Part 1 of 4 in the Decision-Making series.
What to Expect
Let’s paint a picture. After a hectic work week, the weekend is finally here. You want to make the best of this little free time and stop thinking about the developer who hasn’t shared the final code, or the leader who still hasn’t approved your email.
You’re eating breakfast, wondering what you’d like to do today. Movie? That long overdue book? A fancy lunch? A coffee and music session? Bowling or cricket with friends? Or just stay home and sleep all day?
The list is always long, isn’t it. And your first goal isn’t really any one of those activities. It’s to make the most of this break. The pressure is real.
We meet this every day in some or the other way. Choosing a restaurant to order from, which shoes to buy, where to invest money for the best returns. Well, my favorite work function is here to save the day again. Project management offers elegant decision-making techniques, not only to lead a project to success but to lead a satisfied personal life too. You can use them to plan a weekend, build a daily routine, even structure your office hours for better output. Some help you take a decision yourself. Some help you hand it to someone with better judgement.
What will this cost you? (skill I)
It’s a fresh Saturday morning. Your best friend has been inviting you to visit this new club in Gurugram for a month, but you keep delaying it for being too far. This weekend they call you again and put you in the middle of a decision.
Only this time, one thing’s different. You’ve read about a technique called Three-Point Estimating. Instead of guessing one number, it asks you to estimate the same thing three times: optimistic, most likely, and pessimistic.
A club is best visited during late evenings. You stay in Delhi and will be taking a cab to Gurugram. Optimistically, with minimal traffic, the ride would take about 60 minutes. Most likely, based on past rides, about 90 minutes. But this being the weekend, it might stretch to 150 minutes in heavy traffic.
Three perspectives, three values. The technique gives you a simple formula to arrive at an expected value:
(Optimistic + 4 x Most Likely + Pessimistic) / 6
Using the values we came up with, that’s 95 minutes as the expected time it will take.
Now, 95 minutes is the middle of the range, which means you’d be late about half the times you make this trip. Not much use when you’re telling someone what time you’ll reach. So, the same three numbers give you a second figure, the spread, and it’s just as easy:
(Pessimistic – Optimistic) / 6
That’s 15 minutes here. Add it once to your estimate and you get 110 minutes, a number you’d actually hit around 85% of the time. Notice you didn’t have to guess at a buffer or pad the answer to feel safe. The three numbers you already gave contain both the estimate and how much to trust it.
So: 1 hour 50 minutes each way. A round trip is 3 hours and 40 minutes. Almost four hours of your Saturday, spent inside a cab.
Until now this was a vague feeling over breakfast that the travel would be long. Now it’s a number, and the number is bigger than the feeling was.
But there’s a second cost hiding in those three values, and it’s the one people miss. Your range runs from 60 minutes to 150. That’s not just a long trip; it’s an unpredictable one. You cannot tell your mother what time you’ll be home. You cannot make any plan for after. Four hours you can schedule around is a completely different thing from four hours you can’t, and that uncertainty costs you separately from the travel itself.
This is what finally makes the decision easy. Your friend has been asking for so long, so the visit isn’t in question. Only the shape of it is. You tell them the plan is on, but for Sunday, where you’ll stay the night at their place and travel to office directly the next morning. Same four hours of travel, except now they buy you a whole evening instead of eating one. And if the night stay isn’t possible, tell your friend it’s their turn to come near your place this weekend. 😉
What are you giving up? (skill II)
Unlike the last one, this technique has no formula. It works entirely in your head, more of a psychological game.
Opportunity cost is the value of what you give up in order to choose one option over others. And the cost here isn’t only financial. It’s what you forfeit in any form, emotionally, physically, or economically.
Back to that Saturday morning and the long list. Say you’re a music lover, and what you want most is a decent coffee house, headphones on, favorite rock playlist running. But that means giving up the only spare hours you had for that long overdue book. And the extra sleep you’ve been missing for two weeks with all the office pressure.
So, what do you do? Every option is a good one, and that is exactly why you’re stuck.
Opportunity cost asks you one question: is this worth more than what I’m giving up for it? Is the coffee and rock music worth choosing over the book you’ve been meaning to read? Worth giving up those extra hours of sleep?
Give it a thought, and the answer arrives. You could sure use that book, but what you really want is a light, relaxing weekend, because office has been too stressful lately. And sleeping through the day would leave you lazy, not letting you get out of bed at all, which isn’t relaxing either. The book can wait a week.
So, the good brew and the rock playlist win, and you’re willing to give up the rest for it. You’ll just make sure to reach home timely and sleep early tonight.
Ah, that feels satisfying. Even an overthinker doesn’t need to give this more thought, because you know why you gave up the other choices. That is exactly what considering the opportunity cost earns you. And note that this is a question you ask before you decide. Once you’ve asked it honestly, you’re allowed to stop asking. A cost you’ve weighed and accepted isn’t a cost you owe anything more to.
Should you go on ahead or move on? (skill III)
Say the first half of your Saturday has passed and you decide to watch the new horror release, followed by dinner at your favorite place. Ticket booked, friend told to meet you after. The plan is satisfying…
Well, I don’t mean to ruin your plans, but it has started to rain heavily and stepping out is now a choice to make. You can still make it, but the roads are waterlogged, the cab fare has surged, and you’ll walk in around the twenty-minute mark. Isn’t it frustrating when this happens!
And here’s the part that makes it hard. You paid 1,000 rupees for that recliner seat. Letting it go feels like throwing money away, so something in your head keeps saying just go, you’ve already paid for it.
That sentence is the trap.
This is what we refer to as Sunk Cost in project management. Sunk cost is the cost, be it emotional, physical, or economic, that you have already paid and cannot reverse now. The 1,000 is spent whether you sit in that recliner or stay home. It is gone in both futures, which means it cannot be a reason to pick either one. This technique asks you to base your decision on what the future holds instead of what has already happened.
So, take the ticket out of the calculation and look at what’s actually left.
Go anyway because you paid? That’s the ticket voting, and it doesn’t get a vote. Go because a horror film missing its first twenty minutes is still worth a wet commute and a surged fare? Maybe it is, just make sure it’s the film you’re going for and not the money. Or drop it, make popcorn, put on something at home, and let the goal of a peaceful weekend continue.
Notice that the ticket price didn’t change which of these is best. It only made one of them feel obligatory.
One caution before we move on, because this idea gets misused as often as it gets ignored. Sunk cost is not a license to quit hard things. Having already invested isn’t a reason to continue, but it isn’t a reason to stop either. The honest question is only ever about what’s ahead: if the remaining path still gets you somewhere you want to be, carrying on isn’t a fallacy, it’s just persistence. Most things worth doing feel worst in the middle, and “sunk cost” is a very comfortable name for giving up on them.
While opportunity cost welcomes optimism in your thinking by asking to broaden your mind and consider alternatives, sunk cost protects that same optimism by asking you to let go of what has already happened and not let it affect what’s to come.
Are there more such useful techniques?
Plenty. This is Part 1 of four, each taking a different question you face in ordinary life. This one was about cost. The next two cover what to do first, and how to choose when the options are close. Part 4 asks the one I think most of us get wrong: whose decision is this, actually?
Until then, a small experiment. Next time you’re about to spend an hour on something, ask what else that hour could buy you. Then decide, and tell me in the comments whether the answer surprised you.