Kwame Christian: Finding Confidence in Conflict Through Better Negotiation

Speaker A: Foreign.

Speaker B: Hello, and welcome to the Enterprising Investor, the flagship investment podcast for CFA Institute. I'm Mike Wahlberg and I'm joined today by Kwame Christian, the founder and CEO of the American Negotiation Institute and author of the book Finding Confidence in Conflict. At the institute, Kwame trains organizations and professionals in negotiation, conflict management and communication. Today he's going to help us have more honest, assertive conversations to figure out how to disagree without alienating people and in doing so, earn both admiration and importantly, respect in the process. It's a tall order, but I think his experience as an attorney and mediator and time hosting the popular Negotiate Anything podcast, which I understand has been downloaded more than 12 million times across 180 countries, I think he's up to it. This skill set, I think, is a particularly important one for analysts wanting to challenge ideas and disagree respectfully. One of the most important elements of a high functioning fund management team. I look forward to our chat about what he's learned consulting and writing on the topic. So welcome to the show, Kwame.

Speaker A: Mike, thanks for having me.

Speaker B: So, Kwame, I'm always curious how people end up as negotiators. I instantly have a very wrong kind of 1980s cop show hostage scene in my head whenever I hear that term. How did you end up in this line of work?

Speaker A: So it's, uh, really interesting to see how everybody gets to this space because everybody has a different way of entering the space. This might surprise you. Not many people will grow up saying, you know what? I want to be a negotiation expert when I grow up. So for me, I got into this because I was actually profoundly bad at having tough conversations. I spent most of my life being a people pleaser and I studied psychology and learned how to treat my fear of difficult conversations as a phobia so I could overcome that, stand up for myself and have tough conversations. Then when I was studying law and getting my master's of public policy, that's when I learned about negotiation as an actual peer reviewed, tested approach for how to systematically have these tough conversations. And so the law school, grad school, that put the strategy on it, that gave me the tactics, but the psychological background gave me the confidence. And so now when I teach as the leader of the American Negotiation Institute, you see both of those coming through. You see the, the tactical excellence, like the strategic approach, but then you also see the, the psychology behind it. Because I recognize that people can get m a lot more confidence when they can learn that confidence is a skill and they can build that in themselves. But also when they can understand psychologically what's happening beneath the surface. So you're not just understanding the tactic itself, but why that tactic works.

Speaker B: Yeah, I found that interesting, that it's. That that's a thread throughout your work is this idea of. Of confidence. Because can you talk a bit more about that and what role that plays in being able to position yourself better or even just be better understood? Yeah.

Speaker A: And this is something that I recognize, Mike, uh, because when it comes to negotiation and communication more broadly, a lot of times what ends up happening is in thought leadership. We're giving recipes to people who are afraid to get in the kitchen. So essentially, people can understand cognitively what it is that they're required to do, but they can't understand psychologically why they can't do it when it matters most. So you have to have both. You have to have the mindset, but you also have to have the skill set. It has to be both of those things in tandem. Um, because otherwise you'll find yourself knowing what to say but not saying it. And so think about this. Think about a situation where you've had a tough conversation and you just bombed. It did not go well. Everything that you should have done, you didn't do, and vice versa. So then afterwards, you're at home, you're sulking, you're taking a shower, and then you say, oh, man, I should have said that thing. I call those shower comebacks.

Speaker B: Yeah.

Speaker A: And so it's. It's not the issue. The issue isn't you not knowing what to say is that you don't have what it takes to say it in the moment. And so when you can understand that psychology and start to deconstruct your own personal barriers now, you're going to find a way to actually step up when it matters most.

Speaker B: Yeah. Because I think most people have found themselves in that situation. Right. You're in a cocktail party and somebody's ranting about something, and you're just like, I don't agree with this guy at all. But is it worth it to disagree with him or, you know, or do I really want to get into it, or do I want to offend him somehow by disagreeing with him?

Speaker A: Yeah.

Speaker B: So it's.

Speaker A: It's.

Speaker B: Yeah, that. That's a tough one. So you had a lot of good examples in your book. Uh, which is something I really liked about it. Uh, one of the examples you. You raised was around a client of yours who struggled to ask for a raise, which is, uh, again, this is sort of advocating for yourself and Knowing what. What you want and why you want it. But you have this sort of cognitive dissonance in that struggle. Can you talk us through that example? Because I think that one is really informative and useful for anybody listening to this podcast, whether you're in finance or not.

