How can you avoid the sunk cost fallacy in your Creative Strategy?
The sunk cost fallacy is a common cognitive bias that affects your creative strategy. It occurs when you continue to invest time, money, or resources into a project or idea that is not working, simply because you have already invested so much in it. This can lead to poor decisions, wasted resources, and missed opportunities. How can you avoid the sunk cost fallacy in your creative strategy? Here are some tips to help you.
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Murali SunderraghavanCEO, klib Corporate Library(Books) | Let’s make reading accessible. Curated library for your workspace; learn more at…
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Shyama Prasad G.CEO @ Madhusudan Health Care | Certified NLP Practitioner & Co-Active Leadership Coach
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Vinod YadavGrowth Marketing Lead @ Freo | Digital Campaign Strategy
The first step to avoid the sunk cost fallacy is to recognize when you are falling for it. If you notice that you are reluctant to change or abandon an idea or project despite evidence that it is not working, or if you are rationalizing your continued investment by focusing on the past costs rather than the future benefits or alternatives, or if you have an emotional attachment to the project and feel giving up would mean admitting failure or losing face, then you need to pause and reevaluate your creative strategy objectively.
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Murali Sunderraghavan
CEO, klib Corporate Library(Books) | Let’s make reading accessible. Curated library for your workspace; learn more at klib.in
Creative work involves complete immersion, and you start associating with the outcome as you have soaked your emotions along with getting the outcome, else the output will be without life. Associated challenge. 1) Bringing your bias as to why you feel it is too good 2) Inability to independently evaluate. 3) Having invested significant effort, somehow want to see it come good (Sunk Cost Fallacy) That’s an effort invested and has no meaning (That’s Sunk Cost) Check if the outcome aligns to Core Purpose WHY you got started. If its not then just move on with a clear realisation any incremental effort is only impacting it negatively and the baggage is preventing us from looking at anything new. Good Luck.
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Chris Joslyn
President - Run Rail
Prior to any capital investment or initiation of a strategy that has substantial monetary requirements, as series of guardrails should be put in place. The foremost of which is a definitive time line of evaluative measurement. You must recognize that a potential pathway has both a probability of success and failure, and that you must decide in advance when to walk away from that path if your goals or benchmarks have not been achieved. I know that I'm aging myself. But, as Kenny Rogers said; you've got to know when to hold them, know when to fold them.
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Brian Maiko
Bcom, CPA-K, AKIB | Investment & Financing | Strategy | Cashflows | Budgeting & Planning | Growth | CRM |
To avoid the sunk cost fallacy in your creative strategy, focus on future potential rather than past investments. Regularly assess your projects objectively, considering their current value and future prospects. If a project isn't meeting expectations or aligning with your goals, be willing to cut your losses and reallocate resources to more promising endeavors. Encourage a culture of experimentation and learning from failures, emphasizing the importance of adapting and evolving strategies based on new information. By prioritizing future benefits over past investments, you can avoid being trapped by the sunk cost fallacy and make more strategic and effective creative decisions.
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Rose Gomes
Product & Data Analytics | Product Discovery | Digital Product Design | Product Marketing | Liderança e Estratégia de Negócios | Inteligência Artificial em Negócios Digitais | Digital Product Leadership
Em um projeto pessoal de marketing digital, me deparei com a falácia do custo afundado. Investimos considerável tempo e recursos em uma campanha de mídia social que não estava gerando os resultados esperados. Apesar das métricas indicarem que precisávamos fazer uma mudança de direção, eu relutava em abandonar o projeto, justificando meu investimento prévio nele. No entanto, ao reconhecer essa tendência, fiz uma pausa para reavaliar objetivamente a situação. Percebi que persistir na mesma estratégia não era benéfico para o nosso objetivo final. Essa reflexão me permitiu tomar uma decisão mais informada e abandonar o projeto em favor de uma abordagem mais eficaz.
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Daniel Murphy
Director Regional de Finanzas y Marketing en OMEN | Estrategia | Transformación Empresarial | Expansión de Negocios
Conciencia: el primer paso es reconocer que la falacia del coste hundido es un sesgo cognitivo común. Aceptar que las inversiones pasadas no deberían influir en las decisiones futuras es crucial. Objetividad: centrar las decisiones estratégicas en los objetivos a largo plazo y en las expectativas de resultados futuros, en lugar de en los costes incurridos hasta el momento. Revisiones periódicas: implementar revisiones regulares de proyectos para evaluar su viabilidad y alineación con los objetivos estratégicos actuales. Análisis de datos: utilizar datos y análisis para fundamentar la toma de decisiones. Aprender de los errores: fomentar una cultura organizacional donde los errores se ven como oportunidades de aprendizaje.
