In 1956, manufacturers in France and Britain dreamed of a transatlantic flight that lasted only a few hours. The Supersonic Transport Aircraft Committee met to discuss turning this dream into a reality. The result was the Concorde, a marvel of engineering that catapulted passengers across the skies at speeds faster than sound. The trip that took the Pilgrims six weeks took the Concorde less than three hours to complete.

The Concorde was unquestionably a triumph of engineering, but as a business, the jet was a colossal failure. Designing a supersonic passenger jet was a monumental task, eating up investments through cost overruns. But rather than put an end to a program that was hemorrhaging money, the executives in charge decided to continue. With so much money already invested, they thought, it would be a terrible waste if they didn't see it through.

The Concorde is a classic example of the Sunk Cost Fallacy. It occurs when a person or organization makes a decision based on previously invested resources, regardless of whether or not there is a reasonable chance of future gain.

The Sunk Cost Fallacy can be seen in a variety of settings. Whenever a person stays in an unhappy relationship simply because it has lasted a long time, or a homeowner continues with a home renovation project that ultimately fails to bring added value to a home, or a sports fan attends a public event while sick so that the ticket isn't wasted, the Sunk Cost Fallacy is at play.

To avoid falling into this trap, it is important to weight the cost of each decision against its future value. If you're keeping a car simply because you've already shoveled a pile money into car repair, you might want to consider whether the cost of operating that vehicle is less than the operating cost of a newer model. The cost of previous repairs isn't recoverable, whether you continue driving the vehicle or not.

This doesn't mean that one should equate any setback with sunk cost. Adversity and opposition are present in any endeavor. If the benefits outweigh the cost, it's probably better to move past the setback and continue striving for the goal.

For all the millions of dollars poured into the Concorde program, it lasted less than 30 years. Fuel costs, environmental concerns stemming from the plane's sonic boom, and improvements made in competing jets doomed the Concorde to an early demise. The last nail in the coffin was the July 2000 crash of a Concorde jet into a hotel in France, killing 113 people. In 2003, the Concorde was retired, a marvel of engineering that ultimately failed to turn a profit.

Most businesses don't have to factor in the possibility of a fiery crash, but every business should beware of the Sunk Cost Fallacy. Perseverance is a noble quality, but stubbornly forging ahead without the possibility of gain is a fool's errand. The wiser course is to carefully consider your options based on their future value, rather than what they've already cost.