Saturday, October 28, 2023

The bane of big projects

In the beginning, "people" are told: "It's too soon to know where we are in this project"

After the beginning, "people" are told: "It's too late to stop the project; there's too much sunk; we have to keep going"

Sampling the data
And so the bane of big projects comes down to poor sampling technique: 
Either the early details are not predictive because the early "efficiencies" of cost per unit of value earned have too little history to be useful as a long-term predictor; or you've accepted the first idea for too long, thereby failing to update efficiency predictions until the late details are too late to pull the plug on a bad bet.

Sunk cost decisions:
It's easy to write this, and far less easy to execute, but never make a decision about the future based on the sunk cost of the past. You can't do anything about recovering the actual expenditure, but you do have free will -- politics aside -- regarding more spending or not. 

History has value
On the other had, sunk cost has a history, and if you are good at what you do, you will use that history to inform your decisions about the opportunity of the future

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