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iSSUE 8: Letting Go of Your Sunk Costs

25th April 2019

This month marks 5 years since I stepped away from the career I’d spent my adult life building.  Despite my unblinking conviction that Conker would be a success, walking away and letting go of all that investment of money, sweat, tears and my precious time was near impossible.

It turns out we are psychologically hardwired to honour these historic investments and stick it out, rather than see them go to waste.

Yet, your ability to let go of these ‘sunk costs’ will allow you to innovate and adapt to your current situation, empowering you with the freedom to be true to yourself.

 “I can’t walk away from all this now, look how much work and time I’ve spent getting here.”

In 2016 I was asked by The Guardian to tell my ‘start-up story’ to a group of folks who wanted to take the leap from their careers. During the lunch break, I found myself sat with a man who wanted to become an actor. This forty-something psychiatrist was leaving behind everything he’d built in his career to be an actor.

He explained that having worked with people of every psychological persuasion, he felt well prepared for his new venture. What’s more, in his words, “I’m a bit peculiar looking”. He was right. Unusually tall, lean and wiry, with long thin hair framing a gaunt and large featured face – he was brilliant looking, I’ll give him that. Straight out of Game of Thrones.

Given his ‘look’ and what I think was an Essex twang to his voice, I’d been quietly surprised to learn he was a psychiatrist. He didn’t seem a natural fit for the role. But as he explained, he’d been acting for years. Straightening his back and opening-up his shoulders he said, ‘’This is my psychiatrist’s voice’’, in soft and beautifully pronounced English that instantly made me feel the impulse to lie down and talk about my father.

I was impressed by his ambition. It felt childish – the sort of thing a 9-year-old would tell you. I loved that. He had that spark of optimism and, crucially, a freedom to let go of everything he’d built to follow a dream. 

As we talked, he shed light on why I’d found it so hard to walk away from the career I’d worked so hard to build, and why others choose to plug on regardless, ignoring the pain of a career that is making them miserable.

My actor friend explained that in the world of psychology, this feeling of obligation to crack on with and complete what we have already started is a result of our attitude to our ‘sunk costs’. In short, we are motivated to continue our behaviour or endeavour because of the time, money or effort that we’ve previously invested in it.

“I can’t turn back now, look how far I’ve come.”

Your sunk costs blinker you from the actual circumstances of the current situation; we either can’t see a more rational approach to take, or it’s as plain as day but we refuse to entertain it. You don’t want to think that you’ve wasted all that time and effort.

It also seems that our commitment to our sunk costs ties into our innate fear of failure. We think that we need to prove to ourselves and, perhaps more importantly, to others that we made the right decisions in the past.  I remember feeling exactly this way when I tearily revealed my unhappiness with my work to Emily one evening back in 2013.

Giving up on our sunk costs will prove that we made a mistake. And what’s more, this new venture is setting us up to the possibility of another dead end. The safe road is sticking to the status quo.

We fear regret so we ride a loser with the hope that things will improve.

Letting what has been dictate what will be, rather than what is the more rational strategy. If you take the time to think about that, it’s blindingly obvious how ridiculous that is.

This seems to me to be an exclusively human behaviour – to assign emotion to the past and hold onto the familiar social shackles of concern over what we believe other people will think of our actions.

You wouldn’t see this honouring of sunk costs in nature. The most successful species are those with the greatest ability and willingness to adapt to their current circumstances. It’s not the strongest species that survive, nor the most intelligent, rather the species that are most responsive to change, allowing them to optimise their current situation. I knew that biology degree would eventually come in handy!

Those with the greatest tenacity and endurance to get their heads down and get on with things will find that strategy eventually letting them down. 

Evolution is not some magic insight into what will be required in the future, it’s simply a product of taking advantage of the most effective strategy for today. Crucially, it relies fundamentally on letting go of your sunk costs and what has been. And whereas species have evolved over millennia, so frequent are our social and technological revolutions, we are required to evolve many times over the course of our lifetimes.

If I could choose just one skill for my children to navigate their future of an ever-changing and uncertain definition of a career, it would be being adaptable.  If you fail to be flexible to your environment, you will quickly find your opportunities and freedom disappear.

#conkerspirit