Negativity bias is a cognitive bias that explains why negative events or feelings typically have a more significant impact on our psychological state than positive events or feelings, even when they are of equal proportion. In this episode, we look at how this bias can help or hurt our decision-making in our careers, investing, and leading people.
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Do You Suffer From Negativity Bias?
Frankie, if you had to add up all of your interactions with me on a weekly basis, whether they’re text messages, phone calls or our Wednesday get-togethers, what would you say the ratio was of positive experiences with me to negative experiences? If you had to add them all up, what would that ratio be of positive to negative interactions?
Carl and I were having a conversation. I’m like, “Ian called me out of the blue and checking in on me. He’s worried about me because of the economy and I have to make some choices. It’s hard.” She goes, “That was very nice. I’m sure he’ll be nice when you get on the show with him on Wednesday.” I go, “No. That could be gone in moments. That is a fleeting moment in time.”
I filled my quota of puffing you. Twenty minutes later, I sent out a text talking about how badly you suck at Fantasy to the boys.
I score the most points than anyone in eight years in the league. I missed. Ian won again.
I did lead with myself, but I did get into you right away. I got to let everyone know, it was the greatest weekly performance of Fantasy football in history.
That’s after we congratulate you. I honestly think I was a much nicer person before I met you.
I taught you how to be a real ass.
Ian put this agenda together. The agenda is going to be on negativity bias. He was like, “Frankie, this took me two hours. Don’t say anything about it. I don’t know if I can stand it.”
I don’t think I could handle the negative feedback now. I’ve got enough of it.
There’s something down below that we’ll get to eventually, but this is a funny thing to lead with. Why don’t you explain negativity bias and I’ll tell you a funny story to start?
The regulars of this show know that I love psychology. I love the different biases that we suffer from with negativity bias. This should be one of the easiest ones for people to grasp. For humans, it’s a cognitive bias of ours that negative events or negative feelings typically have a more significant impact on our psychological state than positive feelings or positive events, even if the two are of equal proportion. We’re devastated if we get even just a little bit of criticism, but we might be completely unmoved by a shower of praise.
The best example I’ll give of this to start off is a story about Ronald Reagan at his peak in the mid-’80s. Reagan was in New York. He had a little rally. All these people came. You remember the mid-‘80s. Everyone loved Reagan. He just had a landslide. It was maybe one of the greatest elections in history in ’84 where he destroyed it. He got 70% of the vote. He was at the peak of his popularity.
The crowd was rambunctious. They were chanting his name. They were cheering. They were into every word. He gets into his limo and he is talking to his chief of staff. He was down. His chief of staff was like, “What’s going on, boss? That was amazing. Your speech was great.” He was like, “There was a guy in the front row that gave me the middle finger at the end of the speech. I looked him right in the eyes and I could see that he hated me.” It ruined Reagan’s day.
Here’s a crowd of thousands of people in New York City and you’re the most popular president in decades, but all he could think about is the one dude that gave him the middle finger. That is the leader of the free world. Who knows who this troll was, but that one dope in the front row ruined Ronnie’s day. I’m sure he bounced back quickly.
That’s a good example of what negativity bias is and why humans are so impacted. Think of social media or anything. You could have 100 nice comments and one person is like, “You’re an idiot,” and it will ruin your day. That’s the way we’re wired. We’re much more influenced by the negative than we are by the positive.
There’s not a lot to add there. Think about all the things you worry about. You worry about the losses. You don’t worry about the wins. Tom Brady has won two Super Bowls. The only things he ever talks about with Super Bowls are the two he has lost to the Giants. That’s it. Bill Belichick is the same way. He’s won a bunch of Super Bowls and he talks about the two they lost more than I’ve ever heard him talk about the ‘60s one.
As a positive member of society, that is how it works. If you’re some kind of egotist, perhaps you can focus more on the other side of it. That’s how we’re wired. It’s to think about this. What is interesting is this. We’re all predisposed to worry more about failures than successes. How do you use the failures to propel you forward and not tear you down? How do you turn those into positive experiences?
