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Excellent Executive Coaching: Growing Your Business and Enhancing Your Craft.
EEC 411: How to Persuade and Succeed at Your Negotiations, with Andres Lares
00:25:53
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- [00:05]
A
Do you want to be persuasive and negotiate, well, a deal and yet sometimes it falls by the sideway. But here, listen to Andres Lares and he will give you a process that assures a better outcome and a better success rate. So let's listen to Andres Llores.
- [00:34]
Welcome to the excellent executive coaching podcast. I'm your host, Dr. Katrina Bireus and today we have Andres Lares. Andres, welcome.
- [00:46]
B
Thank you, Katrina. Thank you for having me.
- [00:48]
A
So tell us you're a good negotiator and you've also negotiated with sports clients and everything. So we'll get to that. But before we start, give me the five main aspects of emotional intelligence and then we'll go from there.
- [01:04]
B
Perfect. Yeah, so I think it's a great place to start and I think one of the, the skills that I think has increased in value over the last 10, 20 years for sure is emotional intelligence. So self awareness. And it makes sense to start there being aware of yourself and how you present yourself to others. Self regulation, motivation, empathy and social skills. They're typically kind of defined as those five, although that's Daniel Goldman and some other ones. But really that's self awareness, self regulation, motivation, empathy and social skills.
- [01:36]
A
Okay, so that's a good start. And you're gonna explain to us how you use that in your four step process to persuade others. Perfect.
- [01:47]
B
And so, yeah, happy to do that. Briefly, we'll start by so self awareness we talked about ability to kind of recognize and understand your own emotions and there's self regulation is to really be able to manage those. Right. So one is you recognize your own emotions and the emotions of others, then you're able to regulate means really kind of manage those. The third is kind of around motivation. And so beyond kind of the very superficial ones, things like money and those are requirements obviously. But beyond that too motivates you and others, you know, empathy, which is really being able to, we talk about putting yourself in the shoes of the others, but more importantly kind of understand the emotions of others, others and then finally kind of social skills, which is a little bit more broad, but this is really about kind of understanding, managing relationships, building personal kind of relationship networks and really kind of finding common ground with others. So those are those five. Just so there's a little bit of context and we're all from the same page. And so those are really integral fully in what our model is and persuade the four step process. So the four step process is really to define this credibility, emotion, logic and action.
- [02:52]
A
Okay, Credibility, emotion, logic and action. So give US examples of credibility, emotion, logic, and action.
- [03:03]
B
Perfect. So one easy one that I think anyone can relate to is let's say you're watching TV and a commercial comes up for a toothpaste or a toothbrush. It is very likely that that person who's going to be in the commercial, the TV commercial, is either going to be an actual dentist or going to be dressed like a dentist. Right. An actor looked dentist. And so why is that happening? There's a couple of reasons, but the most important is what they're doing is they're kind of borrowing credibility. So they're giving themselves credibility with their attire that they're representing a dentist. And so now if dentist Josh Smith. We don't know if they're any good or not, but there's credibility automatically passed on because if they went to dental school or appear like they went to dental school, we're more likely to believe them around anything they say around teeth. Right. Whether it's toothpaste, toothbrush. Now, I digress for one second, but it's important to know that what's incredible is there's lots of studies that have found that even goes beyond that, that you're more likely to, you know, to listen to what a dentist says about something unrelated than you are, even if it's only specifically to dentistry. And so credibility is very, very important. That's what makes you listen. And so that's why it's not just a random person saying, oh, you should use this toothpaste. That's why someone who looks or actually is a dentist.
- [04:10]
A
Okay, so how do you use credibility in what you do and negotiation for sports clients, for example.
- [04:18]
B
And so you either build your own credibility. And so that's kind of. That could be, you know, if you're, you know, for example, in our case, working with general managers, our credibility comes from the relationships that we have where we've been doing this work for 30 years, about 20 years in sports. And so it gets passed on through word of mouth. So that's a little bit outside of your control, though some of it controlling is that you're very careful, responsible, and add value in every single relationship that you have and every single negotiation you have. But I think for, you know, people listening today of how do I practically use that, that you either want to develop your own credibility, which takes some time, or you want to bore from someone else. Right. And so bor. For someone else would be, for example, like, who else could internally. If you're going to have an internal negotiation, what's someone you Know someone who's very well respected internally that could help kind of stick up for the project or the budget, ask that you have or something like that. Right. So that'd be an example where you're borrowing credibility from another person. You're kind of getting them on board with whatever idea you have or whatever you want to kind of negotiate whatever outcome you want. And they're aiding you in bringing their credibility to the table to help get to the outcome that you want.
