Power ( Part 5 ) - The Power of Risk Taking
Dear Readers Let's Talk about "The Power of Risk Taking", Another important ingredient of Power.
You must be willing to take Risks while Negotiating. Risk taking involves mixing courage with common sense. If you don't take calculated chances, the other side will manipulate you. As Flip Wilson said, "Before you can hit the jackpot, you have to put a coin in the machine."
I looked at him and said, "So?"
He continued, "So ... the seller wants $150,000 and I'm only prepared to pay $130,000. How can I get this house for $130,000, though the seller wants $20,000 more? Give me some negotiating Tactics."
I asked, "What would happen if you didn't get this Dream House?"
He replied, "Are you kidding? I think my Wife would kill herself! I think my kids would leave home!"
I then Murmured, "H-m-m-m. Tell me ... how do you feel about your wife and kids?"
His answer was, "Come on, Herb ... I Love them very much! I'll do anything for them! We just have to bring the asking price down."
Take a guess, Did Smith pay $130,000 for the Dream House or didn't pay $160,000. That house means so much to him that he was unwilling to risk losing it. Because he cared too much (Moral: Care, but never that much), he couldn't afford any uncertainty ( "Maybe there's another house I could get interested in ..."), uncertainly that might have caused the seller to adjust the Asking Price downward.
He held on to the electric Live Wire, so to speak, and couldn't let go, because he had nothing else to Grab.
The Result was that he paid through the nose. Remember: When you feel you have to have something, you always pay Top Dollar. You put yourself in a position where the other party can manipulate you with ease.
Intelligent Risk taking involves a knowledge of the "Odds", plus a philosophical willingness to shrug your shoulders and absorb a manageable loss without whining ("That's the way the ball bounces"). Obviously, the chance of a setback is the price you must pay for any progress.
When I say you should be willing to take risks, I'm not advocating that you do anything as idiotic as risking your savings account on the spin of a Las Vegas Roulette wheel.
I'm not proposing that you take far-out chances that might tempt you to slash your wrists if the wheel of fortune stops at the wrong number. I am suggesting that you take moderate or incremental risks: Risks you can afford without being uptight about adverse consequences.
Let me give you an example about calculating the odds, followed by a suggestion on how you can make your risks more Manageable. At a particular point in one of my negotiating seminars, I stand before the group with an ordinary quarter in my hand and say, "I'm about to do the traditional coin flip. I'll flip this 25 cent piece just once. If you call heads or tails correctly, I'll give you a million dollars. If you call heads or tails incorrectly you have to give me a $100,000. Assuming that this is a legitimate bet and that I'm not kidding around ... how many of you in this room would take this bet?"
Normally, no one raises a hand. I flip the coin, glance at it, and slide it back into my pocket. Then I comment, "Let me try to analyze what went through your minds when I made this proposition. You said to yourselves, 'This guy is giving me 10 to 1 odds on a 50 - 50 bet. He may know a lot about negotiation, but statistically, he isn't very bright!"
Most of the audience nods in agreement. I keep talking: "Were you thinking of winning? Were you trying to figure out what you'd do with a million dollars? Perhaps work out a Tax Shelter, then head for Tahiti? No. You were thinking of losing. You were thinking, 'How can I possibly scrounge up a $100,000? Right now I'm a little short until payday!"
Many members of the audience laugh nervously. I continue, "I can imagine some of you walking into your home after the seminar. Your spouse greets you and says, 'Did anything unusual happen?' You reply, 'Well, there was this guy, and he had a quarter, and he did this coin flip. By the way, how liquid are we right now? Is there any cash lying around?'"
The audience is wise in not taking me up on that coin flip. The degree of Risk to anyone, in such a monetary situation, is proportional to what person already has in the way of Assets.
If anyone in the audience were a multimillionaire, he or she might challenge me on the gamble. J.Paul Getty or Howard Hughes wouldn't have given it a second thought. The old saying is still valid: "Money goes to Money."
Possession of wealth enables one to explore favorable opportunities, for the inherent Risk is Moderate. It's no more than bite-size. In case of loss, the wealthy person can shrug and exclaim, "How about that!"
Supposing I quantitively reduced the bet's equation? Supposing I switched from a Million Dollars versus Ten? Would anyone in the audience take me up on the bet? The chances are that almost everyone present would, since the risk is now no more than incremental with respect to their assets.
Keep in Mind that the ratio between the 2 figures is still the same, but the possibility of a crippling loss has been eliminated. Most of us can handle the potential loss of $10 without flinching. Few can absorb the possible loss of a $100,000 dollars without chewing the wallpaper.
Even if I don't reduce the bet's equation, the audience can make the risk manageable if they syndicate it or spread it out. Here's what I mean by that: If each of the 1000 people in the audience drops a $100 in a kitty, and a chosen representative calls the coin flip correctly, one million dollars will be split equally among 1000 individuals.
This moves the equation into an entirely new light, for the 50 - 50 possibility of losing involves only one hundred dollars, which is fairly unpleasant but not disastrous. However- and here's the clincher- the 50 - 50 possibility of winning involves 1000 of a million dollars, or a whopping one thousand dollars.
So when much is at a stake, always consider sharing or syndicating the Risk Involved. When you spread a Risk so that it's on others' shoulders as well as your own, you defuse and diffuse that risk. In disturbing or syndicating risks, you put yourself in the enviable position of being able to cash in on opportunities where the Odds are in your favor.
By getting others involved, you also expand your horizons and increase your "Staying Power". Whether playing poker or investing in the stock market, you're in a stronger power position if your capital is considerably larger than your opponents'.
In encouraging you to take Risks, I want you to take optimum or moderate Risks. I don't want you to gamble or "Shoot craps with Destiny". Before chancing anything, calculate the odds to determine whether the potential benefits are worth the possible cost of failure. Be rational, not impulsive.
Never take a Risk out of Pride, Impatience, or a Desire to get over with.
So, Readers we have Talked in detail about this Topic which Shows Taking Moderate Risk is considerable than Taking High Risks.
In Next Part we will Discuss :
Post a Comment