Speaker 1I'm Ted Seides, and this is Capital Allocators. For the second year, our summer series will share some of the best episodes of the past, curated from our favorites and yours. You can pull down many of the great ones on our Spotify playlists. This series pushes them to your regular listening feed. Our 2026 summer series focuses on improving the investment process. Over the next six weeks, we'll share 10 gems from interdisciplinary skill sets that will help you level up your investing across decision-making, interviewing, storytelling, negotiations, and habit formation. This week's summer series is another twofer, this time on negotiations. The first is with legendary former FBI hostage negotiator Chris Voss. The author of Never Split the Difference and founder of the Black Swan Group, where he teaches tactical empathy in negotiations. The second is with Yale professor Dalian Kane, who opened my eyes to the importance of walking away.
Speaker 2Before we get to the interview, we're excited to introduce the next chapter of Capital Allocators University, an online on-demand curriculum with an annual in-person gathering for investment professionals committed to continuous learning. One of the great ironies of investing, is that the skills that matter most over a long career are often the ones least formally taught. Things like decision-making, communication, leadership, time management, interviewing and building relationships. That's why we've evolved Capital Allocators University into an online on-demand experience, making those lessons accessible to investment professionals everywhere. The best careers don't compound through knowledge alone. They compound through knowledge and relationships. If you'd like to explore the curriculum or someone on your team who comes to mind, visit the link in our show notes or the university page on our website. Thanks so much for spreading the word about the next chapter of Capital Allocators University.
Speaker 1Capital Allocators is brought to you by AlphaSense. Here's something for you. Most AI tools today are very good at sounding right. But can you actually trace it back to a filing transcript or specific passage that drove the answer? Or are you just trusting yourself? Or are you just trusting the confidence of the output? For allocators, that's not a minor concern. A missed filing, incorrect source, or context that gets lost somewhere in the retrieval chain aren't edge cases. They're how decisions go wrong. AlphaSense is the AI platform built specifically for this. They own the content. Over 500 million curated documents from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer can link back to an exact verifiable source. Because the answer is only as good as what's underneath it. And with AlphaSense, you know exactly what that is. See it for yourself. Try a free trial at alpha-sense.com/capital. That's alpha-sense.com with a hyphen in the middle, slash capital. Capital Allocators is also brought to you by Morningstar. In a sea of data, you need to know what you can trust. Morningstar's data, analytics, and research helps bring clarity across public and private markets, connecting independent research and data into the tools and AI platforms you use every day. So insights are easier to spot and act on. Morningstar, nothing in your way. Visit morningstar.com/gameon to learn more. We're also brought to you by Juniper Square, the operations partner trusted by the leading private market GPs. One theme that keeps coming up on the show is GPs that build the strongest and most durable relationships with LPs are the ones that have both strong returns and strong operations. AI raises the stakes on operations, and having Juniper Square as your operations partner helps ensure your data is organized, accurate, and accessible. We're also brought to you by the company that's responsible for the development of the Juniper Square platform. We're also brought to you by the company that's responsible for the development of the Juniper
Speaker 3articulating a read, which happened to be wrong, the agent immediately shoots back, they got problems in other buildings, they got to sell this one. Now that's proprietary information. You should not be giving that stuff up. But not only is it a correction, people feel safe and they're correct and it just feels so good to correct. Not only does it feel good in the moment, but the other thing about an intentional correction is they never regret it. Because again, like your Maya Angelou quote, what they remember is the feeling of the moment. It's one of the best ways to tease up, maybe not proprietary, but closely held, because they don't trust you yet. Because not only do you need to get the information, but you also need them to not regret giving it to you, which is one of the problems with questions. I can question stuff out of you, but the chances of me getting closely held information diminish because nobody likes to be questioned. Even good open-ended questions can, in many cases, be hard to answer. But then the chances that if I get it out of you, that I've backed you into a corner, pried you out of it, triggered it out of you by a question, chances that you're going to regret having told me that are very high. And the hostage negotiator realizes that I got to get the information and I've got to diminish, if not entirely eliminate the regret, because the execution of the deal for a hostage negotiation is completely voluntary, which in point of fact, all deals are. The threat to sue somebody is just not a great way to do business. Penalty is not a great way to do business. Penalty clause is not a great way to do business. If you're putting penalty clauses in your contracts, that means you're not a good negotiator. So you want to get information. You want to get people to feel good about the process. So when it comes time to execute, they're happy to execute.