- [05:22]
A
So just to underline that it's very important if you have the buy in of someone within the company that will support your project besides your own credibility.
- [05:32]
B
Exactly. And then for build your own, the biggest one, the easiest to do is there's one that I say with caution, that should be done genuinely. But how do you build your own? So what is a statement against self interest? So you can borrow someone else's, that's great. But a statement against self interest. And the best example is we were just talking before the show and we said, I'm Canadian and there's a cough syrup there called Buckley's. And their famous tagline is, it tastes awful, but it works. And what's incredible with that tagline is it is encapsulating perfectly statements against self interest. So imagine someone telling you right before Katrina, you put something in your mouth, it tastes awful. Not the best marketing, if you're literally ingesting whatever it is they give you. But if you're willing to admit that it tastes awful, whatever you say next in particular, which it works, is much more likely to be believed because you are willing to accept and even share your deficiencies. So the things that you say that are positive on your side are much more likely to be believed. And so again, we want to use this cautiously and not overdo it. But that type of thing is something that can help you build your own credibility if you're not able to borrow it or when borrowing it simply isn't enough.
- [06:39]
Great.
- [06:39]
A
Interesting. Okay, the next one, unless you have another example, we can move on to emotion. Yeah, let's move to emotion.
- [06:48]
B
So emotion. Yeah. And so the first three steps of our four step model come from Aristotle. So I guess when he said, do you have another one? Another one would be, this is a perfect example. Right. So we did not come up with this model. The first three of the four steps came from Aristotle. That would be an example of us borrowing credibility. Right. If you listeners may not have heard of me, they've definitely heard of Aristotle. And he is definitely respected and credible. And so he had this brilliant finding then, which we have tested when we wrote the book and for the last 15 years tested all over the world. And it continues to be true, which is that people make decisions emotionally and then they justify them rationally. And so what happens is all over the world, and we see this most pronounced with sales, but we see it everywhere, which is that a leader may do this, which is when I'm trying to convince someone if Katrina, I'm trying to convince you to, you know, accept this proposal that I have in front of you. But whatever may be, or it's an M and A and I'm going to try you to buy your business, I'm trying to convince you to. For me to buy it from you rather than the three other offers you have from three other private equity companies. Whatever the examples, usually I will try to convince you with logic. Here's the four reasons you should pick this. Here's the five reasons you do that. We see it with, you know, pharmaceutical wrap. These are the two reasons why our drug is more. It has higher efficacy than the competitors, whatever it may be. And so we find is that logic is really important, that after the fact, when you sit down and think about it, when you share it internally or need to get internal buy in, it helps to justify your decision. But there's an emotional component that isn't being met by that when you're only trying to persuade with logic. And so there needs to be an emotional lever. So it isn't, you know, just to make an easy example in sales. For example, for me to say, these are the three reasons we're better than our competitors. When you're selling a SaaS product, that will be enough to help justify it to the tech team or a CFO when they're going to write the check. But in order to get that person fully on board, you've got to paint a picture. It's emotional. That's okay. Here's what happens if you don't do this and your competitors do, right? And that might be, you know, the scarcity or kind of the fear component or another one may be achievement of. If you do this, here's what looked like for you personally in your career and what that could look like for your marketing department that you run and what could look like for your entire organization where you're kind of showing achievement and what could happen if you do it and painting an emotional not only picture, but story for them. So those are examples of first, being aware that you typically persuade with emotion, not with logic, and then secondly, those are the types of examples of how you put that into practice.
- [09:17]
A
Yeah. So basically, the fear. You also use the fear element. If you don't do it, the competitors will and what it would look like and maybe the embellish the outcome. So that's the positive emotion. And also you use fear tactics that I hear work very well, and they work very well.
- [09:39]
B
So I do think it's important. I think, you know, it's also cover a couple other ones, like obligation, or there's a whole bunch of emotions. And the reason it's important is because fear can be a very powerful driver. And it is proven that fear, at least in the short term, is more powerful. Like, for example, people are more likely to do something if the negative side. So they could lose $10 is a more powerful driver than winning $10, even though they're both equal in the $10. Right. So fear is more powerful. But you can only use fear so many times, and that makes sense. Right. No leader can sustainably lead with fear only. Right. That can't be your only there. The stick is one tool, the carrot is another. There's many other emotions. So the one thing I would say is that is one, but it's not one to be overused. And so you want to have kind of the full arsenal of various different emotions. Obligation, scarcity, achievement, fear, like we talked about, you want to have quite a few different ones, because if you're only pulling on fear, eventually people become desensitized.
