The Psychology of Decision-Making: Conquering Cognitive Biases for Better Results

24:53Use code charm at monarch.com in your browser for half off your first year. That's 50 % off your first year at monarch.com with code charm. We have to start taking time into account and say time is clicking. How much value would I get from this digital camera if I actually had something to use rather than wait for another one? Or how much happier would my life be? And we need to quantify that. Not easy to do. And one approach that I think is a practical advice helps is to ask people to give themselves a deadline and say, look, every day you're spending time making a decision has some returns, but those days have diminishing returns.

25:40At some point, you know, the value of the thousandth day that you think about this is not going to be very valuable. And how many days do you really need to spend making that decision? Give me this number and let's pick that that's your deadline. And by that day, you have to make a decision. And if you haven't made a decision by that day, decide to make the change. And why am I saying that? Like you could say, if you haven't made a decision by that day, flip a coin. Right? Just, it doesn't matter. But the truth is that because we are so much more connected to the path of least resistance, to the do nothing, if by that day, let's say we decide by, you know, August 13th, you need to do something.

26:31If by that day you haven't decided and they look equally appealing to you, most likely you should make a change. Why? Because they're not making a change right now is weighing too much in your mind compared to the other options. So most likely it's the better option. You're less likely to regret it later. Now let's unpack the omission commission bias or loss aversion status quo bias. We'd rather make a mistake by failing to act than make a mistake by acting. Annie explains a job search example of a C-level exec. In order to talk about status quo bias and omission commission bias, I think we need to step back and talk about loss aversion for a second because this is where the interaction becomes really bad.

27:14So loss aversion is foundational work originally from 1979 from Daniel Kahneman and Amos Tversky. Daniel Kahneman, also Nobel laureate in the economic sciences. Amos Tversky wasn't alive at the time that was awarded, so he didn't receive that. But this is part of prospect theory. And loss aversion basically says that we really don't like to start things that are associated with some chance of loss. And in fact, we over-index on the losses in comparison to the wins. So this actually becomes a really big problem in enterprises, right? Is that if you swing for the fences, there's a really high chance that you lose in the short run, right?

27:57But if I do something that's an incremental change, even though the expected value is lower, there's just a lower chance of any kind of big loss that's associated with it. And so what you'll see in enterprises is that you get a lot of incrementalism and consensus-driven decision-making over these sort of big swings that people are willing to make, which is how a startup can beat an enterprise. Because startups are taking more big swings, right? Okay, so that's loss aversion. And then there's another concept, which is called sure loss aversion, which is also from Kahneman, which is when we have a loss on the books, we don't like to convert it into a realized loss, right?

28:34So we don't want to take a paper loss and turn it into a realized loss or a sure loss. So you could see this, it's related to sunk costs. So if I buy a stock at 50 and it's trading at 40, if I sell it, then I have to realize that$10 loss. But if I hold it, I could maybe get the money back. Right. So this also, so that makes us not want to convert. Okay. So now we've got this stage set with loss aversion and short loss aversion. So now let's think about how that interacts with a status quo bias, which is a preference for the status quo. And then also omission, commission bias. So omission, commission bias, this is something from John Barron, where we see failing to act in a different light as acting.

29:16All right. So I'm sure you're familiar with the trolley problem. This is kind of an omission commission problem, right? So you've got five people are in the way of a trolley that's going to come run them over. There's a lever. You can pull it. But if you pull it, it's going to be diverted onto a track where one person is going to get hit by the trolley. And people are very reticent to pull that lever because one is sort of like the state of affairs. Like it's just what can I do? It's just nature. And the other is an omission, a commission, rather. It feels like an act. And we don't want to do that because I'm an act.

29:54So another place where this omission, commission bias, and this is where some of the original work was done, is on vaccine hesitancy. If, like, it's the plan of nature for you to get measles or COVID or something like that, we'll prefer that to a possible bad outcome that could come from the vaccine itself. even if the chances of harm from the vaccine are much, much lower than the chances of harm from the disease. It doesn't matter. We'd prefer to allow nature to run its course basically, as opposed to do something where we change the state of affairs. So now we've got that all figured out, right?

30:34Okay. So let's bring them all together now. It turns out that loss aversion is asymmetric in the sense that where we're recruiting that fear of things going wrong, that fear of realizing those downside outcomes is when we start something. In other words, when we change the state of affairs. So if we switch from the status quo, and sticking with the status quo is an omission, right? If we switch from the status quo to something new, in other words, like I quit my job to start a new one, or I quit my relationship to start a new one, or I shut a project down to start a new one, as we're trying to navigate that decision, we get hyper-focused on the losses that might be associated with the new thing that we're doing in a way that we aren't hyper-focused on those for the thing that we are already doing.

