Creative Traps and Sunk Costs

When to bail, when to stay, and how to deal

There are many times where I have realized projects aren’t going to work out, but have pressed forward after reaching the point of no return. Reaching this point can happen for a bunch of different reasons: too many resources have been invested, contractual obligations, pressure from deadlines, concerns about my reputation, etc.

The tricky thing about points of no return is that they are informed by both subjective and objective reasoning. This often causes us to act in ways that economists might say are irrational. This irrational behavior is typically caused by the fact that humans are loss averse, meaning we prefer avoiding losses to making gains of equivalent value. The key here is understanding what we define as valuable and how we place that value on our gains and losses.

This is where sunk costs come into play. Sunk costs are costs that have already occurred and can’t be recovered. There is no going back. Naturally, we can compare sunk costs with future costs. Future costs, or prospective costs, are the estimated costs of doing business in the future. As per the Wikipedia page for sunk costs, which by the way is a great resource for an amateur like myself, we see that only prospective (future) costs are relevant to an investment decision.

Now, if we combine all of this together we can see where the decision-making process gets complicated. If future costs are the only costs that should matter in an investment decision, but humans are prone to loss aversion, how can we make the right call when faced with a decision? This tension can create a sunk cost fallacy.

Example 1:

A designer is hired to redesign a website for a client. After spending a month or two working with the client and hours working through visual design and complex UX challenges, the client begins to develop the website with their in-house team. In order to hit the deadline, and feeling the pressure of reaching the point of no return, the team implements the designs in ways that don’t respect the restraints of the new design system, resulting in a poor quality interface and bad UX.

Example 2:

A designer is hired to redesign a website for a client. After spending a month or two working with the client and hours working through visual design and complex UX challenges, the client begins to develop the website with their in-house team. In order to hit the deadline, and feeling the pressure of reaching the point of no return, the client decides to revert back to their original website and optimize the content in a way that allows them to hit their quarterly goals. They postpone the original project to a later date.

Both of these situations might feel familiar. If you’ve ever been in the situation described in Example 1 you might know how heartbreaking it feels to see something you designed turn into mush in order to meet a deadline. Example 2 can feel equally heartbreaking, but from a business perspective was probably the right thing to do, assuming the client will actually hit their quarterly goals.

Example 2 is the winner. It avoids the sunk cost fallacy by prioritizing future gains over sunk costs and by releasing attachment to past investments of time and money, provides a result that is more beneficial for the company. From a creative perspective, both suck.

What’s interesting about creative work is that it’s nearly impossible to release 100% of our emotional attachment. The creative community has dedicated websites to killed projects and we create digital shrines for process documentation and failed concepts. This emotional attachment can create creative traps that lock us into sunk cost fallacies that often put us in lose/lose situations.

I’m not sure that I have a conclusion on the matter. I find this happens more often with visual designers and brand designers than with product designers. I don’t think brand designers should adopt product design practices for validating their designs. It might actually be impossible. Illustrators might have it the worst.

So maybe there is no fix. It would be easy to ask everyone to turn off their tendencies toward loss aversion, but the traits that make us loss averse are the same things that make us humans. Turning off the tendency to be emotional about our work might mean turning off the part that makes us good at doing the work in the first place. Maybe creative isn’t a sunk cost? It can always be reused and recycled. Or maybe just being aware of all of this is enough.

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