How to Rethink a Bad Decision: Transcript

ADAM GRANT: [00:00:00]
We've all dug ourselves into some holes that were hard to dig out of, especially at the urging of good friends.

ALEXIS: [00:00:06]
She knocked on my door to my room, which she never does. So I knew something was up and she was like, “Hey, we're a person down. Everyone's going to go. You're going to be so upset that you missed this.”

ADAM GRANT: [00:00:17]
That's my student, Alexis. This was the second time her friend asked her to go to a trendy new festival. So she couldn't turn her down again. But as soon as she said, yes, things started to go downhill

ALEXIS: [00:00:29]
Not only did my friends not have any details about the event, but even the contact that we made with the organizers of the event seemed pretty sparse on the details as well. So I was already feeling a bit … uneasy … about what was happening, but it felt like I'd already made that public commitment to our group to go. We'd already paid for our flights to Miami. And those were non-refundable

ADAM GRANT: [00:00:54]
Even as Alexis and her friends were boarding the plane, things kept getting worse.

ALEXIS: [00:00:59]
So we got on the plane, which: Strike three. And I was on my phone because I had found a Twitter account saying that people had started arriving and didn't have housing and didn't have any food.

ADAM GRANT: [00:01:11]
It turns out that festival, her friends were obsessing about was one of the biggest frauds of 2017: Fyre Festival.

NETFLIX CLIP: [00:01:18]
“All of these models like in the Bahamas”
“The most insane festival the world has ever seen.”
“Island getaway turned disaster.”
“It became very barbarian.”

ALEXIS: [00:01:29]
When we got to the Island, of course, as most people know now, nothing was as promised. We [00:01:36] were not in luxury resort style. We were just in pretty damp tents, basically was spending the whole time there trying to figure out how to get out.

ADAM GRANT: [00:01:47]
There's a name for what happened with Alexis. It's called escalation of commitment to a losing course of action. It's when you find out you've made a bad decision, but instead of cutting your losses, you double down. You invest your [00:02:00] time, your money or your identity and decisions long after it's become obvious that they're dead ends. You may not have ended up at Fyre festival, but I'm willing to bet that you've escalated your commitment to plenty of bad decisions. So how do you pull the plug sooner?

I’m Adam Grant, and this is WorkLife, my podcast with TED Audio Collective. I’m an organizational psychologist. I study how to make work not suck.
In this show, I’m rethinking how we work, lead, and live. Today: why we get trapped in bad decisions, and how you-- and your workplace-- can get unstuck.

Thanks to Morgan Stanley for sponsoring this episode. Let's start from the beginning.

BARRY STAW: [00:02:51]
My father -- who's one, the very earliest people who started a discount store, and it was very [00:03:00] successful and he started a second one and a third one until he had a chain of stores

ADAM GRANT: [00:03:05]
In the late 1950s. Barry Staw was a teenager in Southern California. And for almost a decade, he saw his dad grow his business to 15 stores.

BARRY STAW: [00:03:13]
And he was really doing well, and then the large national companies, they would just open a store right across the street, practically and undercut all the prices. They literally drove all the independent people, all the small guys out of business

ADAM GRANT: [00:03:29]
By then, Barry was in his twenties watching his father's business decline. It was slow and painful.

BARRY STAW: [00:03:35]
He refused to give up. And so he kept putting more and more of his own personal money into the business until finally he had no more personal money left and it ended up closing up. So that was something that was really indelibly engraved in my psyche.

ADAM GRANT: [00:03:54]
Fast forward a few years. And Barry was watching the American government fall into the same trap.

BARRY STAW: [00:04:00]
It dawned on me that the Vietnam war was very similar to my father's experience, that we kept investing more and more. We kept having larger and larger losses, but we kept as a country refusing to admit that this one was unlikely to succeed.

ADAM GRANT: [00:04:16]
Today Barry is an organizational behavior professor at UC Berkeley, and he coined the concept of escalation of commitment.

BARRY STAW: [00:04:23]
Escalation of commitment occurs when you're in a situation in which it is possible to add more resources to a course of action or a prior decision in order to rectify a loss.

ADAM GRANT: [00:04:36]
Barry is the world's leading expert on this problem, but even he can't help, but fall victim to escalation from time to time.