Speaker 1What are some of those other triggers that in the context of listening to someone, you can gather more information?
Speaker 3One of the things, again, you talk about mirroring in your book. Mirroring is a great trigger. We believe that a mirror is one to three words. Once you get north of five, that's too many words. Typically, you parrot it back to them word for word. You'll learn the skill based on the last one to three words I've just said. When you're really good at it, you can really guide a negotiation depending upon what you mirror. It's one of the really stealth, powerful methods to get people to talk. It's a great way to get people talking. The other thing that's nice about it, the reason why it's superior to a question, if I say, what did you mean by that? You'll probably repeat what you just said with the exact same sentence. The exact words, possibly even louder, sort of like an American overseas. If you repeat the exact words louder, it automatically becomes more apparent. But a mirror, you'll never repeat the same words. You'll reword it. There's something about the mirror. The message comes across for me and it impacts you is, I heard what you said. For whatever reason, the words you used weren't exactly right for me. It would be really helpful for me if you reworded the meaning of what you just said. All that is packed into the act of mirroring and the other person expanding, elaborating. Again, in many cases, a great way to get closely held information without the other side regretting it. So mirror is one of the great skills. Minimal effort, tremendously elegant, ridiculously effective. So
Speaker 1that elegant, effective mirror is just a way to get you to continue talking.
Speaker 3Right. My son, Brandon, the president of the company, refers to it as a connector. It tends to connect thinking. For whatever reason, maybe you need just a slight break. The amount of time it takes to mirror and to respond to a mirror is probably about three seconds. I remember a long time ago, I was at a conference sponsored by the Gallup poll and they said, how long is a moment? A moment is three seconds, but effective pause is often three seconds. Your brain can cover a lot of ground in three seconds. A mirror really creates that much time, slows the game down. For you, the listener, it doesn't slow things down for the talker.
Speaker 1So once you're past a mirror, you've talked about labeling as another technique that just allows people to gather information. I would love to hear what that means and how you go about doing
Speaker 3it. Yeah, the labeling is like the MacGyver tool, like the ridiculous superpower. The label is, it seems like, it sounds like, it looks like. You seem, you sound, you look, it feels like. In a hostage negotiation, it was called, an emotion label specifically designed to just label emotions. And when we were adapting the Black Swan method out of hostage negotiation in the earlier days, number one, I didn't think labels had really any use at all. And they turn out to be like our most effective skill. Our top tier people will only label. And we've gone from just labeling emotions and dynamics to types of labels. An asking label, it seems like you're uncertain versus what are you uncertain about? Now, the label is much more likely to get a solid stream of consciousness response. It's so much better than asking questions. Once you learn how to convert over, we've got clients that say labels unlock the floodgates of truth talk. They're vastly superior to questions of any type. Closed-ended questions where you're fishing for a yes tend to be really bad. Intentionally fishing for a no, are you? Is this a bad idea? Is this ridiculous? Have you given up on? Those are great ways to kick conversations into gear. There's also an issue of decision fatigue or maybe your ability to respond to questions. Like if I ask you a great what question or a how question anytime after three o'clock in the afternoon, chances are your decision fatigue has gotten you to the point where you're just like, I don't know. Because the what and how questions trigger what Danny Donovan would call slow thinking or in-depth thinking. You have to have enough gas in a tank to do that. Every human being alive has a limited number of decisions that they can make in a given day. Whether you're Warren Buffett or whether you're Joe Biden or whether or not you're the guy in the corner that's selling newspapers. Limited decisions. So if I ask a great open-ended question, it requires an in-depth, thoughtful answer for you anytime after 11 o'clock in the morning. There are a whole bunch of biological things getting away. Circadian rhythm. Diet. How much stress you had that day. What you had to eat. Whether or not you've eaten at all. After 11 a.m. Labels on the other hand, that's just not there. Let me give you an example. I'm coming back from overseas a couple of weeks ago. I shoot out a question via text to one of my colleagues. Now getting the background behind the question is always much more important. So he could have responded to me with what makes you ask. Which is a great response when I have enough gas in a tank to answer. And I was tired. Instead, he shot back a label. Seems like he got a reason for asking. And I was like, wow. And I just bang, bang, bang, bang, bang. Knocked out and concise text messages. All my reasons for asking. And I know that if he'd have said, what makes you ask? I'd have been like, I don't know. Answer the question. Don't ask me what makes me ask. Because I didn't have enough gas in the tank. So the labels end up being like this ridiculously versatile tool that's great at getting information out of people without making them feel cornered or interrogated, no matter how tired they are.