Speaker A: Yeah. And here's the thing. Just let's remember this. You don't get what you deserve out of life. You get what you negotiate. In a perfect world, hey, there's no need for self advocacy, because people just see you and appreciate you for the value that you inherently bring. But that's just not the world that we live in. And so there could be. There are lots of situations where you have people who are working for organizations. They might be in a role of advocacy where they can advocate for the organization really well, but they still struggle to advocate for themselves. There's some disconnect that holds them back. Sometimes it's a situation where they don't feel like they should. So think about it. We, a lot of us have been raised with the mentality of your work should speak for itself. But that's often not the case, because a lot of times what's really interesting is that the people who cause the most problems get the most attention, and the people who do their jobs quietly get forgotten.

Speaker B: Uh, yeah. Squeaky wheel, right?

Speaker A: Exactly. If there's a problem, I'll let you know, but if there's not a problem, I won't say anything. And so we have to advocate for ourselves. So one of the best things we can do in a lot of these situations, if you're struggling to advocate for yourself, is don't think of yourself as yourself. Think of yourself as your own best friend. Uh, if your own best friend was in this position, what would you say? A lot of times it's easy for us to hype other people up and say, hey, Mike, this is why you should. You deserve this. You should say that. And we could see it very clearly for others, but we don't see it for ourselves. So kind of stepping outside can help to give us that confidence. But then also, when it comes to the art of negotiating for your salary, a lot of times the challenge is that we start the process too late. So when you say, okay, you know what, forget it. I'm. I'm letting my boss know today. You probably should have started that process three to six months ago. You started, should have started laying the, the foundation, asking about their perspective on your performance, gathering information to see how they see you on understanding what it takes to be promotional material and building your case over a series of months, then they will give you the information that you need to make your case down the road. So you're gathering that information and then when it's time to make that ask, you can make it with precision based on what it is that you know that the person actually wants from you.

Speaker B: Yeah. And I guess that process of doing it over time plants the seeds over time and forces your boss really to think about you as a person that, that they should be thinking about in a more senior role or at a higher pay rate or whatever. Right. They're like, you're taking the bull by the horns. I should consider you more my equal than my. Than my direct report, for example, 100%.

Speaker A: Because a lot of times we struggle in these conversations because we try to accomplish a psychological impossibility. It's not an issue of not having the skills for the moment, but not breaking the moment into a series of smaller moments. Because when I think about some of these bigger requests that we might be considering, I consider it through the lens, persuasive weight. So think about this. So we've all made the mistake of being roped into helping a friend move with this, where it's like, oh my

Speaker B: gosh, pizza and beer doesn't cut it anymore, Kwame.

Speaker A: Those days are over. And so we might have that daunting task of going into a room and seeing all of these, let's say, 30 different items. If you try to take 30 items at one time, it's probably impossible. But if you break that up into a series of trips now, it's doable. And so we want to do the same thing with our negotiations. If it's a big thing that we're asking for, we should break it up into multiple conversations called micro negotiations. And now we move forward incrementally and set it up so that the, the final conversation is, is not carrying so much weight. It's almost like a foregone conclusion. You've done such a good job of laying your case down through, over time and building upon it that yes is the obvious answer.

Speaker B: And oftentimes you're doing yourself a favor by doing your boss a favor. Because sometimes you're giving them the ammunition they need to go up the rung to advocate on your behalf.

Speaker A: Yes, that's big.

Speaker B: So, uh, maybe one thing we could do is you lay out a great framework in the book and elsewhere in your writings and your speaking, what you call the compassionate curiosity framework, a three step process. Maybe talk us through a little bit of what that entails. And then maybe we can get into some examples after. Perfect.

