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

Career Transitioning, Emotional Intelligence

Are you unhappy at work? Be aware of the Sunk Cost Fallacy

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” Book Depositary Link
Kahneman, D. “Thinking, Fast And Slow Book Depositary Link
Ariely, D. “Predictably Irrational” Book Depositary Link

25/03/2022/by Alexandra Humbel

Bravo Romeo, The Mediterranean and Me

Success Stories

Alexandra Humbel

When I talked to Benoit, I was counting on a video conference to make our conversation more lively. Given the limited reception, I had to content myself with a phone call. But this is a call I will never forget. Thinking about it, I can still hear the see’s chop and feel the Mediterranean breeze on my cheeks.

Benoit has been sailing the Mediterranean for 3 months. His trimaran Bravo Romeo (named after his initials) is at anchor, safely nestled in a bay of a small island of the Peloponnese. Which island? He is not sure. He knows he is safe here, alone on his boat, waiting for a weather window to open, so that he can sail about 48 hours the Ionian sea to Athens. From there, Benoit will pursue his route West across the Mediterranean into colder waters of the Atlantic, then up North to his destination Lorient, France. There, he will have some work done on the boat to be ready for the upcoming season.

Since we can’t see each other, I ask Benoit to describe the scene. He is sitting on his deck, facing a beautiful wild cliff. The water is crystal clear. The sunset is ridiculously gorgeous. Earlier today, he fiddled on the boat, read a book, chatted with his family over the phone, checked the weather report, and went for a long swim with his top-of-the-art diving fins. He is trim, tanned, he feels fantastic. He will have crisp fresh fish for dinner. What else? Benoit is not on vacation. He is working actually, or rather, enjoying fully the “why” of an all-but-obvious change of career. Ready to dive in with me?

What did you do before?

I was a leader in the media industry, with an entrepreneur mindset. I was an Executive Director in TV and production groups. I launched more than 12 TV channels. I created 3 companies that I sold. Lately, I was hired by a big media group with a mission to build teams, create content and make units profitable. Then, when I delivered that, new acquisitions happened, again and again. Every time, all the work had to be done again from scratch. In 8 years, I had 5 successive email addresses, without technically changing jobs. I am OK with hard work, I was always fully engaged, and I truly loved being part of these professional adventures. At some point though, it became clear that I was dedicating my life to creating value for shareholders, but I was not actually building anything for myself. When I reached 50 years old, I realized could not do this any longer, even for hefty salaries. I was also aware that, in my age group, it would be difficult to find a new job if I had to. It was brutal, but a salutary wake-up call. I decided to take my destiny in hands.

What triggered the change?

I have been sailing all my life, as a hobby, becoming an instructor at the age of 17, and performing in many competitions. As an amateur skipper, I took family and friends to Corsica, Greece, and other destinations. I thought: “the clock is ticking. Today I can do it, physically and mentally. Make my hobby my work. Earn my autonomy through a job I am passionate about”. I took a year to test the waters, study the market, assess the demand. And to answer questions: Is this what I want to do? Do I enjoy it?

How did it go?

I decided to go full speed and invest.
I got some serious training. I Joined the Royal Yachting Association training at Blue Sailing graduated as a professional skipper.
I bought a boat. I have become a mechanic for maintenance and small repairs. I learn something new every day.
I pay for my professional insurance. I am a company owner in many ways.
Now I feel “in the jaw of launch”. There is no way back.

What did you learn about yourself?

This new adventure put me in a state of fierce challenge, as when I was 30.
At this age, I had a well-paid executive job in the N°1 French media group. The CEO came to my office and asked: Do you want to launch a new TV channel? I said yes, without experience, and before I knew it, I was in charge. At the time I had this fearless confidence, which may have been somewhat carelessness too. Usually, after 50 years old, you are more prudent. You become risk-averse. Instead of that, I am buying a boat. Bam. Now I am experiencing this rage to win again, and it feels good.

What were the hurdles?

