The Devil You Know

Better the devil you know than the devil you don't'.

— Irish Proverb

How often are you flummoxed by a prospect who decides to do nothing, or stick with an incumbent supplier it hates?

Princeton psychology professor Daniel Kahneman won a Nobel Prize in Economics for explaining why clients do this.

Kahneman’s research challenged conventional economic theory, proving people make irrational decisions all the time.

A key basis for those decisions is "risk aversion."

People are more motivated to avoid a loss than to acquire a gain. In fact, the perceived loss has twice the influence on the decision the equivalent gain has.

How do you counteract risk aversion?

In the way you explain the potential loss.

You need to do careful research to pinpoint the loss (generic claims never work, and cheesy fear-mongering backfires); and then show the prospect it will avoid that loss by choosing you.

Here are three things you should do:

• Provide your prospect insight. A financial advisor had trouble selling doctors deferred compensation plans. It used a white paper, Healthcare Post-Obamacare, to get meetings with physician groups. The white paper was chock full of gloomy news and predictions of losses, many of which had little to do with deferred compensation plans; but the data motivated doctors to meet with the advisor and discuss the firm's products.
  
  
• Prove over and over you produce results. The top Realtor in my home town mails homeowners postcards every week. Each one boasts of the rapid speed and ginormous sale price at which she just sold a home. If I fear getting a below-market price for my home, I might remain in it. Or I might just give her a call.
  
  
• Make your case. Case studies that emphasize how you helped clients dodge disasters demonstrate you can do the same for them. Software provider Minitab proved this in a case study about Ford Motor Company's use of its product. Ford's launch of Fiesta was jeopardized when the automaker found ugly brush marks on every vehicle's carpet. Minitab helped Ford avert showroom nightmares by enabling it to evaluate the results of 34 test fixes in 12 days, and choose the right one.

Boots

Here's to the bootstrappers, those entrepreneurs who make do on a shoestring. They sustain the American Dream.

Here's to the bootleggers, the copycats who ride the backs of first-movers and make them look good.

And here's to the bootlickers, without whose undying service there'd be no room for bootstrapping or bootlegging.

It doesn't much matter which pair you wear, but only that others will ask, "Who'll fill her boots when she's gone?"

All Together Now

In his new book, Pre-Suasion, “Godfather of influence" Robert Cialdini has added a 7th principle of persuasion to the 6 he described 40 years ago in Influence.

He calls it unity.

Unity is less a principle of persuasion and more one of "pre-suasion."

Pre-suasion refers to the means to get agreement with a message before it's ever sent.

Unity means shared identity.

Belonging to a family, a race, a neighborhood, a club, a party, a polity, or some other group automatically predisposes you to agreeing with messages sent by other members.

Cialdini illustrates unity's persuasive power by citing Warren Buffet’s 2014 shareholder letter—considered "the best annual letter ever."

Content and copywriters, take heed!

Buffet guarantees his market predictions are accepted by readers by including this simple opening paragraph:

Now let’s take a look at the road ahead. Bear in mind that if I had attempted 50 years ago to gauge what was coming, certain of my predictions would have been far off the mark. With that warning, I will tell you what I would say to my family today if they asked me about Berkshire’s future.

Grace under Pressure

This wallpaper is dreadful, one of us will have to go.

— Oscar Wilde, last words on his deathbed

Child therapists call the ability to avoid meltdowns when under pressure the executive function.

Ironically, some executives don't function under pressure—not well, at least.

You'll recall the Korean Air Lines executive who forced her plane back to the gate and kicked off the head steward after she was served macadamias in a bag, rather than on a plate.

Business isn’t always about growth, victories and celebrations over champagne.

Stuff happens.

Leaders unable to show grace under pressure exhibit the traits of the executive-type Tron Jordheim calls the "Spoiled Brat."

The Spoiled Brat thrives on barking orders and berating workers, caring only about productivity as she defines it. She mistakes herself for another executive-type, the "General," who thrives on defining missions, outwitting competitors, and "taking the next hill." But apply a little pressure and all hell breaks loose.

"The General will remain composed and keep the battle plan in mind even under pressure," Jorhheim says. "When under pressure, the Spoiled Brat overreacts and lashes out until someone offers a pacifier. The advantage the Spoiled Brat has is that people do react quickly and try to make this type of executive happy to avoid those tantrums."

Spoiled Brats are so narcissistic they forget they have an audience—workers and peers who expect them to display grace under pressure—calm, grit, insight, honesty, resilience, self-control and dignity. (Oscar Wilde's example of grace under pressure may be the ultimate one.)

If your management team includes executives who think eating nuts from a bag is roughing it—and who crack under the pressure—it's time to reorganize.

When There's Only Make

Anything worth doing is worth doing slowly.

– Mae West

It took J.D. Salinger 10 years to write The Catcher in the Rye.

It took John Roebling 10 years to build the Brooklyn Bridge.

It took Leonard Cohen 10 years to compose "Anthem."

It took Julia Child 10 years to compile Mastering the Art of French Cooking.

It took James Cameron 10 years to film Avatar.

How long is your patience, your endurance, your long term?

Can you sustain your passion long enough to make something that may take years to complete?

Or are you satisfied ceaselessly prototyping?

"Your long term is not the sum of your short terms," Seth Godin says.