31:29Dan Ariely explains the omission commission bias with the example of a friend thinking about a divorce. I have a friend, a very good friend. And he came to me a few years ago and he said, look, I've been married for eight years. Seven of them we've been fighting. And I don't know if to continue this relationship or not. And I said, look, I don't know what to tell you, right? The pros and the cons, there were no kids. But I said, but here is one thing. I said, in your decision, you're thinking about one branch is do nothing and one branch is taking action. And that creates a bias because we are biased over the no action.

32:15So I said, to get yourself to think about it in a more neutral way, imagine that you're not married. Imagine that you met this woman last night for the first time. And imagine that now you have a decision whether you want to marry her or whether you want to never see her again. And make the financial decision the same. If you decide to marry her, you'll have more money. If you decide to never see her again, you have to give her half of whatever you have. I mean, make it the same way. But don't think of a decision that says one branch is do nothing and just continue to fight. And one is an action of getting a divorce.

32:58Think of both of them as on equal footing. Anyway, they're both much happier married to other people today. But if you think about that approach of saying, I don't want to think about the forks in the road as having, do I do nothing or do I do something? but I want them to say, if I had both of those options on equal footing, which one would I pick? That's a really good starting point. Regret is a product of taking action. I did X and something went wrong leads to regret. I did the same thing I always do and something went wrong does not lead to regret, but is rather seen as being unlucky or an accident.

33:37This means we favor inaction over action also ties into the omission commission bias. So when do we regret? Well, what is regret? Regret is this idea that we compare what we have to an imaginary world. And if what we have in the real world is worse than what we have in the imaginary world, we feel bad about it. And if it's better, we feel good about it. So for example, when would you feel worse if you missed your flight by two minutes or by two hours? Two minutes, obviously, right? And why? Because you run to the gate, you see the plane pulling away, you see seat 2B, and you say, I could have been there.

34:19And if the person in line in front of me understood what no liquids is, if the TSA pre-actually worked, I mean, you come up with all kinds of things that you say, I could have been there. And because of that, you compare your state of not making it to a hypothetical state of making it and you feel bad in comparison. If you're late by two hours, you don't come with a count of action. You don't say if only. There's not if only I would have been there with a two hour delay. Or another example. Imagine you drive to work and back every day. Work and back, work and back, work and back. One day on the way back, a tree falls on your car, destroys it completely, the insurance only pays 75%, you are left with some loss.

35:10How bad do you feel and for how long? Okay, that's case one. Case two, working back, working back every day. One day you decide to go home on the scenic route. You take the scenic route. On that particular day, a tree falls on your car, destroys it. The insurance company pays only 75%. Now you're more upset and for longer. Why? Because in the first case, you did what you did every day. You didn't do anything different. And you can't imagine if only today I took the scenic route, right? You can't think this way. You're saying, I just did whatever I do every day, right? It just happened. I mean, you're upset, but there's nothing you can do.

35:54If you took the scenic route, now you can say, if only. If only I didn't take, why did I have to take the scenic route today? I knew it was not a good idea. And that's regret. Now, think about the forks in the road. When you do nothing, you can't go back and say, on March 22nd, I made a mistake, right? If you did nothing, there's not a particular day you made a mistake. Like you never made an action, but you can't go back to a particular moment. For regret, what you need is a moment you can go back to and hit your head and say, I should have known better. If you take an action, you can regret it.

36:40If you don't take an action, very hard to regret it because you don't know what the counterfactual is, right? So let's say you decide to get a divorce. And let's say it was a mistake. You can say, oh, on that day, March 22nd, I should have known. I should have known. Why did I ask for this divorce? If you don't get a divorce and it was a mistake, you can't go back to a particular day. You say, I lived my whole life miserable, right? But you can't connect it to any particular day. So regret creates an additional bias to favor inaction compared to action. It's not that it makes us happy, but it's another bias that causes us to favor the no regret option.

37:30And the no regret option is the option with the inaction that we don't do anything. Identifying and learning to navigate your blind spots is a freeing feeling. These are the mindset shifts that unchain us from our old patterns. If you find yourself in a repetitive pattern that is not serving you, it is highly probable that you have a blind spot distorting your perception. CEOs, military personnels, entrepreneurs, and other consultants and advisors pay top dollar to uncover them and break free from poor decision making. That's right, Johnny. Working with an executive client, Christopher, we recognize he was making a lot of key decisions for his business in the evening to clear his inbox.