We were having a hard conversation in the office. Economy sucks. We’re letting some people go. What I talked about was I screwed a deal up. I could have gotten a deal done and I missed it. I talked to everybody on staff about how I missed it. Someone came up to me afterward and said, “That made you sound human because you missed something.” I’m pretty good at this job. It’s a company I built around what I’m good at. Saying it that way is like, “I screwed this one up too. You’re going to screw them up, but why don’t we learn from what I screwed up and not make that same mistake and not repeat it?” I’m not going to repeat that mistake myself.
There’s a psychologist by the name of John Gottman. He’s chosen in his career path to study married couples. He studies married couples to see what works, what doesn’t work, what makes a successful marriage, and what ends a marriage prematurely. One exercise he has all couples do is he writes down all of their everyday interactions. Every time they saw each other and every time they talked on the phone, text messages and everything.
He makes them keep a log of it for a couple of weeks. He asked them, “Simply rate it. Was it a positive experience or was it a negative interaction?” The couples who could only come up with an equal amount of positive and negative, let’s say it’s 50/50 like, “When I bump into you or we talk, it’s positive,” or, “I feel negative when we leave it,” they are three times more likely to separate than the couples who have a higher percentage of positive interactions.
What he found are the marriages that last claim to have 5 positive interactions for every 1 negative interaction. In psychology, this has been deemed the Gottman ratio that predicts marital success but it also predicts success in all relationships. That could be professional relationships and friendships. We tend to gravitate towards people with that we can get a 5:1 ratio of a positive experience versus a negative experience. When that ratio drops, we tend to avoid those types of people and spend less time. I asked Frank if it was a trick question. Frank can’t get enough of me, so that must mean that I am way above the Gottman ratio. I’m in a comfortable green zone because Frank always wants to talk to me and spend more time with me.
We tend to gravitate towards people we can get a 5 to 1 ratio of a positive experience versus a negative experience. Click To Tweet
You are typically a big asshole, but when you’re not, you’re incredible.
The positives are high.
The volume is below 5:1, but the dopamine I get from that one is good.
Negatives are like annoyances that you blow off. That one blowout positive experience you get. That’s the Gottman ratio explained. Where do you see the supply in business in the 5:1 ratio?
We were having a conversation earlier about 360 feedback. My best managers have positive interactions with people most of the time. What you notice when you become an insider in anything is how far off TV and movies are from reality. I’ll give you a great example of the TV not being a reality. You see on television police officers and paramedics running. If you ever see a police officer or a paramedic, they don’t run. Nobody runs. I’ve asked police officers from paramedics why. They’re like, “We’ve seen it 1,000 times. If I run, then I’m out of breath.”
Most things happen in a very calm way. Real professionals are calm. The reason that most professionals are calm is that most of the things they’re doing are thought-through and positive. The interaction that is negative is the rarity. If you have a negative interaction with a person, you eventually get rid of them. If you’re yelling and screaming, you can only do that so often if you have longevity in your job.
What I see in most instances is maybe it isn’t positive, but I would say it’s neutral to positive versus negative. If it isn’t neutral to positive over negative, you’re not going to want to work with that person. That’s how it is in my office. When we come in for an executive meeting, most of the time, we’re getting along. We’re rowing in the same direction. The people who are consistent malcontents are the ones who aren’t here for very long.
Frank mentioned 360. You might not understand what a 360 is. It’s a 360 review. My company conducts these. I’m working with Frank with one of his managers. We may ultimately do it with all of his managers. Frank and I have both been through a 360 review. A 360 review is as simple as this. It’s an anonymous survey that goes to cohorts that you interact with as a peer, cohorts that you interact with as their direct manager, and then your direct managers. That’s either if you have one or multiple. You’re getting feedback from above you laterally and beneath you. Those are the people that you’re tasked with leading.
You ask the same questions with all three. What you’re trying to see is whether there is a discrepancy. Do you rate high with your boss but low with people who report to you? That maybe means you’re a kiss-ass and you’re not authentic. You’re not seen as authentic because you’re a different person up the chain than you are down the chain. Maybe your team loves you and your peers can’t stand you.
I’ve had that in one of my 360 reviews. I didn’t know it was even happening where my team scored me off the charts versus my peers, but then when my peers got the survey, they crushed me. What they were telling me was, “You’ll do anything for your team and you were normally the collateral damage. You normally will bowl your way over us to get what your team is asking for.”