Speaker A: Yeah. So let's lay the foundation with two simple quotes. Quote number one, Leonardo da Vinci, he said, simplicity is the ultimate sophistication. So I wanted to make this as simple as possible without making it simplistic. So that's part of the process. It took a long time to get it this simple. And then the next one is Bruce Lee. He said, I don't fear the man who knows 10,000 kicks. I fear the man who has practiced one kick 10,000 times. And compassionate curiosity is going to be your compassionate, nonviolent kick that you will be using in these conversations. So it's never a question of whether or not it applies, it's just a question of how. So at home with my wife and kids, I use this as a lawyer. I use it mediator, same as, uh, a leader in my company. It's the same thing. So step number one is acknowledge and validate the emotions. If we see an emotional challenge in the room, what we're going to do is we're going to stop and we're going to focus on addressing that emotionality to lower the emotional temperature so we can have a higher level conversation. So as soon as you see emotions, you know, you're in step one, acknowledging and validating those emotions.

Speaker B: What does that look like exactly, Kwame? Is that like, it looks to me like you are upset or is it, you know, do you ask a question, open ended question, or what's the best way to get at that without triggering people, for example?

Speaker A: Great question. So here are the anchor phrases that I like to use. It sounds like it seems like, or I can tell that. And then I'm going to provide an emotional label. And this is an example of where understanding this psychology helps a lot too. So when people are very emotional, their amygdala is triggered, the limbic system is triggered. But then let's juxtapose this brain structure, the limbic system and the amygdala to the frontal lobe. So this is where we have the, our highest level thinking, logical reasoning, emotion management, executive function that's in the frontal lobe. But there's an antagonistic relationship between these structures. So if somebody is very emotional, they're not thinking clearly and vice versa. So what we want to do is use an emotional label and provide that to the other side. Because the part of the brain, brain that either accepts or rejects the emotional label is actually located in the frontal lobe. So this is a psychological trick to activate the frontal lobe. So let's say we're talking to somebody and we're running through some numbers and we're seeing there's some friction as we're going through the numbers. You say, you might say, hey, um, I might be off on this, but it seems like this is a little bit frustrating for you. Am I getting that right? Frustration is a pretty safe bet in a lot of these cases. Um, and then you sprinkle in your own authenticity. So it sounds like you and doesn't sound clinical. But what will happen is that you'll provide that emotional label. They'll either say yes or no, but they'll clarify, they'll vent a little bit. So what we'll do here is we'll listen and we'll validate. Not agreeing, not endorsing, but just understanding that we can see how they got to this conclusion, whether or not we agree. So the person might say, yeah, I mean these numbers, they just don't make sense to me. I don't understand how we got from here to here. And it is really bothering me. Okay, I can understand that. And so as we go through that process, we're going to notice that they're going to calm down slowly. And then once we get to a point where it seems like we are at the point where we could have higher level conversation, that's when we'll transition to step number two.

Speaker B: Okay, perfect. All right, what's up next?

Speaker A: And so then step number two is getting curious with compassion. So this is asking an open ended question with a, uh, compassionate tone. And the goal here is to gather information, um, build rapport, demonstrate empathy, and just in general gain our understanding while at the same time building trust. So negotiation is an information game. The more information I have, the better I'm going to be when it comes to solving this problem. So I'm going to gather as much information as possible while following the 70:30 rule where I'm actually trying to focus on giving the other person the opportunity to speak 70% of the time, where I'm only speaking 30% of the time. So I'm gathering information and understanding the situation from their perspective because the data that they provide, that will be the building block of persuasion going forward.

Speaker B: So using, using their own facts to help convince them, uh, that they support your view in some way.

Speaker A: Exactly. And, and let me, and for the sake of the audience, I will over exaggerate that. So Mike, you said we're using the same facts and we are also using the same facts. Notice aggressive air quotes.

Speaker B: Air quotes. We've got air Quotes on for those who can't see it. Yeah.

Speaker A: Right. And so what I'm saying is we are trying to get their perspective, not only what is true, but what is true to them. And then what we're gonna do is we're gonna use that in step number three, which is using joint problem solving, where we're working with them, not against them, to solve the problem. So it's not me versus you. It's you and me versus the problem. So I'm gonna refer back to the things that you mentioned in the previous section. So I'm gonna say, hey, based on what you're telling me, it sounds like your goal is this and that and this. And the reason why you want to accomplish those things are, uh, for these reasons. Do I have that right? Okay. So based on that, what I think is we should do is we should do this because it solves all of those problems and avoids some of those risks that you described. And so what we're doing here at this point is we're using what I call empathetic persuasion versus egocentric persuasion. With egocentric persuasion, what we do is we think about the things that we believe and the reasons why we believe those things, and we regurgitate those same talking points to the other side. Because, of course, everybody thinks the exact same way we do. But instead, what we're going to do is we're going to take the time to download this information and persuade them on their terms. Just because we're speaking English does not mean we are speaking the same language. So the way I persuade somebody on the same topic might sound, um, very differently than the way I persuade somebody else on the exact same topic. So we're molding our persuasive strategy around the person who's in front of us.

