cards leaning on a wire rack, invested in something thats not working

Whether it be personal or professional, we all know the feeling of clinging on to something that we just need to let go of. Often though, it feels like so much time or money has been spent on said investment, that it’s too tough to simply pull the plug. Here, managing director of Q2Q IT, Lorna Stellakis, explores why it’s important to make a clean break.

While Coronavirus has left many business owners reassessing investments across their entire firm, the team at Q2Q HQ – from our own virtual workspaces – has been discussing the ‘sunk cost fallacy’ recently.

And specifically in relation to how much time we spend when it comes to fixing a piece of hardware – and whether it’s truly worth the hassle.

Generally, there is a misconception that you make rational decisions based on the future value of objects, assets, and experiences. However, the truth is that your choices can be tainted by emotional outlays you accumulate over time – and the more you invest in something, the harder it becomes to abandon it.

Humans are subconsciously programmed to avoid failures of any kind, and the prospect of loss can be a more powerful motivator on your behaviour than the promise of gains. In fact, several studies claim that the possible pay-off needs to be double the potential loss for many people to make a change.

As an example, have you ever been to the cinema and realised, 15 minutes into a film, that you’re just not going to enjoy it, yet you stay to the end because you’ve paid for the tickets? Or, you’ve bought a sandwich that tasted pretty bland but have still eaten the whole thing because you were hungry and didn’t want to waste the money or food?

While minor, these are great examples of the ‘sunk cost fallacy’ – almost like payments or investments that can never be recovered or enjoyed. A computer program with logical process would never ‘make a decision’ based on what’s already been invested, but as an emotional human we usually do.

Perhaps a more relatable – but less talked about – example is of a long-term relationship, whether that be a business one or a personal one. If we focus on the corporate relationship, it may be a service provider you’ve had a contract with for a while. You’ve spent months, or even years, devoting time and money to the partnership – but, it’s not quite living up to expectations.

Things might be okay – but is this really, well, okay? It might have all started well, but you’re having some concerns and the third-party doesn’t seem as invested in the alliance as much as you are, or even worse, the service has deteriorated yet you’re not privy to any explanation why.

At the same time, the thought of moving to a new provider might not really seem like an option. You’ve invested into the partnership, understand how each other works, and they know your business well. All this can make the fears associated with the potential upheaval of moving to a new supplier simply too ‘unknown’ to contemplate changing.

However, if we look at it from a different angle; time has passed, the money and energy has been spent and you’ll never get any of it back. If you can accept this, you’ll be able to make peace with what’s gone before and move on to something that will serve you better in the future.

This attitude and awareness will inevitably help you to make better decisions moving forward, and it’s something we embrace at Q2Q – both internally across our own practices, and when advising customers on the right hardware too.

The ‘sunk cost fallacy’ manifests itself in many ways amongst our customers – old and new – but we regularly receive feedback that they wished they had changed IT support provider months, or even years ago.

If you feel like you’re harbouring a love for some outdated IT infrastructure, and want to explore what the grass might look like on the other side of the hill, find out more about Q2Q IT, here:

About the author

Lorna Stellakis, MD of Q2Q ITMy role is to provide the overall direction and “eye on the compass” as to where we, as a team are heading, setting the overall business strategy and financial budgeting. Whilst always having been involved with systems implementation throughout my career, I have an operational background and no specific IT experience. However, if anything, I believe this makes me more qualified to ensure the team deliver great service, drawing from my operations experience, and having been on the wrong side of poor IT support in the past. I can relate to how crippling this can be to a business, making it paramount that we ensure that IT issues are as invisible as possible, leaving the customers to get on with running their businesses smoothly.

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