Speaker 1We hear a lot about open-ended questions as a good thing compared to closed-end questions. So now you have the open-ended questions at certain times a day. And then you have labels maybe all day, but in particular, other times a day. What are some of those other questioning tools that are effective in eliciting information?
Speaker 3Well, really getting a no-oriented question. What I've also found is no matter how tired I am, I can answer. I can say no. And I can probably, having said no, throw in some more information. Guidance. I had an intern that I told never asked me a question after two o'clock in the afternoon. I can't answer with no. Do you want me to do this is much better than what do you want me to do? Because if I don't want him to do it, I go, no, don't do that. Do this. Bang, bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Bang. Very difficult for executives and companies. Friend of mine, Tom McCabe is head of the DBS for the Americas. He was talking to me about how to thrive as an executive is going to the boss, be willing to get shot down, take his feedback and come back with a smarter idea. So boss got limited time. Walk in, make a proposal. If it isn't dead on, boss going to say no. Now you're going to be crushed. But instead of being crushed, the boss probably going to give you some great guidance in a really short period of time. Show me what you're going to do. And then I'm going to show him that you've learned and come back again, having gotten wiser as a result of the guidance he gave you after he said no. And we're seeing very consistently across the board that if you get somebody to say, no, are you against this? They'll say, no, I'm not against this, but here are the following problems. When you might ask a yes-oriented question, which would be a mistake, you might say, are you in favor of this? The problem with that is you'd love for them to say, well, I'm in favor of it, but the following. problems are here. No one is comfortable referring to the following problems because they feel like everything they throw out is a commitment, is a trap, is a tie-down, and nobody likes to get tied down. Having said no, you feel no obligation to continue, even if you laid a whole bunch of stuff out. Because I never said I was going to agree, but here are the problems. Solve them and maybe we'll talk about it. There's just so much more freedom after having said no, that you want the other person to feel safe and proceeding. You don't want her to feel trapped. And getting out of the yes business entirely is a problem. a really smart move.
Speaker 1What are some of those cues for the no type questions that lead into that
Speaker 3opening? Typically, if you feel like you want to close or you want to offer ideas, you want to proceed in some way. I may hear you out and then I may say, are you against me sharing some thoughts with you? It's a bit of a temperature check. You may say, no, I'm not against you sharing thoughts, but I got seven minutes. Can you do in seven minutes? I may suddenly know there may be a time deadline I didn't know about. No, I'm not against you sharing some thoughts, but I got a few more things to say. Nobody can listen to you until they feel heard. Basically, debris they have in their brain. So an oriented question is typically what we use as a close or a test to see if it's okay for us to throw some ideas out.
Speaker 1So you said no one can listen to you until they feel heard. And we've talked about some of those techniques. Are all of those techniques ways of allowing someone to feel heard?
Speaker 3Definitely part of it. Paraphrasing. Typically, you really want to make sure you got it right. You're going to throw the labeling and the paraphrasing together and bundle it all up and summarize. Like if you're going to summarize the other person's perspective, it's a combination of what happened and how they feel about it, which is actually how we structure teaching people to summarize. So far, you've told me X. As a result, you feel Y. If you've done a really good job, what you're driving for is a that's right, that's right is what people say when they feel heard, when they feel that what's been repeated back to them is true. If you got a full-on summary and you get like a that's right out of the other side and possibly even add some insights based on what they've said, what you trigger in them is an epiphany. You're trying to trigger an epiphany in the other side or a bonding moment of some sort. Bonding moments come from oxytocin. Oxytocin is the bonding drug. Interestingly enough, while we've always talked about oxytocin as a bonding neurochemical, listening to Andrew Huberman, my favorite podcaster, a couple of podcasts back, he talks about oxytocin also increases the chances you'll tell the truth. So when people feel heard, they bond to you and the likelihood that they will be honest with you increases dramatically, which is what you want for the negotiation. You want to feel attached, so you want them to tell you the truth.