My team loved it. They’re like, “Ian is great. He is a wrecking ball. If we ask him to go do something, he’s a little tornado through Reston. He then leaves and gets us what we want.” All the people in Reston are like, “That son of a bitch. Every time he comes, we know he is going to stomp on us.” It was great feedback for me because I had to completely change the way I was working because they resented me. Ultimately, that was hurting my team in lots of little ways I didn’t see. My region got picked on by these people that felt like they didn’t have any power.
One of the things that Ian said in there earlier that’s part of the conversation was if your boss thinks you’re great but your team doesn’t. Let’s unpack that for a little bit. Maybe you’re skilled at a particular piece of the job. You’re a technical person, but you’re not a great manager. That’s where your boss might give you strong feedback. Your peers might think of it in a way like, “This person doesn’t know how to manage me.” This is the power of the 360.
The other side of it is your peers might look at you like, “This person is an advocate for us,” but then, your bosses or the people on the leadership team with you will tear you down because of the opposite side of that. You empower the people in a way that isn’t helpful for the whole organization. It’s a very powerful tool. I don’t have to be liked constantly. I need to be liked more than I’m not liked because I sign the checks. I’m the boss and I have to make tough decisions in a lot of instances.
I would guess that at work, it’s probably 3 to 5 to 1 for the people who are performing well. For the people who are not performing well, I bet it’s lower because I am on them. I’m harder, tougher, and more critical because they’re not doing the job that they need to do. That manifests in a natural way. There’s something else that’s called the 80/20 rule. It’s 4:1. There are 20% of the people that get stuff done and 80% of the people that don’t. It’s a very similar ratio in society. These things manifest over and over again in different ways with the vast majority happening in a way that’s positive.
I thought of a few things when I heard this Gottman ratio of 5:1 positive and negative experiences. Let’s say you’re a manager. An employee-manager relationship is similar to a marriage. No one is locked into any long-term contracts in American business for the most part unless you’re a professional football player. I can leave whenever I want. I’m a free agent. If I’m only 1:1, think about that. If it was a 1:1 ratio like these married couples that get divorced, I flip a coin whether I’m going to have a positive experience with my boss or not, there’s no way I’m staying there. Think about it. If you have a good experience, you should expect the next one is not going to be good.
With that 5:1, if you’re a manager, you should think hard about, “Every time I interact with someone when we leave, what would they have marked it? Would they have given me a green check mark or a red X?” It’s not about a popularity competition. That’s not what this is. It’s not about being popular. Sometimes, managers have to make decisions that are unpopular.
Frank made some decisions that are clearly not going to be popular with his whole staff. He had to lay some people off. The people that got laid off are probably not happy with those decisions. Some of the people who stayed are probably not happy with those decisions because they’re a little nervous. He has to make those decisions because he runs a business and the economy has changed. You can be diligent in thinking, “How frequently do I interact with my team? When I do, how many of them think, ‘At least he was respectful. He was positive. That was a good interaction even if I didn’t love the decision.’”
I’m going to take this in a slightly different direction. I send an email out from time to time. I don’t send lots of them. What happens is I’ll send it to the construction department or the settlement department and they don’t reply. What I do in my head is I immediately think, “They’re not replying to me so they might not be replying to anybody else either.” I immediately put them into negativity because they’re not getting back to me. If you’re not getting back to the owner of the company, who else are you ignoring?
I’ve called people out on this. I said, “Talk to me about this.” I’ve told them, “I don’t see all of your interactions but I would imagine the interaction with me is replicated through your interactions with others. If you’re not replying to me, am I improperly assuming you’re not replying to anybody else?” People are like, “No. We get back to them.” I’m like, “Why the hell wouldn’t you get back to me?”During the pandemic, no one could go anywhere and spend money on anything. This made trading cards popular again while everyone was stuck in their houses. Click To Tweet
You’re doing yourself a disservice because you’re not telling me or showing me through performance what you’re doing. You’re ignoring me, which causes me to follow up. If you’re doing that, you’re sending me the wrong vibe. I could be the only one feeling that way, but I tend to carry a fairly big wand. If I reach out to you and say, “This is taken care of,” or “I’ve received your email. I am unable to give you a great answer at the moment because I don’t have the facts from these people or this circumstance. I will get back to you on this date and time with a follow-up. I’m on it.”
