Business
I like to keep some mental models in my back pocket for quick but high-impact returns in various situations, especially if there's a lot of ambiguity. Sometimes, they can come in clutch to give a fresh perspective on things without needing much mental heavy lifting. Today's entry: a concept I'm calling Economic vs. Accounting Deltas, borrowed from a distinction in corporate finance — and adapted here because it matters well beyond the world of spreadsheets.
Let's say your team just wrapped up a project that didn't land. Maybe a training initiative fell flat, or a redesign effort missed the mark. Time for a retrospective. Someone pulls up the project timeline. The team reviews the deliverables, notes what went wrong, and catalogs the damage: three months of effort, some wasted budget, a product that didn't move the needle. That's the loss. It stings, but it's contained. Everyone agrees on what happened, documents some lessons learned, and moves on.
Here's the thing, though. That postmortem only captured half the story — and arguably the less important half.
What nobody talked about was the other project. The one that could have been greenlit instead. The initiative that was deprioritized, or tabled, or never seriously entertained because the team's time, budget, and creative energy were already committed elsewhere. That unchosen path had its own potential value. And when you chose the path that failed, you didn't just absorb the cost of failure — you also forfeited the gains of the alternative. The real damage isn't just where you ended up. It's the distance between where you ended up and where you could have been.
ENTER ECONOMIC VS. ACCOUNTING DELTAS
In finance, there's a well-established distinction between two ways of measuring profit. Accounting Profit is revenue minus explicit costs — it answers the question, "Did we lose money on this?" Economic Profit subtracts one more thing: the implicit cost of what you gave up by choosing this path over the next best alternative. It answers a harder question: "Relative to what we could have done, how did we actually do?"
In other words, accountants measure the delta between where you started and where you ended up. Economists measure the delta between where you ended up and where you could have ended up. Same word — delta — but they're measuring fundamentally different gaps. And the economic delta is almost always larger, because it includes the foregone value of the path not taken.
You can see how this applies to more than money. In any resource-constrained environment — and corporate training is nothing if not resource-constrained — every commitment to one initiative is a withdrawal from another. And when we evaluate our decisions after the fact, we almost always default to accounting-delta logic. We ask, "What did this cost us?" when the sharper question is, "What's the full distance between the outcome we got and the outcome we passed up?"
Here's a concrete example from the world of instructional design.
Let's say your L&D team has the bandwidth to take on one major project this quarter. Two proposals are on the table:
Option A is a compliance training overhaul. The current program is outdated, completions are lagging, and leadership is vocal about it. It's a clear pain point with visible organizational pressure behind it.
Option B is a new onboarding experience for a rapidly growing department. New hires are ramping slowly, managers are frustrated, and early attrition is creeping up. The data suggests a real performance gap, but it hasn't escalated to leadership visibility yet.
The team picks Option A. It's the squeaky wheel. Three months later, the compliance overhaul ships. Completion rates go up — technically a win — but post-training assessments reveal that learners aren't retaining or applying much of anything differently. The design solved for throughput, not for behavior change.1 The team files it under "shipped, modest impact" and moves on.
Now here's where economic delta thinking reframes the entire picture.
While the team spent the quarter on a compliance refresh that moved a completion metric, Option B — the onboarding redesign — sat on the shelf. During that same quarter, the growing department hired 40 new people who all onboarded through the old, broken process. Some of them churned. The ones who stayed took longer to reach productivity. Managers burned hours on ad hoc coaching that a well-designed onboarding experience would have systematized.
The accounting delta view of Option A says: "We spent a quarter and got a marginal result. Not great, not catastrophic."
The economic delta view says: "We got a marginal result and we lost a quarter's worth of impact we could have had on new hire ramp time, early attrition, and manager capacity. The real deficit isn't the underwhelming compliance project — it's the spread between that outcome and the onboarding project's probable outcome."
That spread is the thing teams almost never quantify — and it's almost always larger than the direct loss alone.
WHY THIS MATTERS FOR HOW WE EVALUATE TRAINING DECISIONS
There are two things happening with economic delta thinking that don't happen with standard postmortem logic.
First, it forces you to evaluate decisions relative to alternatives, not just in isolation. When you only ask "Did this project succeed or fail?" you're grading on a single axis. But decisions don't exist in a vacuum. Every project your team takes on exists in the context of what they didn't take on. And a project that "sort of worked" looks very different when you put it next to an alternative that probably would have worked a lot better. The uncomfortable truth is that a mediocre success can be a strategic failure if the opportunity cost was high enough.
Second, it reframes when the most consequential moment of a project actually is. We tend to place the highest-stakes moment at delivery — did the training land or not? But economic delta thinking suggests the highest-stakes moment is actually at the point of commitment. That's the fork in the road where the spread between outcomes is determined. By the time you're in a retrospective asking what went wrong with execution, the more expensive decision already happened months ago, when the team chose which problem to solve in the first place.
This has a practical implication for instructional designers and L&D leaders: your prioritization framework matters more than your design process. A brilliantly designed solution to a low-leverage problem is still a strategic loss if it displaced a reasonably designed solution to a high-leverage one.2
THE CAVEAT WORTH NAMING
Now, an obvious but important limitation. Economic delta thinking is only as honest as the counterfactual you're comparing against. When we look back at a decision that didn't work out, it's tempting to retroactively treat the unchosen alternative as a guaranteed home run. But at the moment the decision was made, Option B also carried risks, unknowns, and execution challenges. Maybe the onboarding redesign would have been derailed by a difficult SME. Maybe the department's growth would have stalled, making the whole thing moot.
The takeaway isn't "always pick the other thing." It's that you should be honest about the full spread between outcomes when you evaluate past decisions, while also being honest that the unchosen path wasn't a certainty. The framework doesn't give you a crystal ball — it gives you a wider lens.
And in practice, simply asking "What did we not do, and what was that worth?" during a prioritization discussion is often enough to surface the right tension. You don't need to model it precisely. You just need to stop pretending the unchosen option had zero value the moment you chose something else.