reducing workplace bias
the sunk cost fallacy refers to the
tendency to keep pursuing a course of
action
simply because you have already invested
in it regardless of its probability of
success
the sunk cost fallacy not only manifests
as a waste of resources
like time energy and money it reflects
an inability to adapt effectively
which is one of the keys to success
the lesson and meditation will enable
you to see
and appreciate the dangers of this
fallacy and increase your awareness of
the importance of effective adaptation
the sunk cost fallacy also known as the
irrational escalation bias occurs when
people continue to invest in something
despite the fact that the evidence shows
that the decision to make the investment
initially
was flawed
it's an example of we've put this much
into it this far
so we might as well continue to make it
work
this fallacy doesn't have to be only
about financial investments
it could be the investment of time or
energy or even commitment
for example you promoted someone to a
new position but they're not working
out how long do you continue with that
decision
one of the problems of the sunk cost
fallacy is that typically
to get beyond it you have to admit that
the initial judgment was wrong
or at least hasn't worked out the way
originally envisioned
this can apply in many areas of life
like relationships of all sorts
as well as military policy and strategy
and on military strategy the call to
continue the conflict on the grounds
that we cannot let those who have died
perish in vain is an example of sunk
cost reasoning
this can be a major problem for
organizations of all types
it can apply to major strategy or hiring
decisions
promotional campaigns or mergers and
acquisitions
nobody likes to admit they have made a
mistake and most people will go to
all sorts of lengths even extremes and
use other cognitive biases like
confirmation bias
to justify their original decisions or
they might admit that the initial
decision
hasn't worked out but seeks spurious
reasons to explain the events
knowing when to pull the plug on the
follow-through of a decision
is a critical leadership and management
skill
in the long term it is better to admit
that the initial decision hasn't panned
out as expected
for whatever reason and to move on
rather than steadfastly sticking to
actions that might continue to produce
problems sooner or later you are almost
certain to have to face the consequence
of a decision that didn't pan out
it is one thing to make a decision that
hasn't worked as planned
and another to continue with it in the
face of mounting evidence that it should
be
abandoned under those circumstances
there will be two decisions that will
have to be defended
the initial decision and the decision to
continue
one of the biases you have to contend
with in this situation
are other people using the hindsight
bias and claiming that they knew
all along the decision wouldn't work out
even in the face of
absolutely no evidence to support that
contention
the key to any problem is to work out
the best solution
and hopefully avoid getting into a
meaningless
but potentially damaging tug of war with
you
embracing the sunk cost fallacy and your
opponents invoking the hindsight bias
the fact is that circumstances change
and while various cognitive biases can
be invoked to make different parties
feel better
the only challenge is adapting
effectively and
rationally to the present circumstances
like many of the other cognitive biases
the sunk cost fallacy
is often invoked in a complex situation
where there are several factors under
consideration
or should be the point is that pursuing
something
that is not working that all the
previous investment in the project
can't be allowed to go to waste
meditation
no matter how far you've gone down the
wrong road
turn back turkish proverb
it can be hard to discontinue a course
of action
because it might feel like you are
effectively killing
or wasting all the resources that have
been used in the project
thus far however we need also
to recognize that many times we learn
very valuable lessons from failure
education is expensive
you can't expect to reliably predict the
future
there will undoubtedly be times when you
go with your best
and most reasoned decisions and for
unexpected reasons
things don't work out
adapt and learn but don't persist
merely on the grounds of sunk costs
adapt and learn but don't
persist merely on the grounds of some
costs
imagine getting lost on a journey you
have driven a long time down this
one road but it looks like it's a dead
end
what do you do
no matter how far you've gone down the
wrong road
turn back
no matter how far you've gone down the
wrong road
turn back
you may think you have wasted time and
fuel
but that is only if you see your journey
as part of a particular destination
if you had taken the same road with no
expectations of where
it would lead you might see the time and
the fuel spent
as a reasonable part of the experience
of traveling down
new paths it's your expectations
that make you see the use of resources
as sunk
costs
no matter how far you've gone down the
wrong road
turn back
no matter how far you've gone down the
wrong road
turn back
adaptation is the essence of good
leadership
great leaders and managers don't need to
make excuses
great leaders and managers base
reality
great leaders and managers engage in
critical thinking
not biased shortcuts
great leaders and managers use reason
to reach decisions and aren't overly
influenced by emotions
great leaders and managers understand
cognitive biases and don't allow
themselves to be
influenced by them
no matter how far they've gone down the
wrong road
great leaders and managers are not
afraid to turn
back
reducing workplace bias