A very talented person I used to work with conceptualized what we did by using this phrase: “threading the needle.” After years of practice, I’m convinced it is the way great collaborators find solutions to complex problems. Largely because of what it doesn’t do. Threading the needle doesn’t create a solution that fits the greatest desires. It creates a solution that avoids the worst fears.

This is the work regulators and hedge funds do. They manage against what’s known as downside risk. The greater the complexity, the fewer chances to create solutions that produce upside for everyone. Because everyone’s “upside” is different from one case, one place, to the next. Downside is far more universal and amenable to solutions.

It sounds crazy but people seem to be just as happy when you address the downside for them. So the path is clear: thread the needle between the various worst-case scenarios (e.g., Party A will lose money; Party B will lose money, too; Party C will lose precedence; Party D will lose status quo). Protect against the downside risk. It’s a fine place to start. Then go for maximum upside if you can. The people who do this well are rare and valuable.

Photo by Markus Grossalbar