If you send me that, I feel very different and I’ll also think there’s a halo around you. I’m like, “They’re treating me this way. They do this to everybody else.” There’s inertia that goes in each direction for you. You have to be mindful of that because people you have limited exposure to are making their decisions or judgments on you based on a limited sample set. You might be saying the wrong things to them.
Another thing that I would think about in business is hiring. Frank and I have gone back and forth on passion. I do think it’s important. If I don’t like numbers, spreadsheets, balancing, and tedious mathematical work, I’m going to hate being an accountant. Maybe it pays me or maybe I’m good at it because I’m smart. If all day long, with the 5 tasks I do, every 1 are negative, in my perspective, those tasks that I’m having to do that are negative, I’d rather be doing something else.
I’ll use the example of how I decided I wasn’t going to be an engineer after one internship. I spent three months at a drafting table drafting the same part but in different variations. I drafted all day long with a pencil and my slide ruler. It was quiet work. I wore a short-sleeved button-down shirt with a tie every day and stood on my feet. I was like, “Engineering sucks. I don’t want to do this.”
When you’re hiring, it’s important to look into position fit, which is, “Tell me about when you’re having the most fun at work. What are you doing? What are things that energize you at work? What did you like about your past job? What didn’t you like about your job?” As an employer, you’re trying to understand, “Do they enjoy the type of work I’m going to ask them to do?” If they don’t, they won’t do a great job at it and they won’t be there for long.
We’ve gone through this multiple times. We’ve talked about interview questions, but I’ll talk about them here. One of the first things I say to someone I’m interviewing is this. I like to begin casually. I’m like, “Tell me something about yourself that you’d like to share.” What invariably happens if the answer is great, it’s unique, fun and funny. It’s something like that. It lowers the pressure or it is strategic. It tells me how you do the things that you’re doing in the job in your daily life, or how you incorporate them.
Here is an example. I’ve hired construction people. What they talk about is, “My favorite things to do on the weekends are to build, frame and do different things.” I’ve interviewed people who do that. What you realize pretty much immediately is that this person’s default mechanism is to do the job I’m hiring them for. If you are hiring someone on the accounting side and they talk about how little they like doing paperwork or how they love to be free-spirited, what I hear is that’s probably not the person who I’m going to hire for a role that requires a great amount of detail. These are things that you have to think through when you open your mouth in an interview, or when someone does and you’re listening and taking it in.If you're hiring someone on the accounting side and they talk about how little they like doing paperwork or how they love to be free-spirited, that's probably not the person to hire for a role that requires a great amount of detail. Click To Tweet
It’s like when you’ve been on an unsuccessful diet. You had a nice string of days where you were behaving and keeping your calories low, and then you had a bad night. Let’s say you had a bad night and you ordered some pizza. That pizza led to some pita chips, which led to half a gallon of ice cream. What tends to happen to people when they have one bad day? Do they jump right back on the next day or does that lead to a string of “I failed and it’s over?”
There’s usually a string of them. It’s like, “I had some Oreos.” Instead of going immediately to grilled chicken, you’re like, “I’ll follow that up with pizza.” You tend to compound it, not isolate it.
Did you ever see the documentary on Chris Farley, the comedian from Saturday Night Live?
I don’t think so.
Farley had all kinds of demons. At any given time, he could be going to Alcohol Anonymous, a drug anonymous group, and an overeating group like Weight Watchers. He had problems everywhere. He went to all these groups. He would get in shape. He would lose some weight and get clean, and then he would break down and have a pizza. He would feel shame. He’s like, “I screwed up my diet.”
The pizza would make him sad. He would go drink a twelve-pack beer. The next thing you know, he’s out in the South Side of Chicago looking for crack. It would happen that fast. It would be 170 days since his last drink, drug or bad food, and one pizza would make him feel so bad about himself. That negative event was so powerful. If he was being rational, he’d say, “I went 170 days of discipline and doing everything right,” but that one bad day led to all this stuff. That tends to happen with us because of the negativity bias. We give so much weight to screwing up one thing.
