The one skill that we need in the day to day

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The big secret

What comes to your mind, when I say the word pie? Maybe you are getting hungry ? But if I tell you that the secret, the big secret that is needed for the day to day can be found in a pie, would you believe me?

So what is the big secret, you ask? It is the science of negotiation and leverage. This is perhaps the most important skill that we need in our rapidly evolving dynamic world filled with uncertainties.

Why negotiate?

If we take a neutral stance and look at everything from up top, we can see that each and everything in life from Jobs, Friendships, Relationships, Finance requires some or the other form of negotiation, persuasion. If we have some leverage, then we can get the best possible outcome which is fair to everyone involved.

But most often what happens is that we end up like a turkey before thanksgiving, fragile and vulnerable when the “unexpected” outcome strikes.

As per Taleb, the greatest question in life becomes how does one become turkey in reverse? I.e instead of being harmed by an unexpected outcome, how does one benefit from the unexpected uncertainties?

The answer lies again in building leverage and correctly identifying the pie.

How does one build leverage?

Leverage can be built when we become extremely good at something like a skill which makes you uniquely valuable, a network or social life which allows opportunities to find you or even a set of routine habits which helps you sift through storms with a breeze.

Leverage also can be built by understanding how capitalism works, which is the idea of “Who is indebted to whom”. If we owe our debts (not only monetary) to several people, we do not actually have any leverage in that situation. This perhaps the reason why occasionally doing things for free could actually be a huge boost to our leverage.

As I read through “capitalism without capital”, I realised that leverage can be permissionless like code or media or any other intangibles which require no additional cost.

Returning to the pie

The art of successful negotiation which is fair, transparent and honest lies in identifying the pie. We look at he world from what we want to get from it but very rarely we pay attention to what we are getting from it or what we bring to the table and that’s where leverage comes into play.

The pie in this case is the additional benefit or gain that is possible when two parties come to an agreement.

If lets say I can make x by working alone and lets say you can make y by working alone. If we decide to come to an agrement to work together and create something of value z. Then the pie in this case would be the difference which is z -(x+y).

In a fair negotiation, I would have claims to half of the pie and the other half will go to you. But rarely do we pay attention to the pie and we end up with bad if not worse deals.

Even though it would appear that the example is appropriate to finance domains, the same can be extended to almost any sphere of our lives and that’s what makes negotiations, leverage and pie so interesting!

Hope you enjoyed reading the article above!