when your neighbours feel closer, even buddies. Brotherhood stops at the regulatory distance to avoid contamination, but still, the ice is broken. You share the news, exchange survival tips and promise each other a giant pot-luck dinner when it is all over. Then you bow and go home.

6. Re-discover the phone

With the predominance of texting, we totally forgot that in a not so distant past, we called each other for everything and nothing. The phone ring was intrusive, listening to messages a chore and calling back obligatory. With texting, we freed ourselves from a nuisance, but we lost two essential things along the way: the human voice, with all its nuances, that emoji will never replace, and conversation, in the sense of a musical improvisation, where two people pick up on each other’s words and tone of voice. While we do converse in writing, many notes are lost along the way.

7. Ask “How are you doing” and mean it

A conventional expression of civility, which in normal times, does not require an actual answer, is now reloaded with a ton of meaning and intention. Because now, you do want to know how your people are doing in the global pandemic world. You care for cousins you see once a year, friends from college and ex-spouses. You care enormously for your grandparents and elder relatives. You care for colleagues, in other countries, that you never met but who became, in just a few days, brothers and sisters in arms against the virus. You listen to the regretted Stevie Wonder “I just call, to say how much I care”.

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