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simplicity-manuel

Sunk cost fallacy: Doing things you know are wrong, because: "We already spent too much on this"


When we can’t help but stick with things we’ve already invested time and energy in because of what it’s cost us.

It doesn't matter how many reasons there are to change, as part of an innovation culture we are trying to kickstart for example. We'll say to each other: "We’ve come too far!" and "It’s too late!" or "Our reputation will take a hit if we roll back now."


While this way of thinking and operating might seem to make our lives easier in the present moment, falling victim to this cognitive bias isn't great the long run. It stops us from coming up with innovative ways to solve customers’ problems, devise product strategies, and make complex decisions. We'll have a hard time moving forward if we're stuck in our old ways! If you feel this bias starting to creep into your team's thought process, try asking:


- “If we hadn’t already invested in [this existing option], would we still do so now? What would we say to a colleague if they were in the same situation?”


“I think we might be overthinking trivial issues. Thought experiment: say I wave my magic wand and that [trivial issue] is now completely fixed. What would we do now?”


“What are the actual risks/effects of doing this new option? How do they compare to the risks/effects of the current option? Do some of us see it as more risky than others?"


I know it sounds hard, but in fact, the more you try, the easier and better it will get, and of course, there will always be learnings as a result of it.

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