BARRY STAW: [00:04:45]
I've had some old cars and then when the warranty expires, then there's a bunch of little things start going wrong. And then a little bit bigger things going wrong and then bigger and bigger. And I have been agonizing about whether to actually sell it [00:05:00] and get rid of it or put more money.

ADAM GRANT: [00:05:01]
It even happened in his marriage.

BARRY STAW: [00:05:05]
I probably hung on. Longer than I should have -- went through years and years of marital therapy.

ADAM GRANT: [00:05:11]
Barry, in a moment like that, do you not realize you're in an escalation trap?

BARRY STAW: [00:05:16]
I realize I'm in it, but I still realized that it Is … a very difficult situation. And maybe I can tell myself it might be a lie that this might be one of the exceptions in which it actually might be rational to invest more in the situation.

ADAM GRANT:
If this can happen to an expert on escalation of commitment, what hope is there for the rest of us? I'm painfully familiar with this phenomenon myself. Like the time I wrote a whole book instead of a book proposal and had to throw away over a hundred thousand words and start over, or the time I spent months trying to change the behavior of a toxic team member. When I should have just let them go.

Escalation of commitment happens in every workplace. Think about the times when you over-invested in a failing project, stuck around in a miserable job, struggled to walk away from an abusive boss or a toxic culture -- or even away from work, poured your heart and soul into a romantic relationship that clearly wasn't working. So why don't we know better? Why do we fall into the same trap again and again, pouring more and more of ourselves into a bad decision. Even when all the evidence points us the other way? The most common answer people give -- sunk costs. We've already invested our time or money, and we want to do everything in our power to get a return on that investment. Just like Alexis at Fyre Festival. Sunk costs are a part of a story, but decades of research show that the most powerful forces aren't economic -- they're emotional.

BARRY STAW: [00:06:55]
Escalation is where people make errors because [00:07:00] of their ego and their emotions.

ADAM GRANT: [00:07:02]
It's not just a cold calculation of the loss of money or time. It's the hot pain of threats to our sense of self.

BARRY STAW: [00:07:10]
They're afraid to admit a mistake and they end up justifying a decision to themselves.

ADAM GRANT: [00:07:17]
In a case like this, I'm trying to protect my ego to convince myself that I didn't make a bad choice. I'm also trying to protect my image to convince others that I made a good choice because otherwise ...

BARRY STAW: [00:07:31]
I might end up having people think that I'm not a good decision maker. I'm a loser. I'm not somebody who's to be trusted.

ADAM GRANT: [00:07:38]
The more we've invested in a decision, the more attached we become to it. And the more attached it becomes to us.

BARRY STAW: [00:07:47]
This is where an awful lot of the real disasters happened in terms of business decisions. People don't want to admit errors because their work identity has become linked with the course of action. People may even label the thing saying, “Oh, that project, that’s Jim's baby” or “That's Mary's project,” and you become so identified with it that, if the project fails, your career is down the tubes.

ADAM GRANT: [00:08:16]
Ironically, the various steps we take to defend our egos and images end up making us look worse. One of the places Barry studied this was the NBA. You would think coaches would give the most playing time to the best players.

BARRY STAW: [00:08:30]
Like how many points you score, how many steals you make and how you rebound and so forth. And there is some effect of that obviously, but there's also a very significant effect of how high you were in the draft.

ADAM GRANT: [00:08:44]
Even if top draft picks weren't playing well, coaches still kept them in the game. They'd made a big bet on this guy.[00:08:52] So they wanted to prove they've made the right decision and hadn't blown millions. Beyond ego and image, there's another emotional [00:09:00] factor that fuels these kinds of escalation traps: Anticipated regret. You're worried. You'll wish you hadn't pulled the plug. In the NBA. Managers were afraid of giving up too soon on a potential star.BARRY STAW: [00:09:13] They’re thinking about maybe trading a particular athlete to another team, but then they're thinking, “Oh my God, he's not done very well with us, but what if he suddenly blooms, but I'm watching him on the other team? Then I'm going to feel even worse.”

