Sunk Cost Awareness

Sunk Cost Awareness

Past spend—time, money, reputation—does not justify future spend. Decide from incremental costs and benefits from today forward, while acknowledging emotions honestly.

When to Use

• Language like “we’ve already invested…” dominates the debate.
• Projects linger after goals drift because stopping feels like failure.

Behaviors

• Define sunk vs incremental: list what is unrecoverable vs what you still must pay to continue or to pivot.
• Forward-looking question: “What is the best next dollar (hour) from here?” Ignore prior dollars in the rationale.
• Clean-slate test: “If I were starting fresh today with today’s information, would I choose this?” If no, plan an exit or pivot path.
• Escalation-of-commitment alarms: doubling down after each bad signal, blame externalizing, moving goalposts to justify continue.
• Honor emotion, decide on merits: embarrassment and identity attachment are real—name them, then separate from the economic case.
• Stop rules: pre-commit thresholds (metrics, dates, quality bars) that trigger review before more investment.
• Document the kill/pivot: make the decision reversible in culture, not just in logic—celebrate saved opportunity cost.

Examples

Example 1: Bad vendor year: sunk fees are gone; compare remaining contract pain vs migration cost from today, not “we paid for three years.”

Example 2: Feature nobody uses: clean-slate says cut; incremental fix only if cheap learning remains; otherwise redirect team to validated work.