Speaker 1How else, when you're approaching someone, whether it's a negotiation or day-to-day interaction, do you engage with people so that they feel safe?
Speaker 3It's an effort which becomes smoother with practice, but frequently it's just something as simple as practice and throwing out a cold read label on somebody just because it's a perishable skill. There's no way around the fact that negotiations is a perishable skill. There just isn't. And anybody, if you're not working at your communication skills, you're keeping your emotional intelligence. So it goes dormant. It doesn't go away, but it does go dormant. I get a charge out of people that say, yeah, I'm a great negotiator. And I tell you about a deal that they're really proud of, which was years ago. I can always tell right away, they're not keeping up on their skills and they're picking up bad habits. And every now and then a bad habit will hit a home run. You can stand improperly and swing the bat improperly enough times you're bound to hit one out of the park, but that's the one you're going to remember. So the selection bias, people remember their victories and they forget how few and far between they are. So you got to work at it on a daily basis just to keep your instinct up.
Speaker 1So let's dive into the negotiation side. When you're approaching a negotiation, how do you think about preparing?
Speaker 3I'm going to want to summarize what they've got against the deal. The issue of preparation versus over-preparation. If you're interviewing, you're in a negotiation. The most dangerous negotiation is one you don't know you're at. You're starting to interview. You are negotiating. And while you're interviewing, you're gathering information. Ideally, you're not diminishing the relationship simultaneously. People are going to tell you stuff faster the sooner you engage. The information that you're trying to gather on somebody is pretty much like looking at their dating profile. It's not a bad starting point. But if you have looked at somebody's dating profile and assume you got a good beat on that person, you are in for a surprise. Several years ago, a millennial was talking to me about using a black swan method. It's a great success. And by the way, my comment on generations, millennials versus Gen X, Gen Z, baby boomers, whatever. Top performers are all alike across the generations. It doesn't matter what generation they're a part of. The top one to 5%, they're all curious, they're all ambitious, they're all learners. When you start talking about difference in generations, you're talking about a generation about the middle of the bell curve, the C students, the C to the B minus students. You're in business, you're interested in the top performers. It doesn't matter how old they are. They want to learn, they want to get better. So this millennial is talking to me about using a black swan method and his job at his company was to get a second meeting. He's the cold caller. It's his job to set up the second meeting. So I said, I love what you're doing here. Are you doing more research as a result before you make this call? He goes, no, no, way less. They're going to tell you stuff faster than I could ever find out. It would take me a month to find out what I could find out from them in five minutes if I know how to get it out of them. So your most valuable commodity is time. If you love research, if you love data, if you love information, you may spend a month gathering the information external to the conversation that you could have gotten in five to 10 minutes. Time is the most valuable commodity. How do you use your time most wisely?
Speaker 1We're going to take a quick break in the action to tell you about Ridgeline, the investment management platform built for firms who are rethinking how work gets done. You're at your desk looking at a line graph of your firm's growth. The line is moving sideways, linear growth, and you know exactly why. You're constrained by your operational bandwidth that's been the same for so long, it just feels like the cost of doing business. Ridgeline is built to change that line's trajectory, to be the inflection point that takes your growth from incremental to accelerated with the team you already have in place. Ridgeline is the only AI native investment management platform that brings together the front, middle, and back office with one set of data and powerful AI agents that automate away operational drudgery. So your talent can shift from managing old technology to materializing new ideas. Ridgeline helps you to change that line's trajectory. Ridgeline helps asset and wealth managers understand and improve their firm's growth trajectory. To see how your firm compares to 16,000 of your peers, visit ridgeline.ai slash trajectory. If you file form ADV, your firm is already there. Then talk to Ridgeline about how you can do more with the team you already have. So how do you teach how to use the time wisely in the black swan method?
