I want to play Whack-A-Mole with The Sunk Cost Fallacy, because it keeps raising its ugly little head in my mentoring sessions, and it has to go!
Let's begin at the beginning. The Sunk Cost Fallacy is defined as the misconception of making logical decisions based on the perceived future value of objects, investments, experiences and relationships, when in truth, these decisions are influenced by emotion. The net result of The Sunk Cost Fallacy dictates the more you have invested in something, the harder it becomes to abandon it - even if continuing is counter-intuitive and against the greater good.
In a business sense, you may have i.e.: invested time and money into a prototype. This money has now been spent and cannot be recovered, so any decisions about the business going forward, should not be based on the time and money spent. The Sunk Cost Fallacy would sound like "Well we spent the money on designing the prototype that way, it'd be a waste of money if we didn't use it" - regardless of the prototype's actual suitability. Refine the prototype and make it right, over the fear of losing unrecoverable resources
DID SOMEONE SAY CAKE?
Here's another doozie: "Well I may as well finish that cake, otherwise it'll go to waste". Nope. The money was spent when buying the cake (or its ingredients), and cannot now be recovered. You eating the remainder of the cake won't save it going to waste, it'll only send it to your waist; potentially exacerbating your weight control concerns. Worth it?
Then there are the relationship dilemmas, when you choose not to end an unhappy relationship because you have been together for a long time. Wait...what?! Why would you cling to a mistake simply because you spent a long time making it? The unhappy years you spent together are gone and cannot be reclaimed, so why throw another decade down the toilet in hot pursuit? I know you can't always apply logic to affairs of the heart, but how about applying self-love and self-preservation into the service of your ultimate joy and peace? The trouble is, we all operate under the assumption that we have more time than we do.
The brutal truth is this, when the horse is dead, it's time to get off. To follow the metaphor, it doesn't matter that you've had the horse from a foal, it is now dead, it is not coming back and you cannot ride it forwards any longer. Now is the time to look for alternatives. Acceptance is obviously key here, as too is the mastery over your emotions. I'm not saying this is necessarily easy, but it is essential. There is an art to letting go at the right time.
BUT KARAN, AREN'T YOU ALWAYS BANGING ON ABOUT NOT QUITTING?
Yes I am, and I will continue to do so. This isn't about quitting, this is about course correction. Quitting is permanent. A course correction is an adjustment, an acknowledgement and acceptance that something isn't quite right, and taking corrective measures. Here's an example of what I mean, and it's a true story to boot: I was bombing along the M42 eastbound (adhering to the speed limit, obviously), on my way home from Birmingham airport. As is my wont, I went sailing past the junction for the M6. Again. The road I was on wasn't going to take me home, so I slung myself around the next exit and got myself back on track. If I had quit, I'd have stopped on the hard shoulder and curled into the fetal position, sulking and feeling sorry for myself. There's a difference.
Please stop looking forlornly at what's past and open your eyes to what's possible for the future. By looking back you're wasting time and energy, your future needs you now. What's gone before has served you well. Your past has been a faithful servant, dispensing valuable lessons and growth. Now is the time to take what you've learnt, and all you have accrued, and use it to fuel your motion forwards.
Memories will take you back, but your dreams will take you forward
The Sunk Cost Fallacy binds us to mistakes, the people we have outgrown, or the things which no longer serve us. Remove the emotion and see the circumstances for how they truly are. Our sadness and disappointments in life are always tied to expectation. The Sunk Cost Fallacy, by definition, is the misconception of making logical decisions based on the perceived future value of objects, investments, experiences and relationships. Perceived future value. That sounds an awful lot like expectation to me.
Take what has happened, learn from it, course correct as necessary and move on. Anything less and you're allowing The Sunk Cost Fallacy to continue holding your success hostage - don't allow it!
By doing your best in this moment, puts you in the best place in the next moment
Have you ever been to the cinema and ended up watching a truly awful movie right through to the end, because you'd paid for the tickets and it'd be a waste otherwise? Bingo! There's the Sunk Cost Fallacy nibbling away at your logic. You're half way through a terrible movie, the money and time is spent, you can't get it back. By sitting through the remainder of the movie is only going to make you miserable throughout, and stuck in traffic at the end. Why? You will not have wrung any further enjoyment or value from the crap movie, so why put yourself through it? Cut your losses. Leave the cinema and do something more pleasurable with the time you have spare. Life is too short!
I have heard so many examples of this thinking. Look at it this way instead: You invested time and money into your prototype, and it's now less than ideal. There are bugs, glitches, flaws which are going to come back and bite you on the arse one day; effectively rendering this prototype a false economy. It's going to cost you considerably more in not only time and money, but in reputation and stock value, when you issue a recall, replacement or patch later. Rather than throwing good money after bad by continuing under The Sunk Cost Fallacy, recognise and accept the flaws, bugs and glitches and fix them. Do the right thing at the right time.
