Sometimes, it’s okay to quit

It has been a really awful 2020. It’s only April. Bushfires and Covid-19 have certainly given us all enough reason to give up on any hopes and dreams we had for this year; long forgotten I am sure are the optimistic new year resolutions that we all struck with ourselves. The pandemic has forced us all out of our routine behavioral patterns, both at home and at work. Forced us to change how we plan for, think about, react to and approach daily tasks. And we all know with any kind of change, it is uncomfortable – let alone change spurred on by living in a sudden health crisis. Some days it might feel impossible to crawl out of bed, but right now it is so important to persevere and be as resilient as possible. Refocus your priorities and do what you can to nurture your well-being. 2020 is not the thing to give up on. There are plenty of other things however that may warrant hanging up the boots.

Socially conditioned?

We’re socially conditioned, maybe also through our family upbringing, to never quit. When you start something, you should finish it. That is the very essence of grit; there are how-to books labelled as such. If you are going to do something, do it right (and implicitly, finish doing it). Even professional development workshops and learning around growth mindsets spin a negative towards self-evaluative statements like “do you struggle to finish tasks you have started?”. But what about when you pursue something so doggedly that you develop tunnel vision and lose sight of why you started the task to begin with?

Life is comprised of investment decisions

When you decide or commit to doing something, whether it is further studies, home improvement projects, social promises or the like, you are actually making an investment decision. Investing your time, energy, mental stamina, capacity, and sometimes dollars too – to achieve the target outcome. And just like all investment decisions, you have some commitments where you are targeting short, medium, and long term returns. Life is a combination of diverse investment decisions, and if you diversify appropriately then you’ll come out with a balanced and positive outcome. This lies at the core of capital allocation – we have finite resources to allocate so success lies in the art of allocating your capital (time, energy, money) to investments that will yield the highest returns most efficiently. Which is why it’s important to call it when one of your investment decisions turns out to be a lousy one. Cull the time spent with that drainer friend, your time allocation is going into a black hole.

I quit

Last year, I was a quitter. I quit business school. As some of you may know already, it was last year that I started an Executive MBA with Melbourne Business School. It was something that I had thought about on and off for many years, weighing up the pros, cons and whys. I finally enrolled and decided it was something I wanted to invest in. The key outcomes I was chasing with this investment decision were:

1. Strengthen my professional capabilities beyond legal

2. Gain an alternative perspective to solving business problems

3. Build new networks across wider industries beyond my current one

4. Practice practical application of strategic planning and running an organisation

5. Get a piece of paper that would be valuable to my future career prospects

The Executive stream is run precisely to target all of the above. The format of the course is delivered as residential intensives on campus, ie. once a month, for four days, candidates are living at the dorms at the business school, for 18 months. The idea being that you are fully immersed in your learning environment with your peers, and of course that it is less disruptive to the senior working lives of participants in the course. Less disruptive as it may be, it is still an incredible commitment to take out four solid days each month and (attempt to) completely disconnect from family, friends and work obligations. And of course saying goodbye to a social life in exchange for all the prep and group work that happens in between each of those residentials. But I believed my time, energy and money were worth investing into this course to achieve those five investment returns.

Monitoring investment performance

Turns out, not so. Whenever you make a material decision about something, it is important to regularly monitor that decision to ensure it always remains the right one. A bit like a romantic relationship. The relationship might be great at the start, but things perhaps sour by year five and by year eight it seems you’re in negative returns territory. Should you have broken it off after a careful evaluative review at year six? I was continuously monitoring each and every subject to ensure I was indeed getting the value I was chasing. While some of the subjects did indeed shake me intellectually and truly shone a new light on things, almost a third of the way in the returns were not stacking up. I am not a quitter. But I called it. The opportunity cost of continuing to invest in this vehicle, namely the EMBA, achieving average returns and seeing increasing uncertainty of future returns if I were to push on with it was too great. The more I thought about the investment objectives I was targeting the more it seemed I could achieve those returns in spades elsewhere, at a much lower cost. And the piece of paper? The jury’s still out on the real value of that.

Re-deploying capital

With my freed up capital (the four days a month, if not more, of time and over $100k in cash), I re-deployed said capital into:

1. Joining the risk committee of a Board as an independent member (tick objectives one, three and four)

2. Enrolled in several targeted executive management programs at Wharton (tick objectives two, four and five)

3. Obtained a scholarship with McKinsey to complete their Executive Management Program (tick all objectives)

Key take away

Every. Single. Decision. However significant or micro can be chalked down to an investment choice you make. The objectives in my business school example were a combination of short, medium and long term objectives that I was targeting and on reflection, could all be achieved via various alternative avenues. Do not get caught up in the commitment bias of trying to keep to an investment decision. That doesn’t mean you can justify being flaky, non-committal and unreliable. On the contrary. The importance lies in being clear in your mind about the objectives you are aiming to achieve with that decision, and ensuring you review the course and outcome of things you commit to so as to ensure those objectives are being met. Otherwise, it is a dud investment. That’s how the GFC came about.