Speaker B: And I guess it seems like the goal of that, then, is to get to a point at the end where nobody really feels like they got done in the. In the negotiation that both sides feel like they won. I know there's an old adage that if both sides feels like they lost, that it was a good negotiation. But I feel I prefer the positive spin on that.

Speaker A: Yes, me too. And here's the thing about some of those adages, because it's not that they're wrong a lot of times, it's just that they're incomplete. Because if we have the belief where, for example, a good negotiation is where both sides feel equally disappointed, okay, if that's the target, then that's exactly where we're going to end up, right? Both sides equally disappointed. Um, I don't know about you, but I'd like both sides to be equally delighted. If that's an option. Let's move toward it.

Speaker B: Sure.

Speaker A: You know, so I recognize that there are various ways that these things can end, but if we just stay myopically focused on saying, okay, both sides need to be disappointed, then we're necessitating the process that will lead us to that outcome. And it would be very unlikely for us to find delight when we're steering toward mutual disappointment in investing.

Speaker B: It's, it's. We always say it's kind of part science, part art. And the art is really understanding, dreaming a little bit about what a stock can do, but also trying to get in. In the minds of the other investors and understanding why a stock is priced where it is. And often, you know, you're looking for people to be making psychological mistakes. Basically, you've got all the biases that people get tied up in. In that, um, what's the biggest psychological mistake people make in conflict in your.

Speaker A: In your experience, assuming that they are incapable of mistakes. So we could go into this. Think about this. So we go into this saying, you know what? People are illogical. I agree. People are irrational. I agree. People often base their beliefs on things that are illusory. I believe that, too. Okay, great. And it's always them. It's never me, you know, And I think back, one of the things that I really appreciated about my time being a media mediator is that it allowed me to really map the anatomy of conflict. And one of my favorite things to see was after I got the trust of the people who are participants, I got to talk to them separately in private. So they would be really vulnerable with me. And sometimes I would talk to the plaintiff, and the plaintiff would go on their. Their long story about the, uh, the situation. And then they would end it like this. And the other side, they're just crazy. They're irrational. I'm like, oh, this is going to be good. And then I go to the other side, and they tell this story that is vastly different from the other side. And they ended how. And they're just. They're just crazy.

Speaker B: They're crazy. Yeah.

Speaker A: Right. And so one of the.

Speaker B: Did you do family law? You didn't do family law?

Speaker A: I stayed clear of that. I'm a brave man, but I'm not that brave. And one of the counterintuitive things about persuasion is that one of the most persuasive things you can do is be appropriately persuadable. So here's what I mean. So if I make a good point, that should shift your perspective. I want you to acknowledge the good point and shift your perspective. So when the other side makes a good point, that should shift my perspective. What do I do? I take the moment and acknowledge that perspective and shift what I believe. Because a lot of times it's not necessarily that what they're suggesting is detrimental to me, but with the right mindset, it could be additive and then we can collaboratively create a better outcome together. Now that's not to be Pollyannish. Sometimes it is a zero sum game. That's real and we have to hold our ground. Those are real. But at the same time, you could still acknowledge the point and say, hey, but I have a fiduciary obligation to my client, so you're breaking up a good point. But I can't make an adjustment. And that's a fair point to make too. But when you can acknowledge, hey, there are going to be times where I am off base and I'm willing to be self aware enough and humble enough to make that adjustment. What we are doing is that we're not just allowing them to score points. What we're doing is we are demonstrating conversational leadership in this interaction where I'm saying, hey, listen, you're intelligent and you have value. You made a good point and I adjusted. I'm intelligent. I have value too. I'm going to make a couple good points coming down the pike. I expect you to do the same thing. And so we create this dynamic of, uh, mutual respect and psychological safety where now they can make those adjustments instead of coming up with this false bravado and just holding their position for the sake of holding their position.

