Speaking to a colleague recently, it dawned on me- just as investors or traders have to learn to handle losses, business or marketing professionals need to learn to handle rejection, say in sales offer, or in a negotiation process.
In the financial markets we have to learn to deal with uncertainties, how to manage risk and this necessarily involves handling and managing losses.
In general business, a rejection by a proposed customer, or a negotiation not quite going to plan, is the same thing- an event not quite going the way we anticipated. We have not ‘won’.
Loss or rejection are consequences of working in an uncertain space. Today, there seems to more, not less uncertainty. This might be due to global markets, or technology connecting us, and giving to us more ‘knowledge’ or in many cases, just more noise.
This means we need to manage our personal expectations in the results we are seeking. If we anticipate always winning then this sets us up for many hard landings. However, if we learn to expect some loss or rejection, then this can more easily help us deal with these issues at the psychological level. Expecting some loss flows nicely from probability thinking.
I believe the key is in learning to think in terms of probability. Hardened investors and traders learn to shift their thinking framework from ‘right and wrong’ to probable or improbable. We learn to never predict anything, particularly modern markets. When we look for evidence and apply this to our tested methodology or strategy, then we learn to accept losses as part of the business we are in. Probability thinking allows us to adjust expectations, and so, we can accept losses more easily.
In fact, some highly experienced investors or traders learn to ‘love the loss’. They know losses are just things we need to move through to get to large winners, or to the core of the underlying dynamic of a market. Our methodology and our experience helps us to manage our psychology. We better manage fear and ego, which are often at the heart of our inability to handle losses. When we see losses in this more enlightened way, as stepping stones if you will, then things become much easier.
These lessons also apply to general business. Let’s say you are a property professional looking to sell property to a shortlist of ‘warm’ leads. You have been working hard, one or two leads seem to want to make an offer, but then suddenly they become cold. You follow up, but they have moved on.
This rejection is hard to take for even the most experienced professional. However, like the seasoned investor or trader, they also learn to see it as a ‘numbers game’. This means a shift towards probability thinking. We can do all things possible to try to move a lead towards taking the next step, but we realise this uncertainty may be due to many complex factors beyond our control. For example, there may be a financial issue making an offer on a property just out of reach, so the lead has pulled out of the market, at least for the time being.
Personally, I do not like the phrase ‘it’s a numbers game’. This is a bit too reductive of the important relationships we need to form with people in business. Yet we ‘test and measure’ the numbers to move forward and apply probability. The numbers help us psychologically handle the rejection. The same is true of the investor or trader- the numbers help us handle the loss.
While stocks and financial markets are much more removed from the personal relationships in general business, it is worth remembering- all markets are made up of people. Machines might be our interface, but people are behind the machines.
This brings us to a very important principle- trust and relationships are at the core of all good business.
Good sales people, business managers will know this from experience. In the markets it is the same. Remember when we invest in stocks, we invest in a company. A company is made up of good people committed to solving a particular problem to add value, and help other people- to serve consumers or perhaps the broader community. When we analyse stocks, we study in detail the management practices of the executive team to ensure they are both profit and people focused in this way.
Losses and rejection come from complexity and uncertainty. Managing our psychological responses, and learning to handle things a little better are made easier by two universal principles. First, uncertainty is best managed using probability thinking, not ‘right and wrong’ thinking, and not taking things personally. Second, all good business has at its core trust and relationships. When we focus on creating trust and building relationships, we learn to let go. Letting go loosens the grip just a little. This gives us flow, and make the journey easier; at the same time we maximise the probability of long term success.
“Change before you have to.” – Jack Welch.
Lee Spano, Founder & CEO
Creatness International, www.creatness.com
© Copyright Lee Spano. All rights reserved.