You probably know that voice inside your head. “What are you doing? You can give up too soon. Everyone's going to think you're a quitter and a failure, a failure. You won't find a better opportunity.” At some point. You just have to say “It's over! Let it go.” But that's easier said than done. Just ask Janice Burch.

JANICE BURCH: [00:09:46]
I was so scared. I don't ever remember being so scared to do anything then to tell my supervisor that I wanted to quit.

ADAM GRANT: [00:09:57]
Janice has one of the most practical strategies I've seen for escaping escalation of commitment, but she didn't discover it overnight. She'd been working at a software company for a couple of years. And for almost that entire time, she was unhappy. But she couldn't bring herself to leave. She'd started out with high hopes.

JANICE BURCH: [00:10:15]
When I saw this job advertised, I definitely felt like this a hundred percent is my dream job. The company was well-respected. The benefits were amazing.

ADAM GRANT: [00:10:27]
This customer support job was perfect for Janice.[00:10:30] At least on paper. It offered room to grow, personal responsibility for managing a team, and a culture of flexibility and freedom

JANICE BURCH: [00:10:38]
I guess It’s kind of be like invited into what seemed like this, like exclusive club of like awesomeness.

ADAM GRANT: [00:10:45]
But pretty soon reality crashed the party.

JANICE BURCH: [00:10:48]
I would say the honeymoon was over for me when I went to a meetup and I had found out that someone that I, I had been interviewed by and like really admired had been, let go. And not very many people knew about it, and everyone was like, upset about that. And I guess it's just like, you know, in regular relationships, when you talk about the honeymoon phase, you always say, “Oh, all these red flag”s and you're just like, “Oh, well I just, I couldn't see them because I was just so blinded by love.” It's kind of the same thing.

ADAM GRANT: [00:11:21]
A few months into the job. Janice had some concerns and she heard other people complaining, but she didn't feel that she could speak up. She also felt that the company had a serious lack of diversity. Jenna said that when she started, she was the only black employee and that did not improve much over time. But she invested so much in this job. So instead of rethinking her commitment, Janice escalated it by investing more energy and time and stayed in the job for two more years, she told herself that since her coworkers were reluctant to speak up, she might be able to change the company.

JANICE BURCH: [00:11:57]
I’m going to be the person to like jump in and like make this change where, you know, others, you know, maybe hesitant or whatever it is like, I'm going to be the one. And so I was going to, like, take it and try to help.

ADAM GRANT: [00:12:11]
How did it feel putting so much energy into a job and a culture that you knew deep down was not right? JANICE BURCH: [00:12:19]It's almost like you're gaslighting yourself. Like you're, you're telling yourself, “No, no. Like all of the evidence around you is not correct. There's just, you just have to do this one, one little thing or do more.” Barry Staw knows the feeling

BARRY STAW: [00:12:34]
At a certain point. And the evidence is overwhelming. You have to ask yourself, “Is this grit or is it blindness or is it just my own ego that's just getting in the way?”

ADAM GRANT: [00:12:45] When you reach that point, you might find that an antidote to escalation of commitment is another commitment, but to go the opposite way: A plan to pull the plug.And Janice created a clever strategy -- A one-year exit.

JANICE BURCH: [00:13:01] I basically created three simple steps. “These are the things that I'm going to do to like actually build myself up and give myself the courage to leave this toxic relationship.” The first point was that I was going to build relationships outside of the company. So try to like meet up with people and just build relationships with people who could help me and whatever my next phase of life was going to be.

ADAM GRANT: [00:13:31]
Second on the list: Stop engaging in what Janice calls, “energy zaps.”

JANICE BURCH: [00:13:37] Yeah. Energy zapps, not interacting with, you know what I call it, problematic people to go back to the relationship comparison. I guess I like became emotionally unavailable at work.

ADAM GRANT: [00:13:48] Her third step was to leverage her company's perks to broaden her horizons.

JANICE BURCH: [00:13:52] It's basically what you're just trying to max out what was available to me then. One in particular is that we got to go to conferences. And so culture was obviously something that I was really interested to engage with. So I'd go to our culture conferences and again, try to build relationships with people.

ADAM GRANT: [00:14:12].
Yeah, so it almost sounds like you had a strategy for disinvesting yourself.

