What’s holding you back?

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It’s not easy to swim with something weighing you down.

Various versions of an old parable tell this story – individuals and organisations are weighed down by their history, old decisions, possessions, assumptions and fears.

In the story, the person carrying the rock has to let go of it in order to survive. In other versions, they are pulled under, and the last words they say as the onlookers urge them to drop the rock is “I can’t, it’s mine.”

This is sometimes called the sunk cost fallacy. You may have invested years of your life and huge amounts of money in a project that cannot be recovered.

Should this past investment influence a decision you have to make now?

Logically, it should not. If the past cannot be changed, you should evaluate the decision purely based on what you will happen as a result in the future – so called future utility.

As human beings, however, this is very hard to do. We have evolved and survived by placing more emphasis on avoiding threats rather than chasing opportunities.

There is a built-in loss aversion mechanism inside our brains that fears losing much more than winning.

And this mechanism can make us take bad decisions when it comes to our businesses, investments, jobs and personal circumstances.

How can you avoid this trap?

One approach is to start with a clean sheet of paper.

Some organizations use zero based budgeting. At the start of each new period, people in the organisation need to ask for money and must justify what they are going to do with it. The previous year’s allocations are cancelled and everyone starts from a zero base.

This means that instead of simply rolling over budgets from previous years, you need to look again at how you do your business and where you should invest time and money the next year.

Some investors have been known to sell their entire portfolios, just so that they can start again with a fresh allocation.

The problem is that letting go of long-held fears and assumptions is not easy.

What you think is possible, achievable and desirable is boxed in by what you already know and believe.

Questioning your assumptions and taking apart long held views may be the only way to really let go of your rocks and move on.

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