- [10:34]
A
So give us an example of the sense of obligation.
- [10:38]
B
So obligation, I mean, I'll totally take it outside of the business world, but let's say Katrina and I, you and I are close friends and we're neighbors. And. And so hypothetically, you call me and you say, hey, you know, I'm redoing my deck. I was wondering if you might be able to come help me with X, Y and Z. Right. Get all the furniture off it, because then the workers are coming and we get everything off. And so I'd be happy to come help. So great. So I come. So now that I've done something for you, the sense of obligation would be if the next day I were to say, Katrina, I was wondering if you'd be able to help me. I'm having trouble with these plants and I'm traveling. Would you mind keeping them for me for three days while I'm away to Europe on business? And so that sense of obligation would be more powerful because I just did something for you. You're going to feel a sense of Obligation to do something for me in return. So that being.
- [11:23]
A
That's very clearly explained. And the sense of achievement is the positive aspect, Right?
- [11:30]
B
Exactly. What you can achieve if you do X, Y or Z.
- [11:33]
A
Okay, so logic, you sort of explained anything else you want to add.
- [11:38]
B
So logic is what bridges kind of emotion and logic. And when you move to it is this is where the understanding that I think people know intuitively, but we don't see examples of this in communication all the time, and certainly not in a consistent basis, is that stories are much more compelling than other means of communicating something. And so what you all too often see is a presentation in front of a board, a pitch for sales, a procurement leader running an RFP that is really kind of putting up a chart, a bunch of data and communicating it. And so while there are times where that is important, if you want to move the needle from a persuasion standpoint and influence others, and that really is best done by telling a story. Right. And so again, an easy example might be you're pitching to a salesperson. And so there, rather than saying, you know, on average, people get 14% reduction in deal cycle and 22% increase in revenue, there's some data, you may want to cover that, but it'll be more impactful. And say, Katrina, you know, you run a manufacturing business with about a thousand people. Let me tell you about a similar situation. We were involved in working with another manufacturing company instead of doing air filters, makes widgets. And, you know, there are 2,000 people. Let me tell you what happened. They came in with the same challenge that you had. And let me walk you through what occurred. And you walk them through briefly that story of where they started and where they ended. And the difference is in version one, where I'm telling you, on average, 17 deal cycle, you know, contraction or reduction, that's okay. That makes sense to me. I understand what the dollars could be, and you could take it a step further and even kind of understanding their business, give them a sense of what that means. Dollars and cents. But that's different than when I tell you a story about a similar person who faced a similar challenge and where they started, where they ended. Because now Katrina can see herself in other person and can see the whole journey. And so now there's a level of confidence that Katrina may achieve that with whatever I'm offering that is much higher than when I have to kind of force myself to understand what that 17% reduction in sales cycle would be. So that if that makes sense, what's really the difference is your Ability to kind of put yourself in those shoes. I'm making it easier for you to empathize. I'm making it easier for you to be finding that information relevant when I tell you a story that has some relevance to you.
- [13:52]
A
Yes. And the person projects themselves in the story.
- [13:55]
B
Exactly.
- [13:56]
A
Very well said. Okay, so basically, instead of using cold logic, give a story with a beginning to an end where the transformation takes place so that they can see it. And basically, you're almost in the story. You're like the guide that is helping the person through the process.
- [14:16]
B
That's exactly it.
- [14:17]
A
Yeah. So, okay, that's logic, although it doesn't sound too logic.