38:12This led to the availability heuristic and mental overload creating unneeded stress in his business. In fact, a study published in the Journal of Cognition showed that whether you're a morning person or not, the most accurate decision making happens on the early side of the day between 8 a.m. and 1 p.m. This allowed Chris to recognize that Inbox Zero was leading to stress and poor decision making in the evenings. By making the decision to snooze important decisions until the next morning and holding him accountable on his evening decision making, he saw an increase in his productivity and freed his evenings for friends and family time.

38:47Even better night's sleep knowing he was making better decisions according to science. In this next section, our guests help you be a better decision maker with some great tools. How to make better decisions. Do not make decisions in the moment, but give yourself time and use kill criteria. Get yourself a coach, mentor, or therapist. Talk to us, Annie. That then can get us to this place where we can start to say, how can we get better at these decisions, right? And there's basically two strategies. One is to not make the decision in the moment when you're facing it down, right? So in other words, think in advance about what could occur in the world that would make it so that you would want to quit.

39:26So that's something I do with like if I'm working with somebody who's having trouble letting an employee go, who's having trouble exiting somebody, I'll say, okay, so I know that you don't want to exit them today. How long are you okay with the situation as it stands? And they'll usually say something like six weeks. And I'll say, great. So imagine it's six weeks from now. What would you see from this employee that would tell you you should keep them on? what would you see that would tell you that you ought to exit them? So that would be called kill criteria. That will allow them when six weeks passes to actually be more likely to exit them because it stops you from saying, well, it's sort of that idea of tomorrow is always tomorrow, you know, where it's like, I know they can turn it around.

40:07And then they say, I know I can turn it around. And then it's six weeks later. And they say, I know I can turn it around to you again. And you don't want to exit them because that feels like your failure. If you actually write down what the criteria would be. It's going to help you exit them. So that's like one strategy. But the other one you just mentioned, AJ, which is get yourself a coach, someone from the outside looking in, because that's that thing that I said about, we all see it in other people. We can see so clearly when they're just like pursuing something that they ought not be pursuing.

40:38And imagine then that everybody must be seeing that in you also, but nobody's opened their mouth because you didn't set up a relationship that allowed them to open their mouth. And if you just gave them permission or sought out that advice in a real way, whether it's a mentor or therapist or an executive coach or whatever, they're now gonna be able to help you through these decisions, right? They're gonna help you see, going back to that original question of what's worthwhile to stick to and what's not. And they're gonna be helping you parse that apart a lot better. Shane breaks down an important concept, speed versus velocity.

41:15Velocity has a vector. The question, what would the best version of you do? Imagine a film crew following your perfect version of yourself around. Take it away, Shane. We're programmed to think in terms of speed, but not velocity. And the difference between the two is velocity has a vector. So velocity is speed towards a destination, whereas I can run around in a circle and I'm going fast, but I'm really not going anywhere. And so once you start thinking in terms of speed towards target, towards destination, towards outcome, it changes things a little bit, right? What outcome am I running towards?

41:51Is this outcome worth wanting? That's a different question. And you can use rituals as a way that the best version of yourself, another form of safeguard, right? You can use the rituals, the best version of yourself once you follow them and it becomes ingrained. I did this with my kids. They were sort of homeschooled during COVID to the extent that that was even possible. And then they switched schools after that and they started getting homework again. So they hadn't had homework for a while. And I don't know about everybody else's kids, but my kids hated the idea of coming home after school and doing homework, right?

42:27So it was a battle. And we would do it at a different time every day, right? And during this time, right, they paid attention all day in class. They're young. That's hard on them. It's really a struggle. And they have 90 minutes of homework. So they don't go to a school where it's like, here, you know, read this little 10-sentence book and, like, that's your homework. It's like, no, they got legit studying homework tests, exams. And so they come home and it was just big power struggle. And I was like, why don't we just create a ritual around this? You come home, you get a space. It's about 40 minutes for them to come home on the bus.

42:58They get a space, they can decompress, they can do their thing. They come home, they shower, and then they come down to the table and they start doing their homework, dining room table. and it took about a month to install this ritual. And every day I would have to like, I wouldn't say force them, but remind them of what they wanted to do. And the way that we came up with this is super powerful for adults too. It was like, what would the best version of yourself do? What would, you want A pluses. What would an A plus student do in this situation? Well, they would come home and do this. What would the best version of yourself do?

