Be Unflappable and Know When to Move On

My daughter had a rough go last week when an eye stye turned into a staph infection on half of her face (as if being a teenage girl is not hard enough as it is). It broke my heart seeing her confidence shook when some of the boys in her school made a comment about her that she overheard at the store. I didn't quite know how to explain to her that this was a mere blip and to not let it interfere with her normal approach to school, dance, and other activities, namely with confidence and joy. So I read her the attachment and told her that she can develop a super power. That super power is being unflappable.

In doing so, it reminded me that we, as advisors, are constantly being asked to make recommendations to our clients when they have been "wronged." Whether it's a client having breached a contract, the market having soured an investment, or a deal teetering on being broken when something was discovered in due diligence, decision-makers and advisors alike have a choice to make. They can get upset, sulk and dwell, oftentimes costing more resources than otherwise necessary. Or, they can be unflappable, choosing calmness in what may seem like a crisis, and move on. That moving on entails making a consciously calm and logical decision, as opposed to getting emotional and thereafter throwing good money after bad, as some say.

So how do you know when that moment arises where you should move on. Here are a few best practices I follow personally, recognizing when I'm sitting in the seat of advisor I may handle differently depending upon my client's preferences and risk tolerances:

1. I anticipate that sunk costs are a natural part of seeking, striking, and, from time to time, walking deals. I don't become over-invested. When the crisis moment (pens down moment) invariably hits, I avoid becoming unnerved.
2. If additional investment of resources (time and money primarily) are not going to secure the originally anticipated deal, I do not re-trade for a worse deal. Negotiation tactics by my counter-party do not sway me.
3. I search for, focus on and prefer to invest in non-binary opportunities. However, where there is a binary outcome, the risk of being the loser does not scare me.

By adhering to the above, I find myself unflappable and able to move on. I also find that my clients oftentimes are more willing to do the same.

For me, it took practice. It took time. I'm quite confident my daughter will be better at it with less reps and less time, even in the face of more negativity. I await the day she tells me: "Dad, let's move on and not sweat the small stuff," in whatever situation. When that happens, I'll be in the presence of her superpower.