Cutting Your Losses: How to Avoid the Sunk Cost Trap
Richard Ivey School of Business
Ivey Business Journal
The article presents the author's comments on why leaders have difficulty cutting their losses, and how this mistake can be extremely costly, particularly in a volatile environment. He states that persistence can be a valuable leadership quality, perhaps even more so in a volatile environment. The author discusses strategies including the launch of a pre-emptive conversation, creation of constructive tension, and defining opportunity costs.