43:30Same thing. Okay, why don't we try that and see how it works? So after a month of doing this consistently every day And consistency is the key. And I want to come back to consistent in a second. I left. So I'm always home for the kids after school, but I wanted to see what would happen if for a few days, nobody was there. So they came home, they showered, they went downstairs and they did their homework. The ritual had taken over where willpower failed. They didn't need discipline. They didn't need willpower. They just followed the ritual. We're biological creatures. This is what we do. We follow the ritual.

44:07We follow the culture of the organization. We follow the instinct. The problem is most of us are inconsistent. And consistency is the key to so much in life. It's like we're Sisyphus, right? We roll the boulder halfway up the hill and we're like, you know, that's a lot of work. I'm going to come back to this next week. And we leave and what happens to the boulder? It falls down. You think about learning a language, Duolingo. I've had hundreds of people I know sign up for Duolingo. And man, they're advocates for like two weeks. And then all of a sudden they skip a day. Then all of a sudden they skip another day.

44:38And then all of a sudden they're no further ahead than they were. What happened? Consistency matters. You need to be consistent. You need to do just a little bit every day towards your goals. So the way to identify the rituals that are super important to you or the ones that are getting in the way. And I had this thing and I didn't come up with this. I forget who came up with it. I don't want anybody to think it's me. I don't actually come up with most of these ideas. I get them from other people. But imagine a film crew following you around all day. And they're not documenting your life. They're documenting the life you want to have, the success you want to have.

45:15What would they see? What would you not want them to see? And then you start acting like the person who gets that success would act. You know, the person that achieves success, maybe they don't wake up in the morning and check their phone and let other people usurp their day. Maybe they're more conscious about how they spend their time. Maybe they avoid all these things that I'm wasting my time on. And the biggest thing that we sort of miss is like we often focus on things outside of our control or again, going back to the gas or water on a situation. When we pour gas on a situation, we have to repair that relationship.

45:51And all the time that we spend focusing on things we don't control, fixing relationships because we reacted without reasoning, all that time comes at the expense of velocity, which is direction and speed. And it doesn't matter how fast you're going, but if you go inch by inch, even centimeter by centimeter, but you can pound that result day after day, week after week, month after month, you're going to reach your destination. Now, David Siegel makes the same point about mentors. Number one reason I've been relatively successful from a career standpoint is luck. But the second one after that is definitely the mentors that I've had along the way.

46:29whether it's been people like Kevin Ryan, who was the CEO of DoubleClick at the time, ultimately the person that acquired Meetup and the founder of MongoDB and the Guilt Group and Business Insider and Zola and all these other companies, or David Rosenblatt, who is now the CEO of First Dibs and on the board of IAC and on the board of Twitter. These are people who I've known for 25 years. Luckily, again, it goes back to luck. And whenever I had issues, whenever I had questions, whenever I had insecurities, whenever I just needed someone to be totally vulnerable around, who had no agenda except for helping me and setting me up for as much success as I could.

47:03I went to them and I went to them numerous times for different things and I seeked out their advice. Because I had that experience, I have a cadre now of 10 to 20 different people that I do the same thing for now. And it is probably one of the most meaningful parts of my life, of my business life, is the cadre of people that can call me about career issues or other challenges that they've had. And I think per your point, having a personal board of advisors, having a group of people that you can call through thick and thin is one of the best things that anyone could do to set themselves up, by the way, both professionally, but I would even say as well, personally as well, to have that group of people on a personal level too.

47:48So there's someone, her initials are EC. And actually, I got to know her when I first started at Meetup. Unfortunately, she was an initial round of layoffs, but I thought she did a great job. After the layoff, she said to me, you did exactly the right thing. My job was not important. I'm so impressed and we're in good hands that you did it. And then she called me up like a month later and she said, can you be my mentor? Just like that, straight up. And I said, I would love to help you. Sure. You know, I'm not able to meet like every week or even every month, but on a quarterly basis, absolutely.

48:23I've written some career references for her to go to, you know, business school and other schools. But to answer your question, one person just said straight out, I think I could learn from you. Can you be my mentor? And it wasn't some like game or anything like that. It was just open, direct and honest. And that's the best. Just be direct. Another person, I teach at Columbia, so I've had, you know, 600 plus students through the years. and someone would decide to want to become a startup founder, she said, could you be on our kind of our board of advisors? I'm like, sure. So advising her about different things.

