Glossary

Opportunity Cost

Opportunity Cost

Robert Frost’s famous poem, “The Road Not Taken,” ends with the lines: “I took the one less traveled by, and that has made all of the difference.”

Opportunity cost results from finding the option for two roads when winding down the business trail. Very literally, it is all of the potential gains that were lost and squandered by taking one course of action vs. another.

No matter the path you take, there will always be this cost. The goal is to minimize this cost and yield a greater gain in the end.

One predominant conversation this topic applies to is an investment. By investing in one company, you often choose to avoid investing in another. The opportunity cost becomes the gain of the two companies and, seeing how wealthy you become.

There will always be a fork in the road, a decision to be made, and a choice to be had, but I present you with a third choice. When you come to a fork in the road, take it.

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