To avoid the sunk cost fallacy, the second step is to evaluate the alternatives to your current project or idea. Ask yourself: what are the opportunity costs of continuing with the project or idea, and what are the potential benefits of pursuing a different or new project or idea? Additionally, consider the risks and uncertainties of both continuing with the project or idea and switching to a different or new one. Be aware of any assumptions and biases that may be influencing your decision, as they may lead you to overestimate the value of your project or idea and underestimate the value of the alternatives. By comparing the pros and cons of each option, you can make an informed and rational decision about your creative strategy.
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Rose Gomes
Product & Data Analytics | Product Discovery | Digital Product Design | Product Marketing | Liderança e Estratégia de Negócios | Inteligência Artificial em Negócios Digitais | Digital Product Leadership
Em um projeto pessoalde desenvolvimento de produto, me vi diante da falácia do custo afundado. Após investir meses em um conceito que não estava ganhando tração no mercado, me vi relutante em considerar outras alternativas. No entanto, ao avaliar as alternativas, percebi que continuar com o projeto original poderia resultar em custos adicionais sem garantia de sucesso futuro. Avaliei os custos de oportunidade de persistir com o projeto atual versus explorar novas ideias e os potenciais benefícios de adotar uma abordagem diferente. Ao fazer essa análise objetiva, pude tomar uma decisão informada e direcionar nossos recursos para uma alternativa mais promissora, evitando assim a armadilha do custo afundado.
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The third step to avoid the sunk cost fallacy is to cut your losses if you decide that your project or idea is not worth pursuing. You need to accept that the past costs are sunk and cannot be recovered, and that they should not affect your future decisions. You need to focus on the present and the future, and not dwell on the past. You need to learn from your mistakes and failures, and use them as feedback and opportunities for improvement. You need to celebrate your successes and achievements, and use them as motivation and inspiration.
By cutting your losses, you can free yourself from the sunk cost fallacy and move on to more productive and creative endeavors.
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Rose Gomes
Product & Data Analytics | Product Discovery | Digital Product Design | Product Marketing | Liderança e Estratégia de Negócios | Inteligência Artificial em Negócios Digitais | Digital Product Leadership
Em um projeto de produto, nos deparamos com a falácia do custo afundado. Após meses de desenvolvimento e investimento significativo, ficou claro que o produto não estava ganhando tração no mercado conforme o planejado. Embora inicialmente relutante em admitir o fracasso e abandonar o projeto, percebi a necessidade de reduzir nossas perdas. Aceitar que os recursos já investidos eram irreversíveis foi crucial para seguir em frente. Decidimos encerrar o projeto e realocar nossos esforços para uma nova iniciativa. Ao fazê-lo, aprendemos valiosas lições para estratégias futuras.
The fourth step to avoid the sunk cost fallacy is to seek feedback from others who can offer you a different perspective or insight on your creative strategy. You need to ask for honest and constructive feedback from people who have relevant expertise, experience, or knowledge, and who can challenge your assumptions and biases. You need to listen to their feedback with an open mind and a willingness to learn and improve. You need to avoid defensive or confirmation bias, and be ready to change or abandon your project or idea if the feedback suggests that it is not working.
By seeking feedback, you can gain valuable insights and information that can help you avoid the sunk cost fallacy and improve your creative strategy.
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Rose Gomes
Product & Data Analytics | Product Discovery | Digital Product Design | Product Marketing | Liderança e Estratégia de Negócios | Inteligência Artificial em Negócios Digitais | Digital Product Leadership
Me deparei com a possibilidade de estar preso em custo afundado. Após semanas de implementação de uma estratégia que não parecia gerar os resultados esperados, decidimos buscar feedback de colegas de equipe e mentores experientes. Ao compartilhar nossos desafios e resultados até então, recebemos perspectivas valiosas que não havia considerado anteriormente. Ouvindo atentamente suas sugestões e críticas, pudemos ver além do investimento emocional que havia feito no projeto e avaliar objetivamente sua viabilidade. Com base nesse feedback, ajustamos nossa estratégia e realocar recursos para áreas mais promissoras. Essa abordagem me permitiu evitar a falácia do custo afundado e orientar nosso projeto em uma direção mais produtiva e eficaz.
