Strategic restraint: Sometimes, losing is winning

Appropriate restraint is a great virtue, and those with deep experience are best equipped to exercise appropriate restraint, as “After Lying Low in Boom, No Bust for New York’s Real Estate Royalty” illustrates:

At the height of the boom, the Dursts, the Rudins, the Roses, the LeFraks and other members of New York’s royal real estate families were treated like slow-moving dinosaurs on the verge of extinction.

Although they had spent more than five decades carving their names into the New York skyline, the families were outbid and sometimes outmaneuvered by the newer, flashier speculators and investors who swaggered down Manhattan streets buying one skyscraper after another at record-setting prices.

But now that some of the record-breakers are desperately trying to fend off lenders or teetering at the edge of bankruptcy, these families are looking like wise veterans. They are in relatively healthy financial shape and eager to do deals. They do not necessarily take pleasure in the downfall of the upstarts, but they do relish the fact that, as one scion said with a bit of exaggeration, “Now, we’re the only ones breathing.”

Appropriate self-restraint is obviously valuable in bidding and purchasing situations but also provides benefits in many other fields. A soccer player can’t run at top speed for an entire match but must judiciously expend his/her energy reserves. A pianist or jazz trumpeter can’t hit every note with wild fury but must modulate intensity as the music’s mood demands. When dating, some people act too excited too early, scaring off their prospective partner. And wise parents discipline their children in ways thoughtfully chosen to help the children improve, rather than impulsively disciplining out of anger (by spanking, screaming or other counterproductive approaches).

In all these situations, restraint is strategic and produces superior long-term outcomes. The soccer player may not get to every ball early in the game but they’ll be fresher later in the game and play an overall superior match. The musician optimizes the overall listening experience by varying pitch, dynamics, and timbre. And children whose parents discipline them appropriately learn and internalize good behaviors and come to trust their parents' judgment, without developing resentment toward them that causes many children to rebel against their parents.

Posted by James on Tuesday, February 09, 2010