JANICE BURCH: [00:14:18]
Yeah. That's exactly what it was.

ADAM GRANT: [00:14:21]
And about a year after she made this plan, she left.

JANICE BURCH: [00:14:23]
When I look back and I think about why I held on so much to that job and that position. I think it's because like deep down, I thought like this is as good as it gets.

ADAM GRANT: [00:14:36] The beauty of a one-year exit plan is that it gave Janice time to explore different paths, and to detach emotionally instead of ripping off the band-aid. Janice now runs two coaching firms, “Work, Soul Flow” and “Before Diversity.” Her main regret is that she didn't make her exit plan sooner. One of my favorite ways to avoid that mistake is to identify your deal breakers. Just like you probably have a list of non-starters in a romantic partner, you can create a similar list for what's unacceptable in a job, a boss or a culture. If you figure them out up front, you can keep yourself honest. I've often advised students to do this and they report that it helps them reevaluate their decisions and avoid escalation. But what if the escalation is bigger than you? What if your team, your boss or your entire company makes a habit of staying the course -- a very bad course? More on that after the break.

AD BREAK: [00:15:39] - [00:20:01][MUSIC]
PART II

ADAM GRANT: [00:20:18] Extracting ourselves from our own bad decisions is hard enough. Our ego and our image are in danger. But escalation is even worse when it happens in entire teams or organizations. You know, Kodak was the industry leader in photography. They pioneered research into the digital camera, but then they shelved it and escalated their commitment to film.

Bad decisions -- and then the decision to stick with them -- don't happen in a vacuum. The culture and structure of an organization can propel us straight into escalation of commitment. But research shows there's tangible steps organizations can take to protect us [00:21:00] to make it easier to take a clear-eyed look at the course we're on, and even changed direction.

Barry Staw identified. One of those steps in research on banks.

BARRY STAW: [00:21:09]
It's very common for banks to loan money and to, and to - and to lose money!

ADAM GRANT: [00:21:12]
Banks, fall victim, to escalation of commitment when they keep expecting people who have defaulted on loan payments to come through, instead of writing them off as uncollectible. Barry and his colleagues analyzed data from nearly all the banks in California over nine years.
[00:21:28] They found that banks were more likely to de-escalate their commitment to problem loans after senior executives left — the executives who had approved the original loans were motivated to keep justifying their decisions. When new executives took over, they quickly recognize that someone who's missed 17 payments probably isn't going to come through at number 18.

BARRY STAW: [00:21:47]
If you move the loan decision from the original people who made the loan, just like going to an objective third party, it's more likely that [00:22:00] you will start to recognize the losses.

ADAM GRANT: [00:22:02]
So if I'm a CEO, are you saying I should fire all my executives so that people are finally willing to cut their losses?

BARRY STAW: [00:22:09]
Well, I wouldn't maybe go that far

ADAM GRANT: [00:22:13]
Yeah. If you don't have turnover inside your organization, you at least need an outside perspective.

BARRY STAW: [00:22:19]
Somebody who can look at things with a kind of a cold eye and say, This is what I would do if I were facing this situation.

ADAM GRANT: [00:22:28] This is the first of three important steps organizations can take to prevent escalation of commitment: Separate the decision from the initial decision maker. There's an organization that does exactly this. It's X, also known as Google's Moonshot Factory. It's where inventors and entrepreneurs build and launch new projects that seem out of this world. Like self-driving cars and balloons beaming internet to remote communities.

KATHY HANNUN: [00:22:55]
My name is Kathy and I was formerly a rapid evaluator at [00:23:00] X

ADAM GRANT: [00:23:00]
“Rapid evaluator” -- Is that a job?

KATHY HANNUN: [00:23:03]
It is a job. Rapid evaluators at X. Our role is to find new opportunities for X. So what are the things X should work on next?

ADAM GRANT: [00:23:11]
Are you a rapid evaluator in other parts of your life? Like, do you, do you show up at a restaurant and immediately know what to order?

KATHY HANNUN: [00:23:19]
[Laughs] I think that a lot of my rapid evaluative tendency is just consumed in my professional life so much that in my personal life, I'm like,
[00:23:31] To my husband “Can you please just, can you decide what we're going to have for dinner? You, you decide. I'm fine with whatever.”

