Manage Your Project Portfolio, 2nd Edition

Beware of the Sunk Cost Fallacy

In high tech, we change our driving force over time. We often call this a “pivot.” (See The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses  [Rie11] to see how organizations can pivot to the next possibility.)

I sometimes hear people say, “We’ve invested so much in this effort. Can’t we just finish it?” Back in ​Don’t Recommit Because of Sunk Cost​ I warned you about recommitting because of sunk cost. It’s the same idea here.

If you are pivoting, or changing your driving force, do not consider sunk cost. You’ve spent that money. You may never do anything like that again. Conduct a retrospective (what made us think this was a good idea?), have a celebration, ...