Speaker 3We encourage people, no matter what you're doing, you got to start pulling data on what's going on. And what am I talking about? From initial engagement to close, how long does it take you, somebody that you've closed? You need to start to become aware of the people that you never close and how long they take. First, start paying attention to the behavioral profiles of the people you don't get deals with. Suddenly, you're going to find out a tremendous repetitive pattern of behavior. So what we first do when we're teaching on our people first, start listening to people. And then let's start paying attention to who you close with and who you don't. You're going to find that at least half the people you don't close with, it wasn't your fault. It was written there the whole time. If that's true, we can start diminishing our time commitment with these people. We call them halves. It's a phrase we learned from Joe Polish, hard, annoying, lame, and frustrating. A very specific cluster of behaviors and statements that they make. And it's a very specific cluster of behaviors and statements that they make. And I got my people, first of all, I said, all right, so I'm happy to walk away from the halves. We got to learn how to walk away from the people that are wasting our time sooner. The whole team has embraced it. So then we started pulling some data on it. People that we make deals with, we call them ELFs, easy, lucrative, and fun. Another Joe Polish term. So then I told my head of business development, now let's start comparing time. How much time to close a deal with a half versus closing a deal with an ELF? No less than three times the amount of time. Closer to five times the amount of time. Plus, if they're hard, annoying, lame, and frustrating for us, to be fair, we may be for them too, which means the chances that we're going to repeat are very low. So then you say, all right, so here's a customer here that we close in 20% of the time and gives us repeat business. Here's another counterpart that takes us five times as long and is not going to give us repeat business. The interaction is going to be so painful for both sides. We're going to close in 20% of the time. We're ever want to do it again. Who do we focus on? I strongly encourage our people and we implement it to a very high level. Stick with the people that the velocity of the deals is high. The profitability is good. We share the same core values. We're going to want to keep doing business
Speaker 1with them. In the context of that initial research, and then you're going through the process with the halfs and the ELFs, what are the things that you coach people to move the ball forward?
Speaker 3Activating the negatives in the other side. its head. As human beings, before we decide to do something, we actually reconcile all the negatives. I noticed another thing in looking through your book, one of the books you recommended is Iger's book, The Ride of a Lifetime by Disney. Phenomenal book. And also, to me, he defines the success of empathy. Empathy is the ability to articulate the other side's point of view. Now, Iger is in company after company after company that gets taken over. What happens first when a company is taken over? Many of the executives are shown the door because they are now in a company that they didn't join, and they don't like the new rules. They were successful before. There's all these reasons why executives in companies that are taken over don't survive, good and bad on both sides. Iger rises to the top every time. He's in a company that gets taken over, and he's in a company that gets taken over. He's in a company that gets taken over, and he's in a company that gets taken over, and he's in a company that gets taken over, rises to the top again. When he was with ABC Sports, he was talking about in the Rune Arledge, they were rock stars. They're riding around in limousines. They got expensive counts. They're living the high life. Then the company, I think Cap Cities took him and said, no more limos, no more living the high life. Their perspective could be like, look, I've shown you how effective I can be. Don't bother me. Iger's not that way. It's like, all right, so this new people are in charge. Here's what you want. Here's why you want it. Just the process of, first of all, saying why the other side wants new rules that you don't like, leveled him out and established a relationship. Now, the negotiation for Pixar, Disney-Pixar negotiation. Probably everybody that studied mergers will point to that as one of the great deals of all time. Disney can't make an animated cartoon for 10 seconds. Anybody watches. The inventors of animation, everybody hates their stuff. Pixar comes in. It's a great deal. It's a great deal. It's a great deal. It's a marriage made in heaven. And everybody assumes that obviously it went down well. Not the case. Iger talks about how bad that was between Jobs and Eisner. Prior to that, and Iger walks into this and Jobs is blaming him for everything. So what am I driving at? The negatives. They sit down and do a whiteboard exercise. Iger's smart enough to go to Apple. Jobs writes pros and cons on a board. Says, you go first. Iger knows how much Jobs hates Disney. He's scared to pick up the pen. So he's like, nah, go ahead. Jobs begins to slaughter Disney. Just slaughter him. I mean, just sure to use some profanity on him. Does everything but call him profane names. Talks about that they're life-sucking entities from which there is no escape. All this nonsense. I mean, brutal. Doesn't write a single pro up. Iger's devastated. He doesn't know what to say. And he says, man, there's a lot of negatives there. And Jobs says, yeah, but sometimes a few positives outweighs the negatives. Like, I think people don't know what to say. They don't know what to say. People read that story and they completely miss the necessity to make a deal is deactivating, reconciling the negatives first. So if you can reconcile the negatives first, it clears the debris in our reptilian brain, our survival mode brain, which is 75% negative. There's nothing more effective to clearing negatives than just calling out the elephant in the room. Not denying it, not explaining it, just calling it out. That is neuroscience proven the best way to get rid of negatives. And what happens is exactly like what happened in that interaction between Iger and Jobs. When Jobs has the opportunity to get all the negatives out, just articulate them, suddenly says the positives outweigh the negatives. That's the way everybody makes decisions. Your pitch and gain, it's a very low percentage success rate. You're successful, just not anywhere near as successful as you could be by first deactivating the negatives. Recognize the negatives. I want to ask you about overcoming fear.