- [14:22]
B
So the logic is how to communicate that logic. Right. It's the. That's why we put that in our logic. Because, okay, you cannot persuade others with just total emotion. Right. You know, you should do this. And pulling a bunch of emotional levers. There has to be something, as we talked about, that ability to justify. So the story then accomplishes both. That's what connects the emotion. But you are communicating with that story. Right. That example of the story is that manufacturing company that had a 27% reduction in the sales cycle length and had a 33% increase in revenue. So those that data is still being communicated, but now in a way, it's much more compelling through the story. That's why it's the same logic. And so that then leads to action, which is, if you think about the first three steps, that's where Aristotle stopped. And we always joke around that Aristotle was brilliant, but he wasn't necessarily much of a salesperson or he wasn't much of a, you know, he was a more of a philosopher than a practitioner, if you will. And so we want to do is not that this is only for sales, because we train leaders and we train procurement and project managers and everyone in between. But when you want to move it to a very practical perspective, which I know is important on this podcast, is that, okay, you now are credible in the eyes of the other party. Either you bored it, you've developed your own. You now start to pull a couple of emotional levers that are more likely to persuade the person, you've now told a story, or at least communicate the logic in a compelling fashion. So that gets you to, Katrina, do you think this is a good idea? And your answer will be yes. But what happens if you stop there two weeks from now and say, katrina, have you done anything that we talked about? And you're going to say no, that's not because you lied to Me, when I said, do you think this is a good idea? You really meant it. But that's because real life happens and you've got 15 other priorities and professionally and personally that are competing all the time. So I have to do something. The onus is on me. If I'm trying to persuade you to make sure that I increase the priority level and then sustain that. So action is about creating a plan or an environment where you facilitate action. So one example of that might be to create. When you're talking about the idea and you're pitching an idea, is to create three options, one of which you choose. So that example, why do you do that? So three, not more, because it's too many options and not less, because then it feels like ultimatum. Right. Do this or that. So if you have three options, the reason it's good is I'm creating the three options which you must choose from. So I still have some control over this. But you have a feeling of control and collaboration because you're picking them. So it's okay. We agreed on this concept. You agree it makes sense. Okay, Katrina, what do you think would be best? A, B or C? And whether you answer in the moment or I say, get back to me in a couple of days after you think about it, we are collaborating. So you're much more invested in the decision. Rather if I tell you you should do this, or if I gave you 27 options to choose from, you would probably have, you know, what people call paralysis by analysis and do nothing, because 27 choices is too many and overwhelming. So that is a kind of a simple tactical example of how to do that.
- [17:14]
A
So, yeah, that's very, very well done. I like the idea that you have. You give them three options, so you have somewhat control, but at the same time, you're giving them control because they have to choose the same thing. I transform brilliant people that are interpersonally blind to be inspirational, brilliant jerks into inspirational leaders. And it's very important that I give them a framework that is credible with a lot of data, a lot of information, but you connect that emotionally, they get a reaction and then give them the choice. Always give them the choice. So they are not panicked, but they feel they're in control to some degree, for sure.
- [18:08]
B
Because then they're doing it rather than you. Right. I think any good coach knows that I can't do it for you. Right. You're serving as a guy that makes it. You create an environment where it makes it likely, and I would say a good negotiator this is the way we talk about it is it's a person asks good questions, that allows the other party to reach the solution on their own. So you're directing them, but if they don't reach it on their own, if they don't make that choice that you just talked about, then your clients aren't going to buy in. Right. And so that's, to me, that's kind of level two or one or three or one, which is, you know, the best negotiators are prepared and they ask questions and then they propose solutions. But that level two is to ask questions and frame things in a way where you're giving almost the suggestions or ideas, whether it's three or whatever it may be, but then they are accepting it and collaborating and making their own. And so even though you kind of took them in that direction, they feel like they're the ones who did it.
- [18:58]
A
Yes. Right. What happens in the unlikely case that you cannot persuade somebody or that you missed a step in the process? So what do you do for our listeners that might be helpful?
- [19:11]
B
Yeah, So I mean, definitely, number one, it is not 100 hit rate. Right. So, you know, influencing and persuading people is compelling them to do something. And so to some extent they have to want to do it. And it also takes practice and you get better, number one. Number two, the order is important, but, you know, becomes non linear in the sense that a lot of the negotiations we're involved in are not, you know, credibility. Well, if I'm investing and growing my credibility with Katrina, that'll help me for whatever I'm trying to influence you with now, but it'll help permanently. Right. Essentially, that's a deeper, stronger relationship. And so I think I bring that up because if it hasn't worked, yes, it could be emotion. Did you, you know, did you pull an emotional lever? Yes, it could be logic. Did you communicate the logic in a compelling way? And then it could be action. Where did you, did you create an environment where it made it likely that person was going to do what you wanted them to do? Those three are very possible, but typically it's going back to the drawing board and spending as much time as possible developing credibility, relationships, rapport, tr. Trust with the party, because that ultimately will give you the benefit of the doubt. Right. You can, you can be a little less effective in the other three, but without credibility, it all goes to nothing.
- [20:17]
A
So my last question is when to go first in negotiations.