48:55And she just got a million and a half dollar check round of financing for her startup as well. So those things just are wonderful. So I guess my answer is ask directly. And also if there's a business context for having someone on an advisor level or board level, then that's another opportunity to be able to kind of pull people into. In his next clip, David Siegel talks about creating opportunities through taking action. One of the areas in decision-making that people don't prioritize enough is whether or not a decision creates options for yourself or decreases options for yourself. So let's say you're really into finance.

49:35You can either go into, you go into a lot of things, but if you choose investment banking, everyone wants to hire an investment banker who's worked for investment banking for two years. Everyone wants that kind of experience. If you become a trader because you love finance, like a specialized commodities macroeconomics trader, the next job you get is a specialized commodities macroeconomics trader. Decreases options. When you have more options and you keep creating options for yourself, if you have a podcast like the two of you, if you write a book, if you do all these certain things or write an article for, you know, whatever, for anywhere, there are certain actions that could create significant opportunities.

50:11And when you have all those opportunities, guess what? Lucky stuff just ends up happening to you because you now have, like you said, a hundred different slot machines all going at the same time. And even though it's only a penny, hey, that penny could still turn into a lot of money versus throwing it all on, you know, red 25 and, you know, going for that and then being disappointed that it doesn't work out. So I think the prioritizing optionality in decision-making directly results in making decisions that result in better luck. And luck, as I like to say, is hard work. You could work really hard and then lucky stuff will happen, or you could sit on your butt playing video games all day and, oh, but whoa, me, no lucky stuff ever happens to me.

50:57Okay. Well, you know, that was a decision you made. Did you know there are automatic rules for success? Shane shares how to create them and make better decisions. So in the book, we talk about things like safeguards, where it's like, how do I prevent this from happening in the first place? And if I can't prevent it, how do I deal with it when it happens? And one of the things that we talk about that has been life-changing to a lot of people who've read an early copy of the book is automatic rules for success, which is basically having the best version of yourself pre-decide what you will do in certain situations, but it has to be a rule.

51:31So we've been taught our entire life, you need to follow the rules. I used to get polygraphed on this stuff. Like this is like, you have to follow the rules. You can't break the rules. Speed limit 60, you got to go 60. You show up on time, you do all the things that you're told to do. And so all these rules were programmed to follow, but we've never thought about how do I switch this around and use those rules to my advantage? How do I create an environment, an artificial environment where my own rules are helping me? So you talked about drinks and social pressure. This is one that a lot of people feel or desserts another one, right?

52:07You're trying to eat healthy. And so common scenarios are like, I'm going out to dinner with some friends. I don't want to have dessert. But now every time this happens, I have to make a choice. And that choice, I'm relying on willpower. And eventually everybody loses the battle with willpower. and that choice is I'm not going to have dessert because I've thought of it as a choice. But what if we create a rule and our rule is I just don't eat dessert. That's my rule. I dessert once a year on Christmas, whatever you want it to be. But my rule is I don't eat dessert. Well, now when you're in the exact same situation with your friends, you're out, you just have to follow your rule.

52:45But more importantly, when you tell them it's your rule, they won't push back because we've been taught not to push back on rules. And so if you just simply say, my rule is I don't eat dessert, you might have to do it twice, but they'll stop pushing it on you. That social pressure will be so much less and you'll be able to do the things that you want to do. Your desired behavior will become your default behavior. And this is so powerful. Another example of how this has impacted people is working out every day. I don't know about you guys, I don't like working out. A lot of my friends, you know, don't like working out either.

53:19A lot of them love working out those people. This rule is not for you. But work out every day. So about two, three years ago, during COVID, I was like struggling to do these like two or three time a week workouts. And what I found was like I was listening to this voice in my head, which is like, oh my god, you've had a long day, you have so much to do tonight, there's a million emails to reply to. Why don't we skip working out today and we'll do extra tomorrow. And that little lie, right? I started negotiating with myself. I'm like, yeah, totally. You're right. That sounds great. Why don't we skip today and I'll do an extra 20 minutes tomorrow.

53:58Tomorrow rolls around and that little voice is like, oh man, I got you yesterday. I'm going to get you today. And so I just created this rule and I was like, you know what? I'm just going to work out every day and see what happens. And that doesn't mean I have time for a 90 minute workout every day or even 60 minutes. So I reduce the duration or scope of what I'm doing, but I do it every day. It might mean I go to the gym and do squats. It might mean I just go for a little run. I do something that sweats every single day. And since I've done that, it's been so powerful because that little voice in my head doesn't say, should we work out today?

