The opportunity cost of decision-making
Every decision comes with a cost. Choice A brings us X, but what are we giving up by not choosing Choice B? Sometimes not that much, and Choice A is the best choice, but that’s not always the case.
In economics, the opportunity cost refers to the benefits we lose by not choosing the alternative option when making decisions. For example, every time we spend a dollar on something, we pay an opportunity cost. With that decision, we lose the ability to have that dollar work for us long-term. Instead, had we had invested it, in 10, 20 or 30 years from now, what would it be worth? That’s the opportunity cost.
Every decision we make has an attached opportunity cost. Choice A brings us X today, but what are we giving up by not choosing Choice B? Sometimes not that much, and Choice A is the best choice, but that’s not always the case.
What about the status quo? We’re all familiar with the term. “Hey, why are we doing it that way? Because that’s the way, it’s always been done.” We see that in our organizations as they start to grow and their ability to change slows. The decision to stick to the status quo is costly; it comes with its own opportunity cost. Sometimes small, but often significant. When we don’t speak up and push back, the status quo wins; everyone pays the price.
We also see it in ourselves. When we look into the mirror, we notice our current ways of being. When we’re brave enough to reflect on them, we might see some of these ways have become our status quo. We cling to them because they are familiar, easy and often because we don’t have the courage or focus to change them.
These decisions are our personal status quo, and they also come with a huge opportunity cost. We bring ourselves and our ways into our personal, work and business lives. Some of these hold us back and cost us considerably. If we don’t decide to challenge them, we pay the price.
Brené Brown, in her book Dare to Lead, has a great quote; don’t let it happen to you.
What stands in the way becomes the way – Brené Brown
It might be time to re-evaluate and decide if we’re willing to continue to pay the opportunity cost of sticking to our old ways. What are they costing you?
Sparknotion – Think Differently.