ADAM GRANT: [00:23:39] In other parts of Google and Alphabet, escalation has been a problem. They took eight years to abandon their failed attempt at social networking. Remember Google plus? And they waited too long to recognize the Google Glass was not going to make it as a consumer product. So at X, rapid evaluators, like Cathy, were tasked with offering an outside perspective on bold ideas, looking for reasons to pull the plug. Even if the pet project in question was their own. So Kathy would always ask

KATHY HANNUN: [00:24:09]
“What is the thing that will bring it down?”

ADAM GRANT: [00:24:12]
Back in 2013, Kathy learned about an idea that could disrupt the oil industry. [00:24:17] She'd been looking for a climate project, so she got excited about this new study she read.

KATHY HANNUN: [00:24:22]
“What if we could further this research, figure out how to commercialize it and then combine that carbon dioxide with renewable hydrogen to make hydrocarbons (which is just a scientific way of saying ‘make fuels out of it’)?

ADAM GRANT: [00:24:37]
Wait, so you're trying to turn seawater into fuel?

KATHY HANNUN: [00:24:39]
Exactly, shorthand, Yes. That's what we would say, it's turning seawater into fuel.

ADAM GRANT: [00:24:44]
Kathy immediately saw this as a crucial environmental breakthrough for X to fund. So she went all in. Foghorn. That's what they named the project - it was going to be her baby. But as someone whose job was to protect other people from escalation, Kathy [00:25:00] knew she needed to be weary of it at the outset.

KATHY HANNUN: [00:25:02]
Is it truly as good of an idea as it seems?

ADAM GRANT: [00:25:04]
It can take years to find out whether a project has succeeded or failed. Luckily, Barry Staw and his colleagues have discovered a workaround. Long before you know the outcome of a decision, you can create metrics to evaluate the quality of your decision process.

BARRY STAW: [00:25:20]
And process accountability is that you should be accountable for making a reasonably good decision. Not in, in terms of how it turns out, but that you've been reasonably conscientious in terms of assessing alternatives and not biasing the data.

ADAM GRANT: [00:25:40]
Process accountability. That's the second step for avoiding escalation.

BARRY STAW: [00:25:45]
The important thing with this is setting your targets and your benchmarks in advance.

ADAM GRANT: [00:25:50]
One way of holding people accountable for a good decision process is to establish kill signals.

KATHY HANNUN: [00:25:59]
A kill signal was a mechanism for keeping ourselves honest. So at the beginning of the project, we tried to think like, what could we see that would tell us, “All right, this just isn't going to work.” So in our case with Foghorn, we really wanted to make commercial fuel. We needed a path to be able to make it for under $5 a gallon because our thinking was If it's much higher than that, there just won't be a market for it.

ADAM GRANT: [00:26:26]
Kill signals are processed boxes to check. Gates you need to make it through in order to keep going.

KATHY HANNUN: [00:26:32]
Maybe your kill signal is “We don't want to have to tackle huge regulatory problems.”

ADAM GRANT: [00:26:36]
That seems like something every team should do in every workplace.

KATHY HANNUN: [00:26:40]
Yeah. I mean, even just thinking about “what would your kill signal be?” It tells you a lot about the problem you're trying to solve.

ADAM GRANT: [00:26:47]
It also seems like it's more, it has broader applications. So I should, I should take a new job and have a kill signal around “Okay. Here's what would need to happen in order for me to decide [00:27:00] that it's time to leave this job or time to walk away from this culture.”

KATHY HANNUN: [00:27:04]
I totally agree. It's almost like principles, right? It's like, what are my values and principles that I don't want to compromise on? And it's, it's very helpful to have some sort of moral compass or some sort of fixed point in terms of one's value system to guide you when the decisions become very fraught.

ADAM GRANT: [00:27:23]
So Foghorn gets the green light. Cathy sets her kill signal. For this project to be successful in today's market, they cannot go over $5 a gallon and they get to work.

KATHY HANNUN: [00:27:34]
We were tackling things, we're fixing them. It's great. But then we realized, just the pumping energy alone, to pump all the water you would need to get the CO2 out.
[00:27:47] Is too much, like it's an astronomical cost.