54:34You've got a lot to do. It's like, how do I fit this in? And what is the duration and scope of how I fit it in. And that conversation helps the best version of me get what I want out of life. And these things are just so powerful, right? I have all these little automatic rules. Like if I'm out with business colleagues, I stop drinking at nine o 'clock. Nothing good happens at nine with people that aren't your friends. You know, I invest in an index fund every month. I don't have meetings usually until 12 o 'clock in the day. Why? Because my rule is I don't have meetings. I mean, there's violations of that rule on occasion, but I want the best time of my day, which for me is the morning, reserved for the biggest opportunity that I have.

55:21And that opportunity, one of the reasons that we don't focus and we don't get the outcomes we want is that we don't have the time for our priority. We're always searching for this time. Oh, I know what's really important, but I don't have time to do it. Well, it's like, well, why don't we block off time every day? And I know a lot of people are probably listening to this going, oh, wouldn't it be nice to be able to block off till noon? Well, I started doing this when I worked at an intelligence agency. I didn't block off till noon because that would have been impossible. First, I started with 15 minutes and I just gradually expanded it.

55:52You look at my calendar. I was going out six months, but I was booking a meeting with myself six months out. And I'm like, OK, from 830 to nine every day, I don't have meetings. So I'd start booking and then I would go from 8.30 to 9.30 and I would gradually just increase the time the farther I got in the calendar. And then lo and behold, when this time ran, came around, I'm like, oh, I got this free time and I can start doing these things that I really know I need to focus on, but I don't have to find the time so that my outcome started to improve. And then we started to do it as a team because I'm like, well, if this works for me, I bet you it works for other people.

56:26And with it being a rule, you don't have to draw on your willpower and decision making each and every time someone goes to try to schedule a meeting with you. Each and every time someone pushes back on your morning. Yeah, totally. So I get this idea from Daniel Common. I was like in his penthouse in New York and we were chatting and his phone rang and he took the phone and towards the end of it, he was like, my rule is I don't say yes on the phone. I'll get back to you tomorrow. and I was like, that sounds really powerful. Tell me about that. He didn't think of how to apply this to all these broad situations, but he hated saying yes on the phone because he often felt the social pressure to go along with whatever the person was.

57:14Do you want to meet for coffee tomorrow? Well, no, I don't want to meet for coffee, but you don't want to say that because you don't want to push back on people. Do you want to talk at my event? No, I don't want to talk at your event. And so he had all of these people coming inbound to him, asking him to do stuff that he really didn't want to do. And his way to dissipate the situation was like, my rule is I just don't say yes on the spot. I'll get back to you tomorrow. And he's like, it's so funny because I went from saying yes about 90 % of the time to saying yes about 10 % of the time by inserting.

57:45What did we do? We inserted this pause, the space between stimulus and response. So we took something that we know exists, stimulus response, and we've inserted through an artificial environment, through a safeguard, we've inserted a way to pause. David describes one of his anchoring principles, mission, vision, values. I really like grounding things in anchors. And to me, the anchors of culture are your mission, your vision, and your values. When you have those specific anchors, it allows you to point out each of those things and ensure that that's imbued in the organization. And when I say imbued, I mean in our recruiting process, we use that for hiring.

58:28In performance management and 360 feedback, we evaluate people based on those values. When we promote people, we promote people based on those values. We have awards, like a step-up award for people who step up, who demonstrate that value. We incent people based on those values. At one point, believe it or not, WeWork had said to me, you don't need Meetup values anymore. We're going to give you WeWork's values and WeWork's values are going to be Meetup's values. And that's how it's going to work. And I was like, no, no, no. You can't just like impose values as a parent company. You know, that doesn't work.

59:02So that's, again, an example where sometimes your highest fighting is internal and not external. is kind of going back and forth with Adam and the HR department at WeWork around things that they just tried to push down that may have made sense for a 10 ,000-person organization, but hell no didn't make sense for a 250-person company. Johnny, do you have any rules that are important to you? How do you help X-Factor Accelerator members install them? You know, AJ, for myself, when I was in my 20s, I was one of those people who just looked for way too much information. And due to that, a lot of times you can find, especially with the internet, all the information in the world, in fact, so much information that it prohibits you from taking any action at all.

