The cost of doing nothing.
I've never known what this universal symbol is supposed to mean, but I call it 'What was I thinking?!'
I'm two weeks into Cristina Roman's amazing Half-Finished to Done LIVE coaching program (coaches have coaches too!) and the insights already have been game-changing. One concept that she's incorporated into the work we're doing (from economics) is the idea of Opportunity Cost. Here's a nice definition from Your Dictionary:
“Opportunity cost is the value of something when a particular course of action is chosen. Simply put, the opportunity cost is what you must forgo in order to get something. The benefit or value that was given up can refer to decisions in your personal life, in a company, in the economy, in the environment, or on a governmental level.”
And some of my favourite examples from their list:
At the ice cream parlor, you have to choose between rocky road and strawberry. When you choose rocky road, the opportunity cost is the enjoyment of the strawberry.
Mr. Brown makes $400 an hour as an attorney and is considering paying someone $1000 to paint his house. If he decides to do it himself, it will take four hours. His opportunity cost for doing it himself is the lost wages for four hours, or $1600.
For a farmer choosing to plant corn, the opportunity cost would be any other crop he may have planted, like wheat or sorghum.
You decide to spend $80 on some great shoes and do not pay your electric bill. The opportunity cost is having the electricity turned off, having to pay an activation fee and late charges. You might also have food in the fridge that gets ruined and that would add to the total cost.
In all of the examples above, there is an active choice being made. This helps us understand the concept more clearly, but I want to focus on something slightly different. The choice to do nothing.
We don't often see inaction as a choice because it requires very little of us. That is, nothing needs to change. You re-up your choice every moment you continue the path you're effortlessly on.
But what is the cost of that? What are we missing by not stopping to add it up?
The opportunity cost of doing nothing is what you lose by carrying on as is versus doing thing that requires effort and change. It's the event you didn't attend. The connection unmade. The project that only gets dreamed about. It's FOMO-fuel, for sure. But sometimes that fear of missing out has real basis. You can fear missing out and also actually be missing out on something. That loss is the opportunity cost.
We notice it acutely when we feel regret for staying our course and not taking explicit action. I should have been there. I didn't speak up. The sale is over.
We may notice it less when we don't stop to question how we're spending our time in other ways. Such as when we're lulled by the cosy feelings of being settled into comfortable routines or thinking patterns. It's here where we might be our own disruptive innovator and stop to ask ourselves challenging questions, such as:
What am I so comfortable with that I've stopped questioning why I'm doing it? Could my time be better spent?
Do I have any habitual thinking patterns that aren't serving me well? What could I be thinking like instead?
Where have I checked out, automated things or are otherwise not applying conscious thought to a task and why? What could I achieve if I re-engaged, did it manually, or perhaps more slowly and mindfully?
The answers to these questions may result in staying on the path you're already on. That's great. This process makes the choice to do so a conscious one. And so long as you are aware of the opportunity cost of that choice AND you like your reasons for the choice you've made, you're golden.
In the example above with Mr. Brown losing MORE money by painting the fence himself (because of the four hours' lost wages during the time he's painting), the opportunity cost might be well worth it to him. His reasons might be that he feels pride in having done it himself. Perhaps he enjoys being outside and wants to make an afternoon of it. Maybe he has helpers who can transform the project into a cherished memory. These could all be great reasons. What's important though is, does Mr. Brown like his reasons? Is he even aware of them?
How much more satisfaction could we gain from all our activities if we approached them with awareness of our choices and reasons for them?