Speaker B: That's, that's, that's great advice. And I, it would be great if, uh, as in this sort of very polarized environment more generally that we're all living in, um, all around the world these days, left, uh, and right. It'd be great if folks could, could take some of that advice and learn, uh, to get off of their strongly held positions either on the left or on the right. Um, so I, I wanted to come back to another example here, Kwame, because like I said, I really did enjoy the way that you, you wrote this through your book. You talk about a client who was working with a friend and was afraid of pushing back on, on Price, uh, because of the friendship. And it doesn't necessarily need to be. The friendship isn't necessarily the important part. I think in this example, as as you recall, it didn't end well for them. I'm curious, what did this tell you about the costs of avoiding tough conversations? Yeah, I'll leave that team.

Speaker A: Yeah. Well, think about it this way. A lot of times when we avoid conversations, we say, okay, I can see the risk of having this conversation. They might respond in this way. It might have this negative consequence, and those are legitimate. I think if we brush those aside and say it's illegitimate, then we lose a lot of credibility here. Those are legitimate things. But what often happens is that we, uh, discount the dissatisfaction that we're having with the present. So we're saying there is a hypothetical potential loss down the road, and I'm not willing to risk that. But there is a guaranteed loss happening right now, and I'm willing to accept that. If we at least have the conversation, we have the possibility of improving the situation. That's the first thing. The second thing is when it comes to our ability to navigate the conversation, we have to have confidence in our resilience and then hopefully leveling it up to anti fragility and our ability to make adjustments after the situation. Everybody who's listening to this podcast has something in common, and that means that they have a 100% survival rate of all of life's challenges. So no matter what anybody, we have that in common. Right? And so when you think about everything that is bad, bad that has happened in your life, and then you think about a conversation that might not go as well as we would like, of all of the things that we have overcome, that is probably the least of these, right? And then when it comes to our resilience, resilience is, uh, the belief that we can go through a difficult situation, survive it, and at least not necessarily be worse. But anti fragility is a little bit better because it's saying, okay, when these difficult times happen, it actually makes me better as a result of the difficulty that I went through. So I go through these conversations with an anti fragile mindset where I say, my goal in this conversation, I have two of them. Goal number one is to actually use this conversation as an opportunity to improve my skills. If I can do that, if I can maintain my form and do the very best that I can under the circumstances, then that puts me in a better position for the next difficult conversation I have, because as I'm growing in my career, these conversations will also grow in consequence. So the conversation I have today will not be as important as a conversation I have tomorrow, next week, next month, next year. So I want to focus on that. That's my primary goal. Now, secondary goal in every conversation is the explicit outcome that I'm steering toward. So if it's a collaboration with a friend, like in this situation, pushing back on price, having a conversation about the details, the terms, yes, there's an outcome I'm driving toward, but I also recognize that the other side has agency and autonomy and I cannot control their behavior, can't control their reaction or whether or not the deal gets done. I can just control my stuff. But I do know that if I handle my primary goal and do the very best that I can and use this as a tool of improvement, then I'm going to position myself really well for the secondary goal. And then the last thing too is that it's okay to be afraid. Just make sure you're afraid of the right thing. So I've worked really hard to shift my mindset to shift from the fear of failure to the fear of regret. So I'm not afraid, as afraid of failing in the moment as I am of regretting, not trying to. So for me, I have this deathbed mentality where I say, when I look back at the end of my life at this very moment, what is the decision I would have hoped that I made? And usually when you look at the studies around regret, we regret the things that we didn't do more so than the things that we did. And so I know all of these, these uh, these psychological principles. So I say, listen, when I feel that fear now, I say, okay, now I need to move through it just on principle. That's the, that is the shift in my mentality. So I don'. Run from fear anymore. I hunt it. So I'm saying, oh, there's a, I'm afraid of that thing. Well, okay, guess we're gonna have to jump through it. Because I know the best things in life are on the other side of difficult conversations. And we become the people that we're supposed to be by going through adversity and not running from it.

Speaker B: Yeah, because that's because you're effectively conditioning a muscle when you're, when you do this every time you practice it. So I'm curious, like, we can't boil down a life's work into a single question here, but what habits can you suggest can help create long term confidence? And especially in, uh, a lot of our listeners are in high pressure environments. So creating that confidence through this practice and specifically working in high pressure environments.