The fifth step to avoid the sunk cost fallacy is to experiment and iterate your creative strategy. You need to test your project or idea with real users, customers, or audiences, and measure its performance and impact. You need to collect and analyze data and evidence that can help you validate or invalidate your project or idea. You need to be flexible and adaptable, and be ready to pivot or adjust your project or idea based on the results and feedback. You need to embrace uncertainty and ambiguity, and be willing to try new things and learn from them.
By experimenting and iterating, you can avoid the sunk cost fallacy and optimize your creative strategy.
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Rose Gomes
Product & Data Analytics | Product Discovery | Digital Product Design | Product Marketing | Liderança e Estratégia de Negócios | Inteligência Artificial em Negócios Digitais | Digital Product Leadership
Em um projeto de desenvolvimento de um aplicativo, enfrentamos o desafio do custo afundado. Após investimentos significativos na versão inicial do aplicativo, enfrentamos problemas de usabilidade e feedback negativo. Em vez de persistir na mesma abordagem, optamos por experimentar e iterar. Realizamos testes com usuários reais, coletamos feedback e ajustamos a estratégia com base nos dados, resultando no lançamento de uma versão melhorada que atendeu às necessidades dos usuários.
The sixth step to avoiding the sunk cost fallacy is to review and reflect on your creative strategy. You should consider what you learned from your project or idea, such as successes and failures, as well as the opportunity costs and benefits of the alternatives. Furthermore, you should evaluate the feedback you received, and measure and evaluate your project or idea through experiments and iterations. By taking the time to review and reflect, you can avoid the sunk cost fallacy and enhance your creative strategy.
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Shyama Prasad G.
CEO @ Madhusudan Health Care | Certified NLP Practitioner & Co-Active Leadership Coach
In my experience, creative strategies are life lines for growth. At the same time we must know when to get detached, in case business is not doing well or we foresee the trend is not favourable. Many entrepreneurs feel powerless to decide in this junction. Giving a power to quitting or changing the course of direction is one of the ways, how we can avoid sunk costs in a creative strategy. Rest all the points have been covered nicely. I remember, during stay in Thailand once I noticed that a guy was selling charcoals to various street eateries. He opted to sell it from its newly purchased SUV. His creative strategy was simply not working from day one. The selling price of charcoal was too less to pay for his SUV investment. We must be aware.
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Vinod Yadav
Growth Marketing Lead @ Freo | Digital Campaign Strategy
This is very common when you are emotionally attached with the project. Always look at the number and it has to be decided at the beginning only. Suppose you want to generate 100k leads. You have got to plan in advance how much you are going to get from which channel and how much you are going to spend on that channel. If any of these things are not working just stop it in time so you have the chance to save the cost and have got time to work on plan B which you must be having when are you going to execute the plan A.
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Wilson Joel Dsouza
|Google Project Management | IT Service Management|AI Tools|CMDB|IT Asset Management | IT consultancy |Project Management|Software Automation|Hardware Asset management|SCADA|Industrial Automation|
To mitigate buffer overflow attacks, incorporate languages with inherent memory safety and perform thorough code reviews to catch vulnerabilities early. Utilize compilers with built-in protections like ASLR and enforce bounds checking in vulnerable languages like C/C++. Educate developers on secure coding practices and implement runtime protections to detect exploits. Regularly audit and conduct penetration testing to identify and address security flaws efficiently, ensuring a robust defense against potential buffer overflow vulnerabilities
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Oluwagbenga Olasehinde
Chemical Engineer, Problem solver, Process Engineer, Waste management, Eco-friendly Solutions
Know when to switch gears: just like driving a vehicle, you change gears depending on the terrain, likewise in any project you must know when to change the gears, press the brake, reverse or pull to a halt. And you can only know this by constantly reassessing the project. Sometimes you have gone so far in a project that stopping it suddenly seems very difficult, even after discovering its futility. You can reduce the intensity of your effort, pass it to others, or pivot it to a new thing. However, most times our efforts are not wasted as we mostly think and the expected result is usually possible, we only haven't figured it out.
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Sabah Khan
Instructional Design | Strategy | Innovation | Versatile Writer | Avid Reader |
Add sunk cost fallacy column in your expenses. You can’t avoid it. I don’t know any business who hasn’t experienced it. Hence, better to include it in your financials, and you don’t touch it. It’s that constant you keep seeing year after year, and when it becomes a variable, you had already accounted for it. And since you are a strategist, you know how to fund your business.