Simplify

Recently, I’ve found myself in several situations where I realized the complexity of each one had spun out of control.  Rather than be able to make a rational assessment of the situation, collect a set of specific data, and make a decision I found myself in a discussion that was going around in circles.

When I was a kid, my dad used to refer to these situations as "complicated mistakes."  You’d make a mistake and, in an effort to deal with it, you’d pile another mistake on top of it.  Before you knew it, you had a complicated mistake which was much harder to deal with.

I’ve worked hard in my life to understand what a "sunk cost" was an how best to deal with one.  While I’m not perfect, I’m pretty good at assessing the situation and removing the notion of the sunk cost from my going forward analysis.

When you have difficulty understanding how to deal with a sunk cost and you get tangled up in a complicated mistake, a real mess occurs.  You keep trying to fix the complicated mistake and justify the ongoing future investment of time, energy, and money based on what is essentially a sunk cost that you are unlikely to recover.  Rather than valuing your sunk cost at zero and simply evaluating the future potential of the opportunity, you compound the complicated mistake even further.

My solution to these situations is to simplify. Completely write off the sunk cost.  Ignore (or void) as many of the historical decisions that created the complicated mistake.  Figure out what your real current reality is and what you want your future state to be.  Then create a plan that connects your current reality to your desired future state.

Start by simplifying things.

  • Eric Willis

    Completely agree on this. I'm actually dealing with a similar situation and the tendency to want to “save” the situation and the emotional/psychological component can really undermine your ability to make a rational decision..which in most cases and especially from “outside looking in”, would be an easy decision. Excellent advice. Sometimes you just have to accept the loss and clean the slate…and make sure you don't repeat the mistakes.

  • John Ball

    I'm a golfer. I don't expect everyone to see the similarities between playing and daily business, but I find myself drawing parallels. The writer and golf instructor Harvey Penick offers that a “double-bogey” (two shots over par) is usually comprised of a bad shot, followed by a bad decision.

  • http://ckstevenson.blogspot.com Chris

    Great advice. This is also the focus all new tools and IT should have: making life/business simpler. If your tool makes my job harder, it's a classic FAIL.

  • Kevin

    I think sunk cost is one of the hardest concepts for people to accept. Even harder is to access historical data to determine trends for forecasting and determining worth of continued investment while avoiding mentioned history of costs.

  • harshy

    There are bu co bucks to be made by people that have the ability to simplify. A great manager will make tasks of their charges simple and straight forward while providing them with all the information they need.

  • http://www.thehighwaygirl.com thehighwaygirl

    Really needed to hear this today. Thanks for the great advice, Brad!

  • Eric Willis

    Completely agree on this. I'm actually dealing with a similar situation and the tendency to want to "save" the situation and the emotional/psychological component can really undermine your ability to make a rational decision..which in most cases and especially from "outside looking in", would be an easy decision. Excellent advice. Sometimes you just have to accept the loss and clean the slate…and make sure you don't repeat the mistakes.

  • John Ball

    I'm a golfer. I don't expect everyone to see the similarities between playing and daily business, but I find myself drawing parallels. The writer and golf instructor Harvey Penick offers that a "double-bogey" (two shots over par) is usually comprised of a bad shot, followed by a bad decision.

  • Chris

    Great advice. This is also the focus all new tools and IT should have: making life/business simpler. If your tool makes my job harder, it's a classic FAIL.

  • http://intensedebate.com/people/thehighwaygirl thehighwaygirl

    Really needed to hear this today. Thanks for the great advice, Brad!

  • Kevin

    I think sunk cost is one of the hardest concepts for people to accept. Even harder is to access historical data to determine trends for forecasting and determining worth of continued investment while avoiding mentioned history of costs.

  • http://intensedebate.com/people/harshy harshy

    There are bu co bucks to be made by people that have the ability to simplify. A great manager will make tasks of their charges simple and straight forward while providing them with all the information they need.