June 2024

Imagine this, someone studied finance for 4 years. After 2 years of traineeship, this person realizes it is not what they want their lives to look like. They don’t want to wake up in 10 years and dread going to work. So this person has two options. Number one: to continue working the job they hate because they’ve invested time and money already (sunk cost fallacy). Number two: to build up some savings and quit the job they hate. Which one would you choose?

Sunk cost fallacy

Choosing number one in the previous paragraph is not that strange. There is a thing called the sunk cost fallacy. Asana describes this as

"our tendency to continue with an endeavor we've invested money, effort, or time into—even if the current costs outweigh the benefits." 

Now, this mindset can keep us down in many aspects of life. Think about it, when a business has made a big investment but after a while, it has been made clear that there is no profit to be made. It wouldn’t make sense to continue with that project. So why would you continue with a project in your personal life?

Don’t look back, you’re not going that way

The first thing people would do is regret the choices they’ve made. “Why did I choose that specialty? I am so stupid.” But, why would you want to look back? The time has already passed and there is nothing you can change. So have no regrets but also don’t hold yourself back just because you have made the “wrong” choice in the past.

Take what you need

The best thing you can do is learn from that situation. So what if you are choosing a different path now? You can take all the previous experience with you. In your professional career, you would be much needed in a different sector because you bring new knowledge to that environment. You see things from a different perspective and you add value to the company. You can take the experience and expertise with you and apply it to another field.

Allow space for other things to grow

Once you are ready to turn the page and try something new, you must allow space for it. That means you must let other things go to make physical and mental space for new opportunities to arise.

Image: Unsplash, Alwi Alaydrus

This blog post explains why having a high failure rate leads to success. Well, you might be thinking: “You don’t ever want to fail in your job” but out-failing your competition actually leads to more profit for your company for several reasons. Most of the content is inspired by Law 21 from Steven Bartlett’s book The Diary of A CEO

Ice skating

The ones who learned how to ice skate when they were younger remember that the first thing they teach you is to fall. You have to fall a couple of times on the ice to become comfortable with falling. The same holds in business. You first have to learn how to fail to do your job properly. Now there are two kinds of failures. The main difference is that you can come back from one failure and you won’t be able to return from the other failure.

No failure, no story

As much as we would like to think failure comes easy. Humans are wired to expect to do everything right the first time. But how boring would that be? And more importantly, if you don’t fail, you won’t learn anything. In life, you learn from your mistakes. Thomas Watson the former president of IBM said:

Every time we moved ahead in IBM, it was because someone was willing to take a chance, put their head on the block, and try something new.

Furthermore, how can you discover what the customer wants if you don’t experiment? We live in a fast-paced world where the needs of the customers constantly change. No matter your industry, you have to keep up. And to keep up, you need to try multiple things to succeed. For example, when a company is building a ‘new app. They won’t build the app immediately. First, they will ask the customer what they want, then they build a prototype. Afterwards, they go into the testing phase where they have many iterations. Eventually, the prototype has become good enough to launch. Even after the launch, you need to update that app because they continue improving the software.

Failure is invention

There is a page in the book: Diary of a CEO. Jeff Bezos explains why a high failure rate is crucial for a business. “One area where I think we are especially distinctive is failure. Failure and invention are inseparable twins. To invent you have to experiment. The difference between baseball and business is that baseball has truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1.000 runs. This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments.”

Are you curious about the other Laws in the book Diary of a CEO? Click here for my summary!

Source image: Unsplash, Getty Images