Opportunity cost is an important business concept that often affects how leaders make decisions.
When you say yes to anything, you are explicitly or implicitly saying no to something else.
Opportunity cost is what you give up when you choose between options. The key to minimize opportunity cost is by choosing the option that benefits the most.
Opportunity cost brings sharp focus on the decisions you make vs. the next best alternative. People often focus on the proposed action vs doing nothing which most often is not the benchmark one should be comparing against. Secondly, opportunity cost analysis also helps to create business urgency for decision making which is getting increasingly important in a dynamic business environment. When the opportunity cost is high, expediting decision-making is often better than continued information gathering and analysis for perfection. On the other hand, your pursuit of certain objectives should be more persistent if the opportunity cost is low.