It’s easy to fall in love with your cards or bad business ideas. Don’t do it.
Falling in love with your cards is a common mistake among poker players, especially beginners. They get excited by any two cards of the same suit, and even though something like a king of hearts and a 4 of hearts look nice together, statistically that’s a poor hand. Or, they’re so thrilled with their pair of kings – the second best starting hand you can have in poker – they ignore the fact that the odds are now against them if an ace is dealt on the flop.
When your good-looking cards, deals or businesses no longer seem viable you have to revise your strategy. Don’t get so emotionally attached that you ignore all the signs telling you that you don’t have the winning hand. This is even more critical now, as so many of us need to pivot our lives and businesses.
Know when to cut your losses
People fall in love with their metaphorical cards in business and in life. They hold onto a stock they thought was a sure winner after it’s clear their choice is to sell now for a small loss or later for a big one. They put in a high bid on the “perfect” house, and then, when research shows it’s overpriced and the schools are less than promised, they have trouble letting go. They stay in a job year after year as those around them get promoted and management keeps dangling a promotion with a growing list of demands they never deliver.
Too many players stay in a hand for too long. They stay in because they’re stubborn, their ego is on the line, or they’ve invested time and emotion.They stay in because they’re gamblers and they refuse to get out just to show how tough they are. But recognizing when you’re beaten and need to move on is a critical life skill.
Know the price you’re willing to pay
If you’re in the middle of a business or job negotiation, or you’re trying to put together a deal, determine your “walk-away” point before you spend an extraordinary amount of time, resources, emotion and capital getting it done. Don’t wait until the negotiation implodes to decide. If the other side is being so unreasonable that you can’t agree, weigh the cost you’ve placed on the deal. If you feel there’s not much hope for a decision that benefits both parties, move on.
Be passionate but practical
Falling in love in business and life is a good thing. It’s great to live life with passion and conviction. But we should also be able to recognize when our enthusiasm is keeping us blinded to a bad situation. In other words, fall in love . . . but be smart. The longer you stay in something that you know has poor odds of success the harder it is to fold and get out. Don’t wait until you are short stacked and in a desperate situation.