A sunk cost decision* is the same as a sunk cost investment – if it’s wrong, it’s wrong, but ego and character and a human reluctance to revisit awkward situations can turn such decisions into expensive mistakes. Admitting to a sunk cost can lead to a loss of face and reputation, and no one wants that.
by Dirk Frame
Mixed Management
Some managers, business leaders and politicians make a virtue of being resolute and sticking to their guns no matter what, and are often admired for it. Such leaders are good at presenting big ideas, enjoying the limelight, and staunchly defending a sunk decision regardless of the outcome.
Others are specialists for the dark times, receiverships and turnarounds. When they have done their job, such troubleshooters are encouraged to leave and make way for more optimistic types and those with “flair.” They have picked up the pieces from the sunk decisions made by others, but there’s not much glory to be had for this breed who surely drive sensible cars, wear sensible suits and go on sensible vacations.
The third breed of managers are open to persuasion. They are flexible in all circumstances, can be swayed by a good argument and listen to the evidence. They are credible and acceptable because they don’t often have personal sunk decisions to deal with. However, they may fail to assert their point of view and while they are liked, they generally get ignored when something important comes along.