I wish I had got more expert advice when I bought my boat. I did not anticipate some problems that I had to fix afterward. If I meet someone in a similar situation, I will offer my competence to help her make educated decisions.
I also find it hard to be away from my family for long periods of time. We communicate a lot, but still, it may be the most difficult aspect of my new life.
And I am uncertain: Will my business be successful in the long term?

Who are you now?

When I sail, my decision takes its full meaning. The wind, the sea spay, setting sail, I knew all of this. But knowing that I am sailing my own boat, which is also my business, I shout for joy, I sing out loud. The reward is proportionate to the effort. I don’t have any regret. I love the adventure. Even though I wish I had done some things differently, like buying my boat, I don’t look back. I adjust my business plan, and I am getting ready during the winter for the beginning of the season in March 2022. I have found again this mindset, which is 100 times better than feeling obsolete and vulnerable in the corporate environment.

Your advice to people who want to change careers?

After a lifetime of challenges, when your career has to shift, you have lost your ability to fight, when you need it most. Nobody is prepared. You must be ready to fail. My choice is to take this risk.
If I fail, it will not harm me.
Because I am grateful for having tried. When I turn 70, I will not say “I could have done it, but I did not”. I am 200% aligned with myself.

Do you want to know more about Benoît Runel? Check his website here.

23/01/2022/by Alexandra Humbel

Career Transitioning: 10 Things I Wish I’d Known Earlier (Part 2)

Career Transitioning

Alexandra Humbel Coaching

This is Part II of my previous article about what I have learned, having experienced three career transitions and helped numerous professionals play a successful second act of life. I hope you enjoy the read.

6. The only approval you need is yours

Beautifully expressed by Amanda Gorman, the need for approval is one of the most common hurdles that may stop you in your momentum. The minute you share bold, ambitious dreams for yourself, you will see a number of red flags raised around you. Well-intentioned, loving people in your life will instantly reject the idea that you may get lost in ambitious and risky projects. They want you safe, and the status quo is largely safer than… anything else. Red flags will come from all directions. Colleagues, friends, and family members may sense an unavowable pang of jealousy at your renewed aliveness. Don’t take it personally, don’t be impressed.

7. Big dreams don’t make you a dreamer

The biggest red flag, though, is in yourself. It is cultural. People with dreams are dreamers. Dreamers are no achievers. This idea was drilled in your subconscious at an early stage, and you will find it, sure enough, on your way to a new career. Don’t buy the simplification. Rather engage in honest exploration: What is really important to you? What does your future, the one you crave, look like, taste like? What is your own definition of success, from now on? Does it encompass every aspect of your life? Does it bring value to you and the people around you? What would be the markers of your future success? The more aware you are of what you really want and why, the most enticing your vision is, the better. As the genius dream architect Walt Disney said: “If you can dream it, you can do it”.

8. Luck is when preparation meets opportunity

How many times this week did you hear yourself say “She is so lucky, to get this job” or, about yourself “I was lucky to meet this person”. By default, we tend to attribute good things happening unexpectedly to luck, whatever this word means. Abundant scientific literature shows that lucky people have their own way to attract luck, in doing two things: They put all the chances on their side, and they open their senses 360° to allow happy coincidence to happen. If you want to share a fantastic business idea with a very searched after person, you may want to make sure this idea has value for the person, refine and rehearse your pitch until it is irresistible, get all the intel you can about where this person may be hanging out, and keep in mind that if your idea is truly great, it will find its way to the real world. With or without this person.

9. It is so cool to go back to school

A current cause of stress for career transitioners is the necessity to get extra training. Will you be able to learn as fast as you used to? Is your brain capable of memorizing new knowledge? How awkward will it feel to sit on a school bench at your age? What will your ex-colleagues think? How will you cope with homework, supervision, and exams? Most likely, all of these fears will materialize. Yes, you will feel intellectually rusted. Yes, you will have to deploy your best efforts to catch up. Yes, it will feel awkward sometimes. Yes, some well-intentioned peer will ask what the hell do you expect, getting back to school at your age. And yes, homework sucks. But the reward is invaluable. Your decision to be a student again is a gift you offer to yourself and an investment in your future. The process is fun too. Learning has its own way to pump up your spirit and upgrade your self-image.

