Mike Caro’s Law of Loose Wiring

Mike “The Mad Genius” Caro is a professional poker player, theorist, author and casino executive. His “Law of Loose Wiring” serves him well at the table and it is workable for all of us in other places. Its definition is:

“When choices are not closely connected to benefits, people usually behave in unpredictable ways.
When choices are closely connected to benefits, people sometimes behave in unpredictable ways.”

Benefit + Connection + Choice = Behaviour

You can describe the benefits, the choice and the connection. You cannot control the behaviour, but you can influence it by showing valuable benefits strongly connected to the choice or choices.

You will not win every time, but then you don’t need to. There is no such thing as a sure thing only positive probabilities. Seeking perfection is a losing proposition.

Outside the casino, the equation applies to children, employees, business partners, bankers, clients, prospective clients and (dare I say) spouses. Clear choices directly connected to desirable benefits is what you aim for.  When the unexpected outcome happens, and it will,  you need to learn from the transaction. You can reduce the incidence of failure over the long run, by paying attention to what happened. Many of the failings are within your control. There are at least nine possibilities.

  1. You failed to notice that the benefit was unimportant to the other person.
  2. You described the benefit poorly
  3. You did not make the choice clear.
  4. You did not connect the choice to the benefit
  5. The other person doesn’t trust your descriptions
  6. The person lied to you about their resources or interest
  7. You misunderstood what they told you.
  8. It is not urgent enough for them
  9. The other person is insane.

I suppose it is theoretically possible that you are insane, but you likely won’t notice that.

You sell everyday. From getting the children to put their toys away, to getting employees to come to work on time, to getting better service in a restaurant, to getting a better price at the furniture store.

You cannot sell well until you can describe the benefit, the choice required and the connection between the choice and the benefit in terms that the other person can accept.

When the outcome is not what you want, you should check the wiring.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. don.s@protectorsgroup.com

5 Comments on “Mike Caro’s Law of Loose Wiring

  1. When i retrospect i can pin down the failures to one of these 9 possibilities. What a revelation!

  2. Pingback: Are We Going The Same Way? | moneyFYI

  3. Pingback: Carl Rogers Can Help Advisors – moneyFYI

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