WHAT IS INABILITY TO CLOSE DOORS AND WHY YOU SHOULD SET FIRE TO YOUR SHIPS
Next to my bed, two dozen books are stacked high. I have dipped in and out of all of them, but am unable to part with even one. I know that sporadic reading won’t help me achieve any real insights, despite the many hours I put in, and that I should really devote myself to one book at a time. So why am I still juggling all twenty-four?
I know a man who is dating three women. He is in love with all three and can imagine starting a family with any of them. However, he simply doesn’t have the heart to choose just one, because then he would be passing up on the other two for good. If he refrains from deciding, all options remain open. The downside is that no real relationship will develop.
In the third century B.C., General Xiang Yu sent his army across the Yangtze River to take on the Qin Dynasty. While his troops slept, he ordered all the ships to be set alight. The next day he told them: ‘You now have a choice: Either you fight to win or you die.’ By removing the option of retreat, he switched their focus to the only thing that mattered: the battle. Spanish conquistador Cortés used the same motivational trick in the sixteenth century. After landing on the east coast of Mexico, he sank his own ship.
Xiang Yu and Cortés are exceptions. We mere mortals do everything we can to keep open the maximum number of options. Psychology professors Dan Ariely and Jiwoong Shin demonstrated the strength of this instinct using a computer game. Players started with 100 points, and on the screen in front of them, three doors appeared – a red one, a blue one and a green one. Opening a door cost a point, but for every room they entered, they could accrue more points. The players reacted logically: they found the most fruitful room, and holed up there for the whole session. Ariely and Shin then changed the rules. If doors were not opened within twelve moves, they started shrinking on the screen and eventually vanished. Players now rushed from door to door to secure access to all potential treasure troves. All this unproductive scrambling meant they scored 15% fewer points than in the previous game. The organisers then added another twist: opening doors now cost three points. The same anxiety kicked in: players frittered away their points trying to keep all doors open. Even when the subjects learned how many points were hidden in each room, nothing changed. Sacrificing options was a price they were not willing to pay.
Why do we act so irrationally? Because the downside to such behaviour is not always apparent. In the financial markets, things are clear: a financial option on a security always costs something. There is no such thing as a free option, but in most other realms, options seem to be free. This is an illusion, however. They also come at a price, but the price tag is often hidden and intangible: each decision costs mental energy and eats up precious time for thinking and living. CEOs who examine every possible expansion option often choose none in the end. Companies that aim to address all customer segments end up addressing no one. Salespeople who chase every single lead close no deals.
We are obsessed with having as many irons as possible in the fire, ruling nothing out and being open to everything. However, this can easily destroy success. We must learn to close doors. A business strategy is primarily a statement on what not to engage in. Adopt a life strategy similar to a corporate strategy: write down what not to pursue in your life. In other words, make calculated decisions to disregard certain possibilities and when an option shows up, test it against your not-to-pursue list. It will not only keep you from trouble but also save you lots of thinking time. Think hard once and then just consult your list instead of having to make up your mind whenever a new door cracks open. Most doors are not worth going through, even when the handle seems to turn so effortlessly.
The above article is from the book The Art of Thinking Clearly by Rolf Dobelli. The article is only for educational and informative purposes to explain and understand cognitive biases. It is a great book, definitely worth a read!