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.
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