Chapter 4 · Explain this like I'm a manager

Escalation of Commitment

30-second explanation

Escalation of commitment is continuing to invest in a failing course of action to justify past decisions. The money, time, or reputation already spent (sunk costs) should not decide what you do next, but it often does.

Example

A company keeps funding a software rollout two years late and triple the budget because 'we've already spent $4 million.'

What a manager should ask

If I were starting fresh today, would I choose this?

Common mistake

Treating quitting as failure. Stopping a bad project early is a management win.

Use it at work

Name one thing you keep doing mainly because you have already put a lot into it. Apply the fresh-start question.

Test yourself

Why do new leaders often cancel projects their predecessors defended for years?

Show the answer

They are not tied to the earlier decision, so the sunk cost does not weigh on them.

Problems where this shows up

How should I make this decision?

Go deeper with AI. Paste this concept into the Concept Explainer prompt and ask for an example from your own industry. Use AI to check your understanding, not to replace it.

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