Welcome to the theoretical deal table.
What
Are we
Doing here?
In theory, we each have something to trade, something that the other may value more than what we already possess. Ideally, by trading, we are both better off.
Deals get made all the time. And for some frustrating reason, we are conditioned to believe that the other party wants us to lose as much as we want to win. This stance naturally makes us defensive and obsessed with what we’re giving and receiving. Above all, we cannot lose.
Not losing is one of the most baffling issues with human rationality. With rare exception, you are at the table of your own free will. And oftentimes, if the parties work together, the outcomes can be improved for everyone — sometimes by orders of magnitude. But we are so afraid of the other party not cooperating, we restrict our collective interests to preserve our self interest.
“We are so afraid of the other party not cooperating, we restrict our collective interests to preserve our self interest.”
It’s not your fault; you biologically hate to lose, as do I. Loss aversion theory says we feel the pain of a loss twice as much as we enjoy the pleasure of a win. In some survival sense, this natural position is helpful in, say, staying alive. It means we don’t take unnecessary risks. But it also clouds our ability to reach for better available outcomes.
So why are we here? We’re here to build better deals.
A better deal is measurable; it has a positive sum. If you’ve ever heard the phrase “zero sum,” you know where this is headed. Someone can lose (negative input) and someone can win (positive input), resulting in a net outcome of zero. What an unimpressive result! Surely we are capable of better.
But capability and commitment are different things. To actually improve the results requires more work, individually and collectively. What is that work? And, are we willing to do it?
I know what you’re thinking: trust is the obvious missing piece. Trust undoubtedly matters. A better deal won’t be achieved without it. But trust is hard, especially with strangers.
I’m not going to tell you to blindly trust strangers. Trust, especially in professional settings and with high stakes, is earned. Time, communication, and a demonstrative record of words reconciling with action are required. The only way I know for people to earn real, lasting trust with one another is to spend time together.
So trust isn’t really the answer, not fully. Everyone can be good — ethical and moral, communicative and reasonable — and you can still end up with a zero sum outcome. (Disappointing, I agree.)
“Most deals fail to achieve a positive sum because we screw ourselves…We don’t understand ourselves as active players. We don’t spend enough time studying the rules. Identifying our unconscious behaviors and beliefs. Brainstorming all the potential upsides. Or assembling options and tools that can help improve the outcome. ”
In most cases, I’ve found the “other party” to be a secondary issue. Most deals fail to achieve a positive sum because we screw ourselves. Sometimes before we even sit down at the table. But why?
We don’t understand ourselves as active players. We don’t spend enough time studying the rules. Identifying our unconscious behaviors and beliefs. Brainstorming all the potential upsides. Or assembling options and tools that can help improve the outcome.
We sabotage our own outcome, along with everyone else’s.
So this is an exploration of the topics that cause us to settle for less-good deals for ourselves, and how we can reframe them to improve everyone’s outcomes.