When I went to school for a computer programming degree, I was disappointed to learn that I had to take a lot of stuff that had nothing to do with programming. I guess they wanted me to have a ‘well-rounded education.’ I also think they needed to keep professors employed to teach classes no one would take otherwise. Like speech.
As it turned out. speech class was fun. There were also other mandatory classes where I learned useful things. Like accounting. And the one thing I remember most from two semesters of accounting aside from debits on the left, credits on the right, was the principle of sunk cost.
I don’t know that I ever used that principle in accounting for my businesses, but I have used it in many other aspects of my life.
When applied to accounting, the principle was a bit hard to grasp, but the teacher gave a great example that drove the point home.
You are standing in line at the grocery store, and you are not moving. The line next to you is moving faster. Some people would not move to the faster line because they’ve already spent so much time in this line; they may as well stick it out.
But that’s wrong. The time you have already spent in that line is sunk cost. You can never get that time back; it is gone forever. The only basis for making your decision should be future time. If you move to the faster line, you will waste less of your future time than if you stayed where you are.
That is sunk cost in a nutshell.
And not applying that principle to your workday is how many of you keep losing productivity.
It goes something like this. You are working on a project or maybe managing a meeting. You realize that it is a waste of time. Completing the project isn’t going to net you or your company any benefit. The meeting isn’t going anywhere, and you are not only wasting your time but that of your employees. It doesn’t matter how long you have been at it when you come to this conclusion.
How often does that happen to you? Depending on your company and work environment, it could be a daily occurrence. And then what happens? You think, “Well, I’ve spent this much time; I may as well finish.”
But that is wrong.
Turn the thought around and think of it this way. “I’ve wasted an hour on this; I may as well waste two more.” How does that sound? We waste time because we have already wasted time. Does that make sense?
There is another accounting principle.
Cut your losses.
You will never regain the time you have wasted already. You’ve already realized that completing the task won’t earn any return, so just stop. Don’t keep spending time. Cut your losses. Losing more time won’t make the time already wasted suddenly worth something.
The thought usually is that if you stop now, then everything you’ve done already is a waste of time. But here’s the thing.
It’s a waste of time anyway. You have already established that. That time is wasted. You can’t get it back. You can’t start over. The only decision you can make right now is whether you continue wasting time or stop wasting time.
Let’s go back to the meeting. How many of you have sat through meetings that were a complete waste of time? Many of you would argue that all meetings are a waste of time. I happen to agree with that. They shouldn’t be, but they are. And unfortunately, if you are required to be there by your boss, you probably don’t have any choice.
Or do you?
There is a popular saying right now, Be The Change. The idea is that all of us can make little changes in how things are done. It may not seem to make a difference, but eventually, it just might.
So, be the change. Interrupt the meeting and ask this question. If we finish this meeting, what have we accomplished? If that is met with blank stares and confused looks, propose that you all stop wasting time and get back to work.
Yeah, I know what you’re thinking; that’ll happen. You’ll just get branded as a trouble-maker.
It’s your employer’s time, but it’s your life. Be the change. Maybe it won’t matter. But just perhaps, they stop inviting you to meetings. Win!
Or better yet, someone else starts listening. Maybe someone else speaks up with the same thought. Just maybe, you can prevent wasting two hours in a meeting just because you’ve already lost one.
But what if you are the boss or the manager? What if it’s your meeting? It doesn’t matter. Be a leader. Show that you have made a mistake and are willing to admit and correct it. Stop the meeting. “Hey, you know what? I think we are just spinning our wheels here. Let’s drop this and get back to work.”
I’ve never once known that to happen, but if it had, that boss would have earned my respect and gratitude.
Be the change.
What about that project your boss gave you? After you dig into it, you discover that it is a waste of time. It’s not going to accomplish anything. You could keep quiet and finish it. Or you could go to your boss, lay it out and explain your reasoning.
If you have the type of boss that would appreciate you bringing that to them because you just saved the company money, that’s a win-win. If you have the kind of boss that would throw you under the bus because you dared question their authority, it’s time to look for a new job.
Why? Because you have been wasting your time.
Wasting more time at the same job isn’t going to get your time back. It’s just more of your life lost.
As it says on sunk costs:
In business, sunk costs are typically not included in consideration when making future decisions, as they are seen as irrelevant to current and future budgetary concerns.
Stop using the excuse that you have already wasted time on a project to complete it if that just means wasting more time. Cut your losses, chalk it up to experience and move on.