59:48And I had to come up with a rule that would be my kill criteria in order to take action. And for myself, the rule is sometimes there's no right or wrong decisions, only decisions that you make right. and this allows me then to just take action sometimes if it's a heads or tails situation and then I can focus my efforts and energy on making that decision the right one for me and AJ I have a great story about one of our exec clients his name is Steve and for Steve he had some situations and some self-doubt doing due to some emotions that he had about himself and those Those emotions stem from certain childhood traumas that was prohibiting from taking action.

1:00:35But once we weeded all through those beliefs, he realized how illogical they actually were. But yet he still had the feelings of nervousness and anxiety to move forward. But due to understanding that what he believed was illogical, we now realized it was time to step into the unknown and brave it. And now, rather than trying to think our way through his decisions, he was able to take action into progress. Every step that he had taken into the unknown made him feel better about the process, but also himself. Now, sometimes quitting is the answer. In fact, we need to stop looking at quitting as something bad.

1:01:20Annie explains why. I want people to stop having a bias against this word quit. it. And the reason that I so want to do that is that I'm not taking an anti-grit position. I'm taking a, you have to have both, right? That just sticking to things for the, just because you think that sticking to things is good is not going to create success for you. You have to stick to the right things. So we can think about during our lives, we're sampling a whole bunch of different stuff, right? Like we're trying out a lot of different things. Think about it like dating, right? Like you go out on a lot of dates, but you quit most of them so that you can stick with, with the person or, you know, that, that you would like to actually commit to.

1:02:05And it's true of anything, whether it's like careers or, or major majors, relationship jobs, projects, products that you're developing, success actually comes from mostly quitting And then being very, very picky about what you really put your time and energy into. And I feel like the dialogue around grit has gotten to this point where it's just like, oh, I stick to things. And so I'm awesome because it's this amazing character trait. And yes, it's a great character trait, but not across the board, absent context. Like why would you stay on a road where there was an accident if you could exit it?

1:02:40We have to learn that it's okay. Not only is it okay to exit things, but it's necessary to get you to where you want to go on really the fastest that you can. Entrepreneurs, no one to stick with something and no one to quit it. The average age of a successful entrepreneur when they start their company is 42. I think that people would be pretty surprised to hear that statistic because we all think about Mark Zuckerberg. But they're 42 and they're usually on their third startup. Now, when you ask those people, I think, AJ, that your intuition here is correct. If you ask those people to tell their story, they would tell a story about grit, getting knocked down and getting back up and sticking to it until they finally found success.

1:03:24And then they would be encouraging other people to just stick to it as well. except that that's a story of successful quitting. It's both grit and quit, right? Because if they're on their third startup, it means there were two that didn't work that they stopped that then got them to the thing that actually helped them to succeed. But that piece of the story, abandoning something that isn't working so you can turn your time and attention to something that will gets lost in that and it just becomes sort of keep trying. And I think that one of the big problems that we have is that there is no doubt that someone who is successful at something has stuck to it, right?

1:04:01I mean, you read a book that I wrote. I stuck to it. I finished the book, ironically, called Quint, but I finished it, right? So here's this successful thing that I did. And you can look back and say, look, that's the power of grit, right? She stuck to it, even though writing a book is really hard. The issue is that what's true in retrospect, right? That if someone has been successful at something, they will have stuck to it is not true prospectively. That if I stick to something, I will succeed. And that's where we really get confused, right? So like I saw a piece of advice on Twitter about three months ago, I think it was.

1:04:39And, you know, we're in a very bad macro environment for fundraising for entrepreneurs right now. And I think it's getting tough for people to raise at the moment. And someone said, they posted, it took me 16 months to raise my seed series. So never give up. What horrible advice, right? Like, okay, you ended up being successful after 16 months. Like how long do you think they should keep doing it? You know, do you think 16 months is too little, too much? What about 24 months? What if they're still out at 36 months later, toiling away, trying to raise around? Don't you think at some point they should take a signal from the market and walk away.

1:05:20And I think that this is where things get really hard because, of course, the question is, how would you tell the difference between the two? When should you keep going and when shouldn't you? How do you not get confused by someone who has a very small chance of succeeding, actually succeeding? Because if someone has a 0.5 % chance of succeeding, that means half a percent of the time they'll actually succeed. It doesn't mean that it's worth pursuing. Those questions become very difficult. And so what happens is that we end up just with like this simple rule of thumb, just stick to it, you know?

