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Some managers, business leaders and politicians make
a virtue of being resolute and sticking to their guns no
matter what, and are often admired for it. Such leaders
are good at presenting big ideas, enjoying the limelight,
and staunchly defending a sunk decision regardless of
Others are specialists for the dark times, receiverships
and turnarounds. When they have done their job, such
troubleshooters are encouraged to leave and make way
for more optimistic types and those with “flair.” They
have picked up the pieces from the sunk decisions
made by others, but there’s not much glory to be had for
this breed who surely drive sensible cars, wear sensible
suits and go on sensible vacations.
The third breed of managers are open to persuasion.
They are flexible in all circumstances, can be swayed
by a good argument and listen to the evidence. They are
credible and acceptable because they don’t often have
personal sunk decisions to deal with. However, they
may fail to assert their point of view and while they
are liked, they generally get ignored when something
important comes along.
A sunk cost decision* is the same as a sunk cost investment –
if it’s wrong, it’s wrong, but ego and character and a human
reluctance to revisit awkward situations can turn such decisions
into expensive mistakes. Admitting to a sunk cost can lead to a
loss of face and reputation, and no one wants that.
Text: Dirk Frame