bcg blog

Opportunity Cost

I entered college undecided on what I wanted to major in. My family has always been in education - my dad, a lifelong high school science teacher, and my mom, a school bus driver. It’s the world I grew up in so I knew the ins and outs of what each aspect of the school year brought. I was well aware of the things that lifestyle afforded us - summers free, holidays off, and access to facilities. I was also well aware of what that lifestyle did not afford us - money to do anything on those free summers and holidays.

What I was fairly blind to was the things a non-teaching lifestyle affords.

As I began considering the options for my future, the list quickly narrowed to two professions, both of which I could see myself doing, and enjoying, for the rest of my life: teaching and medicine. Not much difference there, right?!

As a doctor, I loved the idea of helping people in their most vulnerable moments. I loved the idea of studying and becoming an expert on something that was difficult to understand. I loved the idea of providing a caring, personal touch to service that had been absent in many of my experiences. Many of those ideas which I appreciated paralleled with teaching. I knew what a life as a teacher would feel like. I had no idea about life as a doctor.

First of all, I wasn’t in love with the years and years of schooling required to become a doctor. Not that I’m opposed to school, but much of that time would likely be spent void of patient interaction. I didn’t like the time I would need to spend away from my family in order to gain a position that afforded me the option to be with them. Eventually that balance would swing, but the sacrifice to get to that point was significant. And, I didn’t like the debt I would undoubtedly be in following all the necessary schooling. 

The problem, of course, is that I couldn’t have the things I loved without the things I didn’t like.

Why Should We Care?
Let’s think about an example everyone seems to struggle with: youth sports. When you attend a game you have three options: you can be a fan and cheer, you can be a coach and coach, or you can be an official and referee. You have to pick one.

By choosing one, you are, by default, not choosing the other two. You can’t be a fan and referee. You can’t coach and be a fan. You can’t be a referee and coach. It doesn’t work. And, yes, I realize this fact escapes most.

This is a simple reality in leadership as well.
Every choice we make has a corresponding cost that we are choosing as well. The opportunity cost however is not just the immediate sacrifice. It includes the myriad of opportunities that making a different choice encompasses. Of course it’s impossible to anticipate every potential possibility, but it’s negligent to not explore it.

Excellent leaders understand both what they are gaining, as well as giving up, with each choice.

REAL TALK - Action Steps
It’s easy to see the opportunity costs after the fact, but excellent leaders anticipate and plan for it. Here are a few areas to consider and standards to have in place in order to be best prepared for the pending opportunity cost.

• On-boarding 
  
  • Of course the immediate impact is important but so is the long-term benefit or harm. The immediate need may be urgent but we can never compromise the future for the now. The opportunity cost in adding needed pieces to your team is one to be treasured.
    
• Off-boarding
  
  • Most leaders are too quick to hire and too slow to fire. That’s not to say we should bail on team members the moment they underperform, but to drag them along when they begin hurting the team is an opportunity cost we will almost always regret.
    

• Know Who You Are
  
  • If we are not self-aware it’s impossible to calculate opportunity cost because we don’t know what matters most to us. Clarity in purpose and action are paramount in understanding the opportunity cost in each decision. 
    
• Know Where You Are Going
  
  • The vision for our team should create a clear picture of not only where we are going, but what we need to be able to do to get there. Knowing the destination, however, does little to mitigate opportunity cost, but understanding the process to get to there allows us to dictate the opportunity cost.
    

Opportunity cost is something we must deal with as a leader. It’s more than the immediate loss of potential gain. Navigating it with intentionality is a symbol of clarity, self-awareness, and excellence.

Checkout Surrender the Outcome on Amazon and order The Score That Matters with Ryan Hawk & Brook Cupps. The latest blog from Blue Collar Grit can be found here!