Choice Costs: Every decision has a cost. Giving up is also a choice, and therefore, it carries a cost as well. The purpose of spending money is to gain the efficiency or benefit of a chosen option. Organizations can be at risk if leaders fail to correlate costs and benefits when making decisions or relinquishing opportunities. For example, if a CEO decides to hire an employee, there is a cost associated with wages, and if the employee cannot perform their role corresponding to the wage, the organization suffers a loss. Ultimately, if the CEO fires that employee, the organization must find a replacement, incurring additional costs in the process. A CEO who spends excessively on emotional indulgences is a harmful leader. - Joseph’s “just my thoughts”
In September 1999, NASA’s unmanned Mars climate probe “MCO” exploded in Mars’ orbit. Manufacturer Lockheed Martin set up the data unit as a “yard,” but NASA mistook it as a “meter.” The MCO entered the atmosphere of Mars 100 km below the original orbit and exploded in friction. Communication error had blown away $ 125 million. With this opportunity, NASA decided that the units used in space development were “meters”. A slip of the tongue in business doesn’t end just a mistake accidentally. It must undoubtedly damage the “cash flow”. - Joseph’s “just my thoughts”