- [20:23]
B
So it's a very interesting question, and I think over time we've been able to refine it with data on when to and when not to. So you go first in order to take advantage of anchoring when both parties are very aware of the market. And then I'll describe when you don't and then why, and then you do not go first. Or it's optimal not to go first when at least one of the two parties is not aware of the market. And what I mean by that and why. So if I'm buying a house and I know the market very well and you don't, or vice versa, you know the market very well and I don't. The idea of not going first allows the possibility of an offer. It's better than you thought or worse than you thought, depending on the buy side, sell side. Higher or lower that probability or possibility that you'll be surprised pleasantly is worth not going first. Right. So you may not know how much your house is valued and actually ask for a lot less than it's worth. Or I may give you a low offer and you may accept it. Right. So you may be surprised. The flip side, we both know the market it comes down to the value of anchoring is strong and real. And so you want to anchor. So if you, you know, we both know the house is worth somewhere between 550 and 575. Based on all the comps by me, anchoring at 550 makes it more likely that I'll be on the lower end of the range rather than allowing you to go first at 575. And it's more likely we'll end up at the top of the range, but we have no idea. And that it could be worth between 400 and 600. You're better off someone giving just, you know, the first offer because they could say 400 and you buy it immediately, if that makes sense. So that's one not.
- [21:52]
A
Mm, Very interesting. So basically, if you don't know the value of your house, you let the person talk and see. But of course, if you don't know the value of the heart, this is very concrete, huh? If you don't know the value of the house, don't you think the other person will give the lowest value possible.
- [22:14]
B
So they will give the lowest value that they can defend. So generally, the way people negotiate and not everyone is not perfect actors, but even without a ton of training, what people general do is there's kind of the, the acceptable range of, you know, whatever it is, whether it's a house or a business you're trying to buy or product you're trying to sell or whatever, maybe. And so you're going to typically be in that range. So the house is worth between 400 and 600, then generally they're going to do whatever the least they feel comfortable or the most would be, depending on the buy side or sell side. And so what happens is then step two, if you don't go first, there's a few things you want to do, which is you want to make sure not to be anchored. Right. If the other side is going first, think of it this way. By letting them go first, the value of the information is worth it. The information being their first offer. So, for example, let's say you're selling your house and their first offer is 400,000, which is extremely low. You're not totally sure it's not what you wanted. Then you might have a decision tree made where, if it's below 500,000 right there and then you say, absolutely not. Katrina, thank you so much for the offer. I really appreciate it, but we are absolutely nowhere near where, you know, where we'd like to be. So why don't we just table discussions and then we can kind of reconnect if things change. And that signals to you we're not even close. And you don't even have to counter, you don't even have to say it would take at least 500 or 600. You just got to end it there. And that reaction, then we'll say, and they'll come to the drawing board most likely versus, let's say if it's 500,000, you might say, katrina, that's probably not going to work. We're going to need something better than that. You know, would you be willing to be, you know, negotiate and go somewhere a little higher and then we ask for another one and, but, and then here gets interesting. Let's say they do surprise you, which again does happen enough that makes this strategy worthwhile. And they come in at 590 on the very high range.
- [23:55]
A
Yes.
- [23:56]
B
Well, the one mistake that people make there and are not prepared for is they're like, oh my gosh, that's incredible. I was, you know, hoping for at least 500,000. I never dreamed they'd offer 590. They might jump across the stable and shake your hand and say, katrina, you got a deal. But what happens then? Katrina is going to think, oh my goodness, I way over offered for this because of how eager I am. And so there, the lesson to be learned is even when it's as good or much better than you possibly hoped for, you still need to give a little bit of friction so the other party feels good about the deal. So in that case, you might say 590. Thank you very much for the offer. This is a big decision, so I just want to speak with my wife or husband or my real estate agent or whatever it may be. So even if you're going to accept the offer and you absolutely intend to, you're not playing games and you're not going to randomly drag it on for four days, but you want to create a little friction. If you jump across the table and shake Katrina's hand to lock in that deal, Katrina is going to have real second thoughts about, you know, that offer she made, if that makes sense. That's where you need that little bit of friction.
- [24:56]
A
Great. Very, very interesting. Thank you for sharing your knowledge and experience. Tell us where people can get a hold of you.
- [25:03]
B
Yeah, so the two most common places are our website socialpowernegotiations.com and then really our LinkedIn. Most of our content, whether it's the blogs or articles or publications or certainly this podcast will all come out in LinkedIn and people can find us there.
- [25:18]
A
Well, thank you very much, Andres. Most interesting.
- [25:21]
B
Thank you very much for having me. Thank you for listening to the Excellent Executive Coaching Podcast. You can subscribe to all Future podcasts@excellentexecutivecoaching.com join us each Wednesday to learn more about the latest trends in leadership techniques and bring your coaching to the next level. To learn more about Dr. Burris CEO mastermind, use the contact form@excellentexecutivecoaching.com.