Poker always reminds me of the sunk cost fallacy.
It’s hard to fold your cards after making a big bet. You don’t want to lose what you’ve already committed, yet holding on too long could cost you even more. The same is true in leadership—those pivotal decisions where it’s tempting to keep pushing, even when logic tells you to pivot.
A sunk cost is just that—a cost that’s already been spent and shouldn’t dictate your next steps. Great leaders understand this and stay alert to the risks of the sunk cost fallacy.
Take Steve Jobs, for example. When he returned to Apple, the company was on the brink of collapse. He doubled down on a bold vision and poured resources into reimagining the iMac, a bet that saved Apple from bankruptcy. From there, the iPod revolutionised the way we listened to music, bringing “1,000 songs in your pocket” and catapulting the company into a new era of success.
Apple was unstoppable.
Their next big project? A tablet. They invested heavily in what we now know as the iPad. But then came an unexpected opportunity: AT&T approached Steve Jobs with a partnership to launch a mobile phone.
Jobs faced a tough choice.
The tablet project was well underway, with significant time, energy, and resources already invested. Many leaders might have hesitated, thinking, “we’ve come this far; we can’t stop now.” But Jobs had the clarity to see the bigger picture. He made the bold move to deprioritise the iPad and pivot Apple’s focus to the iPhone.
The rest, as they say, is history.
Imagine pausing a major project, midstream, to gamble on a new direction. It’s not easy—but knowing when to pivot can make all the difference. The iPhone redefined Apple’s future and reshaped the tech industry entirely.
As leaders, how often do we hold on to decisions simply because of what we’ve already invested? Recognising the sunk cost fallacy gives us the freedom to adapt, pivot, and make strategic choices for the long-term benefit.
What decisions might you need to revisit this week?Prepare to move,
Trevor