Speaker A: Yeah, so here's the thing. Uh, when you think about confidence, it's Very helpful to go to sports psychology and this really honestly for high performing and high achieving folks. Whatever skill set we're talking about, it should be undergirded with an understanding of sports, sports psychology. Because that is the field of psychology optimized for performance, especially under pressure. And so for us, here's one way to think about it. When it comes to the term being clutch, we understand what that means in a sports context. A lot of times we say that people who are clutch rise to the moment under pressure, they actually get better. But when they did studies on what it meant to actually be clutch, they found something interesting. They found that being clutch is a myth. And for me as a sports fan, I'm like, this is psychological gaslighting. What are you talking about? I watch the sports, I've seen it. So this is what they found. They found that it's not a situation where people get better under pressure. What actually happens is that everybody gets worse.

Speaker B: They hold up, uh, they stay the same.

Speaker A: And so when it comes to this, when it comes to being a clutch communicator, all that comes down to is your ability to manage your emotions. That's really it. It's not a situation where you don't have the skills to do what it takes. It's that you don't have the emotion management that allows you to do what it takes under pressure with consistency. So the very best thing you can do is practice managing your emotions. So become self aware and recognize when emotionality begins. So I call this the spark theory of emotion management. Think of, uh, if we're outside in a forest and a spark falls on the ground. If I see the spark fall on the ground and I step on it immediately, we don't have any problems. There's no issue. But uh, if that spark falls on the ground and it catches fire and I don't notice for a few minutes or an hour or so, now we have a significant issue. Emotions operate in much the same way. The faster you can recognize that there is a little flicker of emotion, the faster you can put a cap on it and control it and begin to manage it. So just day to day, just begin to notice it. Okay, I'm driving. It's a 25 mile per hour zone, which everybody knows that it is at least 29 miles per hour by custom.

Speaker B: Yeah, you get the 10 to 15%. Yeah, no problem.

Speaker A: Yeah, yeah. And now this person's over here going 22 miles per hour. Uh oh, I felt that. I felt that emotion. This is the universe providing me with an Opportunity to become a better negotiator by managing my emotions. I've got two little kids, they give me lots of opportunities to practice emotion management. And so once you think about the world as a training ground for your emotional resilience and stability, now once a pressure moment comes up in the real time, in real world situations when you're actually having something on the line, you're well practiced because you're not trying to bring those that emotional intelligence to the fore. For the first time in months, you've been doing it as a habit every single day.

Speaker B: It's funny you should use driving as that, ah, as that example. I used to have to drive into work not too long, but half an hour. But that was always my mental barometer for stress. If I'm shouting at traffic that it's okay, it's time to take a breather here. Time to put on a, uh, meditation tape or something. Time to chill out a bit. Kwame, this has been an awesome conversation. We're coming towards the end of it. Unfortunately here I do have a wrap up question, a two parter for you that I'd like to put to you. And uh, that's. What was your first job? Professional job. And if you could go back and take yourself for coffee on your first day, what key piece of advice would you offer yourself?

Speaker A: I was a telemarketer.

Speaker B: Oh, wow.

Speaker A: Yeah, I was a telemarketer. I learned a lot. I learned a lot at that time.

Speaker B: So that was the first course in psychology, I guess.

Speaker A: Seriously, it really was. And it's funny because I never really thought about that job through the lens of negotiation. But truly I was negotiating at that time. And if I could talk, I could go back and talk to myself at that time, what would I say? Uh, you know, there's the hang in there kid type of mentality. I think what I would tell myself is this. Listen, in about a couple of months, one day you're going to get fed up and you're going to write a note and that's how you're going to quit. That is not how you quit a job. Uh, you're going to go to your manager and tell them, talk to him face to face and tell them face to face. That's what you're going to do. So of all of the things that, uh, I would tell myself it would be that. Don't avoid that conversation.

Speaker B: Amazing. Great advice. I have been speaking today with Kwame Christian, founder and CEO of the American Negotiation Institute, host of the Negotiate Anything podcast and author of finding confidence in conflict. Thanks, Kwame. This has been a great chat.

Speaker A: Thank you very much. Pleasure being here.

Speaker B: I'm, um, Mike Wahlberg, and this is

Speaker A: me, the enterprising investor m.