“Look, I know you think we are underpaying you, I know it is not fair on your part, but I felt the need to address the elephant in the room and clear it all out if you want to continue”. “I know that you are not getting the kind of work you would have liked, but you are the best we have for this job and I don’t think I can put you anywhere else”. “If you don’t like it, leave”.
Perhaps the best example of this kind of fear-mongering comes from the plot of the Oscar-nominated movie Glengarry Glen Ross in which all the salesmen are given the news that all but the top two will be fired at the end of the week if they don’t close enough leads. Watch this epic scene from the movie to understand the essence of this movie -
Sounds familiar? This is a tactic used to gain access to your emotions and inflame loss aversion - idea that losses loom larger than gains. Once you realize that there is a slight chance of losing what you have, you try to salvage what you have instead of gunning for more. Pure human nature!
Let me show you a recent and extreme example of how one company, Mu Sigma, changed its job offer to new undergrads at the last moment during the peak of COVID-19 in June 2020. They very well understood the lack of options and fear among students. This is what this new bone-chilling non-sense offer reads:
“The candidate would sign a lock-in contract of 4 YEARS (It was 3 years in previous cycles). Candidates must pay back 500% of their salary if they resign in year 1, 200% in year 2, 100% in year 3, 50% in yr 4.”
This predatory and atrocious offer was rolled out just a month before students were meant to join. Take it or leave it. Can you imagine working at such an exploitative company for 4 YEARS?
Anchoring Emotions in a minefield of low expectations
Chris Voss in his brilliant book Never Split the Difference used this bias against loss to “anchor the emotions”. To depict it, he shares his own experience -
“I (Chris Voss) had to go back to the contractors I’d signed up, who normally got $2,000 a day, and tell them that for several months, I could only offer $500.
I knew exactly what they would do if I just told them straight out: they’d laugh me out of town. So I got each of them on the phone. “I got a lousy proposition for you,” I said, “By the time we get off the phone, you’re going to think I’m a lousy businessman. You’re going to think I can’t budget or plan. You’re going to think Chris Voss is a big talker. His first big project ever out of the FBI, he screws it up completely. He doesn’t know how to run an operation. And he might even have lied to me.” And then, once I’d anchored their emotions in a minefield of low expectations, I played on their loss aversion. “Still, I wanted to bring this opportunity to you before I took it to someone else,” I said. Suddenly, their call wasn’t about being cut from $2,000 to $500 but how not to lose $500”.
I am sure you would have faced such situations and thrown your plans away in order to save what you have first
What should you do if you find yourself on the verge of losing it all? Always have moves planned.
Planning with balls of brass
I know that on the surface the solution might look pretty straightforward and borderline lame. “Have a plan”. But there’s just one problem: Humans are not actually very good at assessing risk — especially their own risk. Our optimistic bias and a false sense of control lead us to take things for granted and take down our guard. This solution to this problem is summarized extremely well by Robert Greene in his book 48 laws of power -
Nothing should catch you by surprise because you are constantly imagining problems before they arise. Instead of spending your time dreaming of your plan's happy ending, you must work on calculating every possible permutation and pitfall that might emerge in it. The further you see, the more steps ahead you plan, die more powerful you become.
I am well aware of the flake “having a Plan B or an alternate” receives. “Oh, only losers have it because they are not confident enough”. “Plan B distracts you from your A-game”. Bullcrap! Situations are always much more complex to deal it all with having one plan. If you do not have anything to fall back, people will sense it and pounce on your fears when comes the opportunity, just like Mu Sigma did with their offer.
Adapting to a different plan is also highly dependent on how hungry and fearless you are. This is exactly where winners shine out.
Kanye’s hunger: From -$53M to an annual income of $150M
I recently came across this example that shows the power of holding your ground and keep gunning for more from Kanye West’s failed negotiation with Nike. Kanye wanted royalty on the sales of his Yeezy shoe brand and Nike practically told him to piss off. This is what happened:
Nike said no, pointing to the fact that Michael Jordan was the only athlete getting a royalty. Instead, they offered to put a small percentage towards a charity of his choice. This time, Kanye declined.
Kanye left a $170 billion global brand for the unknown in 2013. 3 years later Kanye signed an unprecedented deal: a 15% royalty on wholesale and is a billionaire today. All of this happened because of his hunger to create an iconic Air Jordan like brand and more importantly maintain 100% ownership. He was not someone who will get bullied so easily.
In conclusion
Do more thought experiments on what you will do if everything you have today goes down. Don't give others any chance. Push back, have moves planned in advance, know your leverage, counter fearlessly, do whatever it takes to stay steady at the bargaining table. After all -
“No deal is better than a bad deal” - Never Split the Difference
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