Speaker 1In negotiations and all these things, there's an aspect of being afraid of not getting what you want. How do you handle that?
Speaker 3The short answer is curiosity at all times. I read Nassim Nicholas Taleb's stuff. He wrote the book called The Black Swan, which inspired the name of my company, 2007. I came across his book from 2012 called Anti-Fragile. It's a book called Anti-Fragile. It's a book called Anti-Fragile, where he talks about curiosity is an anti-fragile characteristic. What does it mean to be anti-fragile? To gain from problems, to gain from disorder, to gain from trauma, post-traumatic stress growth. Fear is dramatic. So what's curiosity? Curiosity is highly positive. Derek Gaunt, one of our two top coaches, over and over and over again, he said, stay curious, stay curious, stay curious. When you're curious, you also, push fear out of your brain. You can't be afraid and curious simultaneously. When you're curious, you're in a positive state of mind, which you're smarter. You hear better. You see patterns more quickly. You see deals faster when you're genuinely curious. And so the automatic hack to eliminate fear is simply to be curious. It sounds too simple to be true. You got to try it to find out.
Speaker 1I'm curious in all of the work you've done the last couple of years, what's your favorite story to tell that embodies so much of these tips in a practical way?
Speaker 3The first big case I worked on the Philippines, terrorist group on the other side. American having done something showing very bad judgment, which is how people usually get kidnapped. People don't get kidnapped doing smart stuff. They get kidnapped wandering into situations they shouldn't wander into. And they're always blue collar types because the white collar types got all kinds of security around them. They're hard to talk to. They're very hard targets. Blue collar type shows up, walks onto the ex, if you will. To use my special forces buddies analogy, the ex is where you take somebody down. So this guy walks onto the ex, gets kidnapped. We don't have dime one to throw on the table when we start this kidnapping negotiation. International kidnapping is a lot like in a bank robbery, you give the bank teller bait money so the bank teller doesn't get killed. The bad guy leaves the bank with a small amount of money. Teller's not dead and the money becomes as bad as it gets. Evidence. It's a best analogy for kidnapping negotiations. When this starts, we don't have dime one to throw on the table. Although eventually you can find some money someplace because relatively speaking, nearly every American is wealthy compared to people in the South of Philippines. You want to see extreme poverty, this is one of the places to go. But we're not going to throw any money on the table. We're just going to hear the other side out. We're going to hear this guy out. And finally, a couple of months into the kidnapping, what Brandon, again, my son likes to call the birth of the kidnapping. The that's right moment. We get a that's right out of a sociopathic killer. We summarize his perspective. Oppression, 500 years, colonial invaders, the whole nine. Everything that he said, all his justifications for holding the American and why he wants $10 million in war damages, not ransom, war damages. Complete summary and then dead silence and a terrorist says, I don't know who called you. The terrorists, the killer from before. Yeah, really? What did he say? He said, have you been promoted yet? Yeah, I don't know who called you. Yeah, really? What did he say? You're really good at what you do. They should promote you. And he hangs up. He called him to pay his respects. That's my favorite story. After it was all said and done, the application of this method, had these two met on the battlefield, they'd have killed each other. They're both warriors in their own right. The guy I'm coaching, good guy, but a very dangerous guy in his own right. But the respect between enemies to the point where they were certainly willing to talk with each other again, that's my favorite story.