ADAM GRANT: [00:27:50]
Her kill signal starts flashing. She knows this is not good for the future outcomes of the project, but they're on a roll. [00:28:00] What if they invest just a little bit more?

KATHY HANNUN: [00:28:02]
It was like, okay. Yeah, pumping costs. That's a challenge. But like, look at all this stuff we're figuring out! I think we were making so much progress on making the prototype work better. That it gave us some hope.

ADAM GRANT: [00:28:16]
Hope. Even a sliver of hope can keep a failing project alive. So Kathy decides to send a message.

KATHY HANNUN: [00:28:24]
I just sat down at my desk at X and just wrote an email acknowledging “here was the vision and, here were all the amazing things that we accomplished, but here are the challenges and given where we are now and everything we've learned, I'm inclined to proceed by suggesting that this doesn't continue.”

ADAM GRANT: [00:28:47]
Wait, you shut down your own project.

KATHY HANNUN: [00:28:50]
I did. I recommended that it be shut down.

ADAM GRANT:
Who does that?

KATHY HANNUN:
Apparently I do. All it took was a spreadsheet. I just realized, the [00:29:00] numbers, like the dollar numbers that I would have to ask for to make meaningful progress, given all the challenges, combined with the risk that we would not achieve our goals, because of all of the complexity and the unknowns. Even with the $5 a gallon example, By when? Right? It's possible. We'll get there by 2050, but clearly that's not what the kill signal meant. It felt like wishful thinking, you know, it's like in my heart of hearts, I kind of knew it was more likely not to succeed. You know, there's a lot of opportunity cost for everyone and it just seems cleaner to shut it down.

ADAM GRANT: [00:29:41]
Kathy, wasn't just focused on her own goals. She was thinking about what was best for the team.

KATHY HANNUN: [00:29:45]
And coming up with the most honest assessment that I could think would put the team as individuals in the best position going forward, because no one wants to work on something that's not going to work.

ADAM GRANT: [00:29:58]
Research shows that when we consider our [00:30:00] responsibilities to others, we're less prone to escalation. Shifting attention away from our own egos and images and toward the greater good can allow us to make a more balanced assessment. To free people from ego and image concerns, organizations need to think differently about incentives; to make failure acceptable.

BARRY STAW: [00:30:19]
So even though the project hasn't worked out, if the person has been very diligent in looking at what the best prospects were, that person should still be rewarded and be given a good future in the company.

ADAM GRANT: [00:30:36]
That's a third step for de-escalation: Taking the stigma out of admitting a failure. X created an annual ceremony to recognize people who have the wisdom to pull the plug, because even if it wasn't the breakthrough they'd hope for their time and resources were still well-spent

KATHY HANNUN: [00:30:54]
That day is all about celebrating the projects that are no longer with us. And, um, recognizing them for everything that they gave X and just like how X has benefited from them. And I do think that it would be too much to say people are happy when their projects are killed or it's a positive experience. Certainly not, like, everyone is human, but at least it normalizes it.

ADAM GRANT: [00:31:22]
Yeah. Throwing a party to celebrate the value of a failed project. Kathy's boss went further.

KATHY HANNUN: [00:31:28]
He ended up giving us a bonus and yeah, you got

ADAM GRANT:
What?!-

KATHY HANNUN:
Yeah-

ADAM GRANT: [00:31:32]
You got a bonus for admitting that your project wasn't promising and shutting it down?

KATHY HANNUN: [00:31:37]
We did. It only solidified that culture that he was already creating.

ADAM GRANT: [00:31:41]
Didn’t that mean admitting failure though?

KATHY HANNUN: [00:31:44]
Well, my job as a rapid evaluator was to evaluate, and this was my evaluation, so, I didn't see it that way because it's like, if you punish failure and you simultaneously know it's inevitable, then you are creating an [00:32:00] environment where people are inclined to hide it or misrepresent it.

ADAM GRANT: [00:32:04]
Yeah. I mean, if, if you punish people for failing, they will do everything in their power to try to convince themselves and others that their project is not a failure.

KATHY HANNUN: [00:32:14]
And then they'll identify with the project and attach their ego to it in a way that's very stressful for everyone. And then it's no longer as possible to separate I'm a failure from this idea that I was pursuing, isn't going to work, which are two very obviously different things, but don't always feel very different.

