Showing posts with label cost. Show all posts
Showing posts with label cost. Show all posts

Monday, November 11, 2013

The Price of Success

Everything in life comes with a price.  Sometimes it is a small, negligible, barely-even-noticed-it price, which
is easily and often unconsciously paid.  Sometimes it is a bigger price, calling into question... are we willing to pay it?  Everyone focuses on success; what it means to them, how it would change their life, how much they want 'it'.  In focusing only on the desired end result, they then use that to measure where they are at, often berating themselves for not being successful 'yet'.  However, they may not be using an accurate measure for themselves of what they 'truly' want to achieve.

People focus on what they would like to 'have', but fail to focus on what it takes to get there.  If you aren't willing to do what is required to get there, pick a different destination, otherwise you are setting yourself up to fail before you begin.  If you select goals for yourself that you have no intention of EVER doing the work needed to complete it, how could you ever manage to achieve it?

No one has even succeeded without paying a price.  

John Maxwell, (Leadership expert, Author, Pastor, Speaker extraordinaire) tells a story of delivering a speech one day and being approached afterword by a young man who looked at him and said... 'I want to do what you are doing!'  John looked at the young man, smiled and said... 'Of course you do son, but the true question for you is whether you are willing to do everything I have done to get here.'

People don't get great at something overnight.  We all start out bad.  There is a price to getting good at something, at developing your skill.  There are sacrifices and choices 'the great' have made that have allowed them to build their skills to get to great.  Are you willing to make those choices, those sacrifices?

It's easy to get caught up in the dream of success.  But to truly become successful, you must immerse yourself in the actions that are needed to get you there.   You need to be prepared to pay the price that's required for you to get where you want to go.  If you are unwilling, it likely isn't the vision of success that you should hold.  Create another.  Your desire for the success you envision has to be bigger than the price you will need to pay.  If it isn't, then it either isn't the right vision or it isn't big enough.

Opportunities exist around us, doors are there for us to open and walk through.  But those doors stop opening for us when we stop being willing to pay the price that each door requires.  We all hit a point when we are satisfied, when we have created the life we want, the vision we held.  At this point, we likely aren't looking to open too many more doors at any price.

If we aren't there yet though, then we are still building, learning, creating and growing.  We need to be prepared to pay the price for the opportunities we need and want to move forward in our Success Plan.  

What is your definition of Success worth to you?  If it isn't resonating within you, motivating and shaping your days, and you're not where you want to be in life, your definition and vision need a tune-up. Revise them until you have something worth working toward.  The Vision has to be bigger than the Price if you are going to pay the price needed to move forward.  It all comes down to one simple statement...

When we stop paying... we stop playing. 

Monday, October 21, 2013

The True Cost of... Sunk Costs

The term Sunk Costs refers to any investment you have made, whether time, money, or effort, that has already been paid and cannot be recovered.  You have sunk that cost into the activity or event and it's gone forever.

Technically, we should be done with this cost and not continue to be influenced by it but, in actuality, this isn't what happens; largely due to the fact that we are hard-wired to feel loss more strongly than gain. Because sunk-costs represent a loss to us, it is difficult for us to separate ourselves from them.  Psychologist Daniel Kahneman, in his book Thinking Fast and Slow, has this to say about our genetic predisposition to focus on loss...
Organisms that placed more urgency on avoiding threats than they did on maximizing opportunities were more likely to pass on their genes.  So over time, the prospect of losses has become a more powerful motivator on your behavior than the promise of gains.
I was thinking about this concept last night as I recalled a conversation that took place during a Career Planning session I was facilitating that day.  In essence, one of the participants commented that they felt 'trapped' in their existing career because they had spent the past number of years in their current role and, despite the fact they didn't think this was their 'true' dream career, couldn't just walk away and 'start over'. This is the sunk-cost fallacy at work.  This individual would like to consider switching their career but felt that they already had too much invested in their current stream to change.  Rather than shifting to something they would likely enjoy more, they didn't want to 'lose' the investment they had already made.

The biggest impact to us of the fallacy is, of course, that it prevents us from making choices that would serve us best in the future, rather than those negating the feeling of losses from past actions.  The challenge for us is that this fallacy is operating upon us unconsciously, we don't even know that it is creating false logic streams in our decision-making.  Consider...  have you ever gone to the movies only to realize, very early on, that the movie is terrible?  And yet, how often do people get up and leave?  Most stay and watch the movie, complaining bitterly afterward about the wasted money and time.  However, leaving early would have meant they could have mitigated their losses by not investing any more of their time.  Because the ticket was already purchased though, we remain to 'get our money's worth'.  Staying cost us more, but we only fixate on the cost of walking away.

What have you perhaps been holding onto too long simply because of the sunk-costs you have incurred?
  • a relationship that is no longer serving you
  • a career choice that no longer 'fits'
  • a business idea that doesn't work
  • a process or system that doesn't do what it should
  • an advisor or mentor that has run their course
  • an investment that is never going to turn around
The only way to avoid the hidden impact of perceived sunk-costs upon our current decisions is to consciously and openly recognise what they are.  Remind yourself that there is no getting these costs back, they are gone, but that you need not continue to lock your future choices and direction to the decisions of the past.  You have to ensure that you build a bright enough picture of the potential of the future that you will be able to override the pain that the loss represents.  We have to begin working on our rewiring to make future gains so much more appealing.