Speaker 1When you've taken the lens from hostage negotiations to business negotiation, I'm curious, what have you seen in terms of what's most effective in coaching people in the business world in negotiations?
Speaker 3Well, we emphasize tiny little shifts. All of it applies. We emphasize a calming, soothing voice, the late night FM DJ voice as a default voice in hostage negotiation, smiling rarely. It's much more important to smile when you speak in business negotiations because you're driving a different emotional dynamic. I'm a firm believer in this stat from Sean Acker, a Harvard psychologist. I think his TED Talk is The Happy Secret to Better Work. That's the name of the TED Talk. Wonderful, entertaining TED Talk. He says you're 31% smarter in a positive frame of mind. Now, hostage negotiators typically get to turn down anger first. So if you're 31% smarter, you're at least 31% dumber in a positive frame of mind. You're at least 31% dumber in a negative frame of mind. What's your starting point? You want to get people into positive frame of mind, and there's no shortage of neuroscience out there now. The mind state of flow is highly positive. You're smarter in a positive frame of mind. Curiosity is a superpower, by the way. Where are you starting there? Getting a read on the other side as to which sort of emotionality that you want to put into the situation. After that, information gathering, rapport building, we really feel like we've refined the hostage negotiation skills. The black swan method is so far beyond hostage negotiation because of our business experience. We've taken the same tools. We understand their adaptation much more intimately because we practiced it, studied it, refined it so much. And as a team, I got this phenomenal team that is constantly improving the method. So we're still using the same skills. I think we're using them in a much more sophisticated way.
Speaker 1What's the process for someone who wants to work with you with the black swan method? How do they go about it?
Speaker 3The book is a great starting point. The book is inexpensive and we got a bunch of free stuff. We want people to subscribe to the newsletter because it's concise and it's actionable. You want to get your start, become familiar with the book, start immediately applying the lessons of the book. Start using all the free content that we have, tons of free content. Now we've got some really sophisticated stuff. We're going to want to walk you through, but you got to be ready for it. You got to get the essentials, the cornerstones. You got to build your foundation with at least a familiarity with the skills. The masterclass is a phenomenal place to supplement the learning. The amount of feedback that we've gotten from the masterclass, which also interestingly enough, you're going to learn differently at different times of the day. Maybe you want to read in the morning, but you want to watch a video and listen to the book. You're going to want to read in the morning, but you want to the video with sound in the middle of the afternoon or the evening. Your brain's going to soak it in at different times during different days. No matter what time of day it is, where you want to start, there's something probably on our website that we can get you started and begin to increase the velocity of your deal-making.
Speaker 1What's the latest addition to your repertoire that you've figured out over the last stretch of time?
Speaker 3Two things. First of all, in a half, hard, annoying, lame, and frustrating. Can you convert a half to an elf? We've got a couple of ways of doing that successfully. Like some people are engaging in bad behavior just because they've been conditioned that it works and they don't know how damaging it is. Scope creep is a tremendous example of that or asking for additional things after you've cut the deal. There's a lot of coaching out there to continue to ask after the deal. People do it because that's the way they were coached and it works and they don't realize how damaging it is to the relationship. So we've got very specific skills. How to get somebody out of that behavior. We've always coached people, let out no a little at a time. So how am I supposed to do that as a first way of letting out no? Nobody should ever be surprised. When you come to a full and complete no, they should have seen it coming if they were paying attention for a while. But I didn't realize when you're saying no, you're saying no to one of four things. You're saying no to either the terms, the price, the behavior, or the person. Now we taught people to say, how am I supposed to do that four different ways? Changing the emphasis, how am I supposed to do that? Which is, please take a look. Very little about this works for me. How am I supposed to do that focuses down either on a specific term or a specific price. I didn't realize that in coaching that we were really helping people understand. You might not be saying no to the whole deal. How do you tease out that you're just saying no to a portion of it so the other side knows and it gives them the opportunity to change that aspect of it? Most people think no is just a atomic bomb, blanket no. No to everything. Well, it's rarely no to everything. It's generally no to one of those aspects. No to behavior. Maybe the person's got bad behavior, they just don't know it. The deal's not bad, but the way they behave just doesn't work for you. Give them an understanding that it's a behavior-oriented issue. They may be doing it accidentally. Give them a chance to straighten it up. You can't change everybody's behavior, but there's enough of them out there that you can at least give them the opportunity to change. And if you can get them to switch over, you can make great deals with them. What's next for you, Chris? We're going to put out a lot more video content on our own. We love where the software is going. We're just with a company that we shot a bunch of films so they could create avatars so that if we want to change the content, we don't have to go back into the studio to shoot it again. They can re-film with the avatars and we look pretty good. We're actually, about a year from now, I expect the operations manual for Never Split the Difference. We're working on that now. All the things that we've learned, how we've up-leveled the skills, we really are categorizing them at three levels now, which we didn't really understand we were doing before. And so helping make it more easily digested is what's going to be in a lot of the manual for Never Split the Difference. That should be out in about a year. Chris, I want to ask you a couple of fun closing
Speaker 1questions before I let you go. What is your favorite hobby or activity outside of work and family?