1:05:51And I think it's terrible advice. Unfortunately, adults usually quit way too late. So for most things that we do, assuming, so, so the cab drivers obviously in some cases are quitting too early, right? Meaning they've achieved their goal. So, so when we've achieved a goal, we're, we'll often quit too early. So let's assume we're not talking about kids. Let's assume we're not, we're instead talking about adults, when we're talking about adults, the usual case is actually that we quit too late. And that at the moment that quitting would be like objectively the right choice, if we were omniscient, it will feel way, way, way too early.

1:06:28So let's think about why that is. So we talked about the fact that when you start things, it's a decision made under uncertainty. So here's the rub. When you stop things, that's also made under uncertainty. Exactly. What happens at the moment that you're deciding whether to quit is that usually there's some, if it's objectively the right time, there's always going to be a good chance that you could turn it around. Right? Like, like I said, like, even if you only have a half a percent or 1 % chance of making it work, maybe you could. Now we're having to do like this expected value or forecast, right?

1:07:02We have to forecast the future. And what we have to say is the thing that I'm doing is not worth it compared to other things that I'm doing. doing, right? But I don't know for sure, because the only way for me to find out for sure whether the thing that I'm doing is going to work is for me to stick to it. And what that means is that we're trying to gather up so much certainty to the point where it's making you sick, right? For real. We're trying to gather up so much certainty that there's no other way, that we can't ever achieve it, that there's no way for us to get there before we're willing to walk away.

1:07:37Richard Thaler actually said something super smart about this. He said, most people won't quit until it's no longer a choice. Like you already fell into the crevasse. It's already making you sick. You're you've already used up all your sick days and you don't want to go into work anymore, you know, or you have a startup and you're down to your last dollar and you can't raise another round and you just don't have a choice but to shut it down. That's when most of us will quit. But that's long after you should. It's kind of like, think about it this way. Like if you're climbing Mount Everest, the weather forecast has a high enough probability that you're going to be caught in a blizzard, you shouldn't climb.

1:08:14But the moment that you decide to do that, there is no blizzard. So what happens, and we see this repeatedly with people climbing Everest actually, is that they continue to climb until the blizzard is upon them, because then they know for sure, right? They know for sure that they have to turn around. So the question is like, what is driving us to do that? Why do we want to get to that certainty that we don't have any other choice. And that's where we can get into some of these problems. Like there's this issue of what's called external validity, which is how do we think other people are going to view us?

1:08:43Well, it's a lot easier if I can be like, yo, AJ, like I didn't have any choice. I'm not a failure. I tried and tried and tried and tried and tried. Then you're going to be like, oh, I really admire her grit, right? So now I'm going to get you, I'm not going to have you sort of looking sideways at me, like wondering like why I'm such a quitter. In closing, process-based decision-making outperforms outcome-based decision-making. All we can do is make the best decisions possible. The outcome is often dependent on many factors than just us. I think we need to change our focus from outcome to process, right?

1:09:21If you took all the information into account and you made a good decision, there's a chance it will turn out badly. The world is random, right? You can look at all the restaurants and pick the best one, and eventually there was rain or the fish was bad or something happened. You can't look at the outcome of every decision and hit yourself over the head and regret it. What we need to do is to focus on the decision-making process. If I looked at all the options, I thought about it, I tried to eliminate the bias, I did the best I could for the decision-making process, don't regret it. You did the right process.

1:10:06The fact that the outcome happened differently just happens. If you've listened this far, my guess it's because you want more out of life and make the right decisions to succeed in work, love, and life. If that's the case, then join us, the Art of Charm team, and hundreds of people just like you who are experiencing breakthrough conversations, supercharging their confidence, making better decisions, and growing an incredible network inside our world-famous X-Factor Accelerator program. The X-Factor Accelerator is where high-achieving, like-minded people meet, strategize, and unlock your hidden X-Factor to make sure that you get the most out of life's opportunities and unlock those doors keeping you from success.

1:10:43We start every month with an intense goal-setting strategy session so you have a personalized plan of attack and remove decision fatigue from the equation. Weekly implementation sessions with opportunities to practice your conversation skills, rapport building, supercharging your charisma through powerful communication and unlock the charm to attract the right people into your life. Imagine what you can accomplish with coaching and mentorship with the art of charm. What are you waiting for? Join us today at unlockyourxfactor.com. All right, before we head out, a huge thank you to our producers, Michael Harold and Eric Montgomery.

1:11:16Could you do us a huge favor? Rate and review this show in your favorite podcast player. We hope you have an epic week.

1:11:27you you were a bad boy you threw your love away like it was just a toy and you sold the world you sold the tragedy cause you had your taste of black on the yesterday yeah but I remember you oh yeah

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