Sunk Costs & Floating Bubbles

The best preparation for tomorrow is doing your best today. – H. Jackson Brown, Jr.

In business, there is the idea of sunk cost. Sunk Costs are locked forever in our past, and we cannot change them. Humans seem to have psychological hang-ups about sunk costs. They worry at us viscerally.

We see this in Vegas, where people play the same machine or place the same bet, believing they must get their money back eventually. We see this in the stock market, where investors will double down on bad buys for ineffective companies.

It is a hard lesson to learn, how to walk away from poor, prior choices.

Make no mistake – there is value in history. The challenge is recognising when to leave baggage in the past. There are helpful idioms – this is not a particularly new idea, after all. “Do not pour new wine into old wineskins” and “Don’t throw good money after bad” are just a few.

My thought this week is simple. There is an energy about campus I find infectious and addicting. As I approach my tasks this week, I want not to let past structures, actions, and costs influence my choices and recommendations for the present. Instead, I’ll mindfully ask: “What is the best use, today, for the resources entrusted to my care?”

From time, talents, or funds, what resources are in your care? What will you let go, and what is bubbling to the top?

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professorwiley

Matt Wiley is a tenured, associate professor of mathematics with awards in both mathematics education and honour student engagement. He earned an assortment of degrees in computer science, business, and pure mathematics from the University of California and Texas A&M systems. He is the director of quality enhancement at Victoria College, assisting in the development and implementation of a comprehensive assessment program to enhance institutional performance outcomes. A programmer, a published author, a mathematician, and a transformational leader, Matt has always melded his passion for writing with his joy of logical problem solving and data science. From the boardroom to the classroom, he enjoys finding dynamic ways to partner with interdisciplinary and diverse teams to make complex ideas and projects understandable and solvable.

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