Speaker 3Any sort of adventure travel. I don't got a whitewater, some rapids in China or in the Himalayas. I had a Harley. I'm going to have one again. If I just jump on my bike, not knowing for sure whether I'm going to be out for 15 minutes or two hours. And I don't know where I'm going. I love any sort of discovery travel. Discovery light, discovery heavy. Doesn't matter what it is. I like adventurous, unplanned travel. What's your biggest pet peeve? Not being listened to. One of the problems with getting good at listening is you get annoyed by those that don't listen. And then you get annoyed by those that don't listen. And then I also realized one of my follow on things is I'm highly sensitive to having my time wasted. I think everybody should be. Your most valuable commodity is time. If you're not listening to me, you're wasting my time. I'm talking to you. It's doing me no good. I'm totally wasting my time. I get triggered if you're not listening. Which two people have had the biggest impact on your professional life? Probably Gary Nessner, my former boss at Crisis Negotiation Unit. Wow. You want to go fast, go alone, you want to go far, go as a team. The team has really been organized and built by my son, Brandon. He's been a great sounding board. I realize to some degree they say, "Is the son following a father's footsteps?" Well, his feet are bigger than mine, which means he's expanded the thinking. Every time he stepped into a footprint that I left, he left it much bigger. So he's really had the biggest impact because there are no shortage of other hostage negotiators. They were at least as smart as me that didn't pull together a team, and nobody knows who they are. What's the biggest mistake
Speaker 1you've made and what did you learn from it?
Speaker 3The worst thing you can do to somebody, no matter how wrong they are, is embarrass them, especially in front of other people. We had a meeting at the National Security Council one time where I embarrassed somebody from the Department of State, and they paid me back with interest. I'm still not a thousand percent sure as to how I should have handled it because I got put in a position of potentially needing to lie to get out of it, and I don't lie, period. I should have found a way to get out of it gracefully as opposed to getting angry and upset and subsequently embarrassing the people involved. What teaching from your parents has most stayed with you? Direct and indirect. Directly, my parents told me to work hard, just work hard, be a hard worker. Indirectly, they're very big on me figuring it out on my own. My father, my mother, give you tasks, and I get out there and figure it out. Here are the tools, go figure out how to do it.
Speaker 1All right, Chris, last one. What life lesson have you learned that you wish you knew a lot earlier in life?
Speaker 3Just be a little nicer. You don't got to change what you believe in or what you stand up for. You should always stand up for what you believe in. That doesn't mean that you got to do it by making people feel like they got hit in the face with a brick. Chris, thanks so much for taking the time. Really enjoyed it.
Speaker 1I enjoyed the conversation a lot. Thank you for having me on. Chris: Thanks for listening to the show. If you like what you heard, hop on our website at CapitalAllocators.com, where you can access past shows, join our mailing list, and sign up for premium content. Have a good one and see you next time. All opinions expressed
Speaker 4by Ted and podcast guests are solely their own opinions and do not reflect the opinion of Capital Allocators or their firms. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Capital Allocators podcast guests may maintain positions and securities discussed on this podcast.
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