I don’t know where we’re headed, but we are making good time! —Yogi Bera
One of the constant themes I encounter in my coaching practice is when clients come to me after pursuing a path of promise and discovering that the path was illusory. At least, after repeated experiences of “sameness,” they want to know how long to keep doing what they started and how to move forward. Typical examples of these themes include repeated promises of promotions that do not come through; no change in their status after chasing new certifications to enhance their skills or résumé; pursuing a new degree to enhance their résumé, among others.
This blog is about the concept of how increasing your “sunk costs” deludes you into continuing on that path, when you suspect that the path is illusory. Much like a Vegas gambler, who after dumping all their coins into a slot machine, thinks that their last coin will hit the jackpot! I am writing this blog to remind readers to alert themselves of this fallacy and to do something that will help them get back on track to meet their stated objectives.
Promotion promise: Most employees are looking for promotion after a few years in their role. They work hard and convince themselves by looking around and rationalizing that if Joe was promoted last year, after just doing little to deserve it I certainly deserve more than he did, since I work much harder and my contributions are much more valuable to the group. So, you march into your boss’s office and ask them for what the timeline is for your next promotion. The boss reclines in his chair, throws his feet on the desk in front of him, folds his hands behind his head, and with a show of some ersatz concern on his face goes, Hmmm, let’s see now: I just promoted Joe last year, so, for me to promote another team member in my group I’ll have to wait two years OR have that person contribute something exceptional in this group so all my higher ups notice it. He pauses, scratching his chin, with a quizzical—even enlightened—look on his face prompting you to say something.
You jump in and volunteer for that long-pending infrastructure initiative that no one had time to work on. You say, OK, I’ll give you my plan for that infrastructure project that never got off the ground and I’ll complete that on my own time and you can use that as a proof point of my initiative and leadership contribution to put my promotion through, when the project is complete.
He now smiles and agrees for you to work on it with his full support. For the next 6-9 months you toil 16-hour days doing two jobs: pulling your regular duties and the new infrastructure project that you underestimated in its scope. Two moths before the next review cycle you complete the project, and the higher-ups congratulate your boss for his heroism and leadership for coming through. He gets immediately promoted to Senior Director and is assigned to a larger organization, and you get a new boss from the outside. When you tell your new boss the history of this infrastructure project and what your just-promoted boss had promised you, he promptly responds, that infrastructure project is no longer my priority; I have other fish to fry. Let me get settled and get back to you!
You patiently wait and a few months later a new initiative is pushed down the organization to cut costs and head count. Your new boss reminds you that you are lucky that you were not on that RIF list. You breathe a sigh of relief.
Now you try to ingratiate yourself with your new boss and find yet another project to volunteer for the next round of APR with a hope for your promotion. You hunker down and start your 16-hour-day routine all over again. You reason that you have already figured out how to get these projects done—and help your boss get to their next level!—so you figure the next time is the charm, so you mislead yourself all over again. This is the sink-cost fallacy getting the best of you!
What you should do, instead: as soon as the old boss got promoted on the backs of your toil and success, you must update your résumé, showcase your leadership in getting things done that were outside your responsibility and market yourself at the next level in the open market. The other lesson from this trial, too, is to document your plan after the discussion with your boss and send them an email capturing this agreement. In most cases the boss will not respond or even acknowledge this arrangement, in which case your email prevails. Of course, this is not a guarantee that the new boss will honor that agreement.
Pursuing a new degree: B-schools often lure mid-career professionals in pursuing an MBA degree to advance their careers. Most B-schools do such a good job of marketing their MBA degrees and summer programs that most see that as their ticket to top management positions. Although an MBA can be a helpful addition to one’s résumé, often it is not a requirement for advancement in all cases. This is especially true in technology where most engineers and scientists are under the misguided notion that adding MBA to their educational credentials will open new doors for them for executive roles. Spending two or so years and digging into your own savings (sometimes a few hundred thousand dollars even borrowed on student loan programs) to pursue a questionable degree is worth some serious thought.
Instead, showing leadership initiative at your current role, taking some meaningful business courses (finance, marketing, management) on line, and applying what you learn in these courses to advance your station and to build your résumé with specific accomplishments that show your leadership is a more effective way to go in the direction you desire. I am not advocating not going after business courses or even an MBA, but if your company deems that as a way for you to advance your skills and sponsors you to pursue such a degree without putting out your own resources, then it is something worthwhile for you to pursue because now your company is on the hook for doing something with you after your degree.
Taking selected courses, applying the knowledge to work differently in your current job, and then burnishing your résumé with that message is a far more effective way to migrate to management ranks than blindly pursuing an MBA and realizing that it did not make any difference in your career.
Boondoggle projects: Many companies launch new projects with great fanfare. Even CEOs take special interest in such projects when some loudmouth has done a good job selling such ideas to top executives. Initially, star players are selected to chase such projects, but as things change new projects take their place, with the original team continuing its work as people become aware of their sunk costs, burn rate, and changing priorities. Someone needs to take charge of such boondoggles and cut the losses before wholesale cost cutting initiatives come down from the top. So, if you are involved in a project that has now become marginally useful or even sidelined, save your job and your career by proposing “deep sixing” such projects and getting on some more résumé-building tasks!
Marginalized Functional Areas: In large organizations senior executives are fond of building functional empires just to brag about the scope of their areas of responsibility, often without adding much value with redundant functions. For example, one of my senior clients was invited to lead an Outbound Product Management (OPM) function in a large enterprise business. Soon after she joined, she discovered that there were other functions that overlap her area, without clear responsibility or accountability delineation. There were Inbound Product Management, GTM, Sales, Sales Support, and Customer Support areas, all with widely overlapping areas of responsibilities. The problem my client encountered was that there was no clear success criteria for her performance, and depending on the boss—they played musical chairs every few months—my client got varied ratings for her performance for producing the same results. After suffering this fate and frustration for two years I asked my client to move out of that organization to protect her résumé and her career. Although she initially resisted thinking that after having spent two years there, that something would change for the better, she saw the writing on the wall and made the required change in her station.
The sunk-cost fallacy is a real threat to many careers, and one must recognize their impact. If you are chasing such a fallacy to advance your own career become aware of what is going on and take some action to protect and save your career. Do it now!
Good luck!
