Damn you sunk my battleship (aka the theory of sunk costs)
#AgileData
I like old classic cars, and so I tend to buy them and use them as my daily driver (ok I work from home so my weekly chore-about then)
I get enjoyment and therefore perceive value from driving these types of vehicles, but the consequence of owning one of these is the ongoing maintenance cost.
I try to kid myself with the line, “well I may pay more in maintenance than a new modern car, but that is offset by the lack of depreciation when I come to sell it”. But I have never calculated the metric to prove that this is true (or not true which is more likely).
I took the car into the garage recently and the bill for maintaining and replacing a few things ended up being 25% of what I originally paid for the car and probably more like 40% of its current market value if I tried to sell it.
So one of the first things I do to justify this is revert to the theory of sunk costs.
I think about the difference in what I paid for it, what I would get for it today and decide I don’t want to “lose” that money. I don’t calculate what it will cost me over the next 5 years and if I will save money by replacing it with a modern version.
I often see the same behaviour from Data Managers.
There thought process goes something along the lines of:
“We have invested hundreds of thousands of dollars (if not millions) into building out this data platform.”
“If I replace it with something new, I will lose that sunk cost”
The thought process doesn’t go:
“If I replace it with something more efficient will I save more than that over the next three years”.
I get there is a whole bunch of other criteria that influences the decision to make a change.
Is there funding available?
Is the change risky?
What happens if the change doesn’t work?
How do I message in a way to ensure the original spend is not seen as waste?
How we will transition our Information Consumers with minimal impact to them?
There are ways to manage all those issues.
But typically those conversations never happen, because of the theory of sunk costs.
So next time you need to make a decision, ignore the theory of sunk costs and move on to those other issues, those are the issues you really need to talk about and decide how you might mitigate them.
I have some ideas on how you can use Agile Data Patterns to mitigate most of them, let me know if you want me to write them up and publish them.
I love the saying, “if your not having fun your doing it wrong or you are doing the wrong thing”.
So with that in mind, drive what you love, and enjoy every minute that you do it.
But just be clear and honest about why you are doing it.