10. You will never look back

Maybe the most important thing I which I had known is that there is no way back. More accurately, there is no desire to go back to square one. You are a creature of movement, like all living creatures in this world. The journey towards a fulfilling second act of life is bumpy and interesting. We talked about the inner reward of learning, and learning comes in many different ways. Questioning the status quo makes you more alive. Taking bold moves towards work and life that you love triggers renewed energy. And keep in mind that you might well become a source of inspiration for other people’s own journey into transition.

If you missed part 1 of this article, you can read it here.

13/11/2021/by Alexandra Humbel

Career Transitioning: 10 Things I Wish I’d Known Earlier (Part 1)

Career Transitioning

Alexandra Humbel

My mentor suggested that I write a post about the things I wish I had known earlier about career transition. I liked the idea and, based on my personal journey as well as my experience as a coach, I started with a half dozen points aimed at helping professionals get on the fast lane. I ended up with twice as many points, and the kind of long article I, myself, have a hard time digesting. Hence the decision to stick to 10 essential points, dispatched in 2 posts. This is Part I, I hope you enjoy the read. Part II is available here.

10 Things I Wish I Had Known Earlier About Career Transitioning.

1. You are not alone

Studies show that an increasing number of experienced professionals are undertaking a career change, and even more are considering it. Three-fifths of UK workers (60%) intend to make changes to their careers as a result of the Covid outbreak, an increase of seven percentage points since July 2020 (53%).*

So why does it feel weird and lonely? It is because nothing prepared you to handle one or several career changes in your life. Society tends to assign you a role, tied to a life cycle: In your junior years, you prove your competence. As you are getting experienced, you excel in your field. And then, what? You retire. While there is nothing wrong with linear career paths, it does not work for everyone. Probably not for you, if you are reading these lines.

2. Your skills are transferable – All of them

My clients who crave a new career are taken aback by the thought that their expertise might be lost when they change jobs. It is natural to take pride in those skills you have mastered over time. The good news is, you take everything with you on the journey. Those skills will manifest in creative ways, coming in handy to serve your goals while you are expanding in your new project. Interestingly, ancient or dormant skills will show up and prove valuable to handle new situations. Your brain creates new circuits while tapping into resources you did not remember you had. And this is particularly refreshing.

3. It is OK to be lost in transition

Describing career transitions as uncomfortable is an understatement. More accurately: Everything which made you feel grounded in social status is gone. Welcome to unchartered territories, where nobody is waiting for you with your name on a sign. No driver, no limousine. It requires courage to leave the familiar in order to become a new version of yourself. Uncomfortable, scared, and excited all together, highs and lows are in order. But, as Maya Angelou said: “We delight in the beauty of the butterfly but rarely admit the changes it has gone through to achieve that beauty.” The butterfly is you.

4. Money and time are no excuses

“I will do a job I really love when I have enough time, or money” (or both).

Does that sound familiar? Of course, these two factors are critical components of a decision, and critical metrics to monitor all along the way. Controlling your time and financial resources through a career transition will be essential to succeed. Be aware that the conservative, risk-averse part of you will always show up with these massive excuses that are the lack of (or the fear of lack of) time and or money. Or both. It is your call to let these fears be the master of you.

5. Nature is in constant change and so are you

“Nothing is absolute, everything changes, everything moves, everything evolves, everything flies and goes away”.

These lines written by the fascinating artist Frida Kahlo can be interpreted as words of regret and melancholy. Or, from another perspective, as the constant evolution of all things that allow rebirth, re-invention, possibilities, relief, reboot, rejuvenation, and creation. When looking back at your career, you may take pride in what you have achieved, and, simultaneously, realize that this pattern is no longer fulfilling you. You can cherish your past achievements and look forward to what you are going to do next. This is not a lack of consistency in your choices. It is about the inherent nature of all of us, to thrive in movement or shrink in stagnation.

Continue reading part 2 of this post

*Aviva “How do we live” Report, 2021