The Sunk Cost decision-making trap inclines us to perpetuate the mistakes of the past.
Illustration: Dating relationships. We’ve all seen it. A couple that is clearly terrible for one another. The relationship is toxic, and if it’s a friend, they might even be candid enough to tell you how hard it is being in the relationship. When you ask the obvious question: “Why are you guys still together?” The answer that you get will most likely be some version of the sunk cost decision making process.
At work, you’ve got an employee that is just not cutting it. You know it. He/She knows it. Your team members know it. Pulling the plug and cutting your losses is a hard thing to do at times, but one that is vital for you as you lead your team or go about your work.
I’ve found that most of the time, the Sunk Cost trap really has little to do with actual cost, at least in the monetary sense. Most of the time it’s an emotional or mental investment on a project or idea that you’ve been pumping time and energy into.
Solutions? Typically hearing from your peers and those close to you is always a wise idea, and it could be here as well. But with Sunk Cost, it’s a completely fresh set of eyes that can quickly identify where your resources are being drained. Often times because the issue is an emotional or mental one, having someone from outside of the situation speak into it (in other words, someone with no dog in the hunt, no emotional or mental attachment), might be the key.
Once you cut ties with that anchor dragging you back, you’ll be smooth sailing in no time.