ADAM GRANT: [00:32:34]
I - I'm smiling here because you just described that as if you've spent the past 10 years reading the psychology of escalation of commitment.

KATHY HANNUN: [00:32:44]
Which I can't say that I have, but maybe I've lived it a little bit.

ADAM GRANT: [00:32:51]
We don't need to celebrate failure. We just need to normalize it. What you're highlighting here is that if you had plunged more of your [00:33:00] time, energy, and resources into Foghorn, You might've missed out on a much bigger possibility.

KATHY HANNUN: [00:33:06]
Yes, I absolutely agree. I mean, it's like, maybe this is a bad analogy, but it's like the friend who's dating the person that everyone kind of knows isn't the right match. And even the friend, isn't very happy, but they're worried that if they break up with that person, there won't be any other person for them. That is the exact same phenomenon. It's like, you have to have this belief that there is something out there worth finding. And so if what you're doing now is mediocre, it's worth stopping to find that thing that's not,

ADAM GRANT: [00:33:44]
if you normalize failure in your organization, it can help people deescalate their commitment to bad decisions and focus their energy on better opportunities. Because Kathy pulled the plug on Foghorn. She was able to pursue a new project, which eventually launched her [00:34:00] career as an entrepreneur.

KATHY HANNUN: [00:34:01]
And I am the founder and president of Dandelion Energy, a geothermal startup.

ADAM GRANT: [00:34:12]
Every time. I talk about escalation of commitment, whether it's with startup founders or military generals or students, there's one question that always comes up: Is one person's escalation another's heroic persistence?

BARRY STAW: [00:34:27]
If you think about it, most of our Hollywood movies, they usually have the protagonists experiencing a long series of setbacks. [00:34:38] But then they have stuck to it and they've refused to admit failure. And in fact, everyone around them has told them that whatever is happening is a failure and everyone around them is dropped off and they have hung in there and they are ultimately successful.

ADAM GRANT: [00:34:56]
And yeah, grit can be a good thing. We need people with the will [00:35:00] to persist and triumph in the face of obstacles. But when you're channeling your inner Katniss Everdeen, Inigo Montoya, or Forrest Gump, it's worth pausing to see if you're on the wrong path, because you might be Wile E Coyote, chasing a roadrunner you'll never catch.

Next time on WorkLife:

GUEST:
“It was incredibly humbling because I would submit job after job after application, after application and would hear nothing. It took an entire year to get a full time job.”
Everyone's faced career turbulence. The current recession is jeopardizing millions of careers right now, but we've been here before, and there are lessons we can learn from past recessions.

Adam Grant:
WorkLife is hosted by me, Adam Grant. The show is produced by TED with Transmitter Media. Our team includes Colin Helms, Gretta Cohn, Dan O’Donnell, JoAnn De Luna, Grace Rubenstein, Michelle Quint, Banban Cheng and Anna Phelan. This episode was produced by Constanza Gallardo. Our show is mixed by Rick Kwan. Our fact checker is Paul Durbin. Original music by Hansdale Hsu and Allison Leyton-Brown. Ad stories produced by Pineapple Street Studios.

Special thanks to our sponsors, LinkedIn, Logitech, Morgan Stanley, SAP, and Verizon. For their research on escalation of commitment, thanks to Sigal Barsade, Dustin Sleesman, Don Conlon, Gerry McNamara, Jonathan Miles, Klaus Moser and colleagues, Henry Moon, and of course, Barry Staw.

For the audio from Fyre festival: The Greatest Party that Never Happened Documentary, is courtesy of Netflix and for the intro to Kathy and the insights on X, gratitude to Courtney Hohne.

BARRY STAW: [00:37:05]
I hope to get a recording of this so the next time I need to decide whether I should keep that old car of mine or whatever, I will not fall into the same traps that I have spent my research career trying to create lessons about how to avoid.

ADAM GRANT: [00:37:24]
[Laughs] That's, uh, I think there's, there's no better person to be persuaded by than someone, you know, well, and trust a lot — yourself.

BARRY STAW: [00:37:33]
Thank you.