We’re so hard on ourselves. I was going to tell a funny story but I can’t. I’ve had people who deal with these types of things all the time. Here’s the upside of being fat. We’re not fat, but we’re not as skinny as we like to be. Thank God we don’t have the other things that we fall into. For me, pizza leads to ice cream. It stops there. It doesn’t go to black tar heroin. That’s the upside of it for me. It could be worse.
There’s this term called self-love, which makes me want to punch people in the face. It makes me think we’re getting soft as a society. That’s the opposite of what you’re talking about. The negativity bias leads you to all these bad things. I think self-love is an over-correction of it. It’s saying doing things that are right for yourself. How do we turn negatives into positives?
Let’s say you’ve got a goal and you say, “I want to write every day. I’m going to write and publish something every day. I’m going to do it all month.” You go for fourteen days. You do a great job, and then you don’t write one day. You’re down on yourself because you had a goal and you didn’t quite do it. The key is to turn that into, “I wrote 14 out of 16 days. Tomorrow, I’m going to write again.”
Instead of self-love or whatever, just give yourself some grace. Life happens. Things happen. One day shouldn’t completely set you off. It’s the same if you’re a salesperson and you told yourself you were going to prospect every morning all month. You were doing great and then you missed prospecting. The tendency would be to not prospect all next week because you’re down on yourself and you screwed up your goal.
When I was starting in sales, I give so much weight. When you first start in sales and someone says no to you, it is so personal. Can you remember the first person that you wanted to get a sale from and they went with someone else? It’s crushing. You take it personally. You’re like, “They said no to me. I screwed up. I’m not good at this.”Homeownership is a great industry, especially if you rent. But right now, it is a terrible time to buy because interest rates are really high unless you have a 15-year horizon on moving. Click To Tweet
Over time in sales, you get used to it. That’s part of the process. If someone says no to you, that’s like, “My job is to listen that no is a clue. It’s information.” What I had to do from that perspective at least because you hear no so often in sales, the negativity bias would crush me. If I saw any kind of rejection as an actual negative, I had to reframe it.
I had a good mentor that taught me how to do this. He taught me, “You’re not doing your job if you’re not getting people to say no. That tells me you’re asking soft questions. You got to ask hard questions and get people to commit. Get them to say no so you can hear why they haven’t bought yet.” It reframed it to me that when I got a no, I looked at it as I’m doing my job.
I reframed it. It changed my perspective of any no is not a negative. It’s not me being a loser. It’s me being a great salesperson because I got them to tell me why they were saying no. Now I could unpack that no with some questions and then re-attack them with great benefits to overcome whatever it was they said no to. From my experience, the way to deal with negativity bias is sometimes just reframing something that you thought was negative that maybe isn’t, which is saying you have a growth mindset.
That’s great. We should move on to avoiding negatives.
Frankie, what’s the best way to keep yourself from eating Doritos?
Not buy them.
Yeah. Just stop right there. Don’t have Doritos in your house.
My kids love Doritos. There are Doritos in my house. I eat more Doritos with kids than I did before because there were never Doritos in my house. The best way to avoid negative experiences is to not put yourself in situations where things could become negative. You remember your parents used to say, “Nothing good happens after midnight. Nothing good happens after 1:00 AM.” It’s true. Bad stuff happens there.
If the 5:1 ratio applies to general happiness, mathematically, there are only two ways to get to that 5:1 ratio. You can either increase the number of positive interactions that you’re around or decrease the negative interactions. Let’s stay on a diet and exercise. If you’re always screwing up and eating Doritos every day or you keep making the mistake of eating Doritos and it’s a negative experience, you got to go run 5 miles to make up for it. That’s exhausting to always have to pile on 5:1 positives versus the one.
It’s a lot easier to put yourself in situations where you’re not eating the Doritos. Keep them out of your house because you can’t keep piling on more exercise or more work. Trying to add so many more positives is five times harder than getting yourself in a position to not be around negative influences, negative people, and negative situations. How do you stay away from them?
Let’s even take the business. Let’s use this show. If I were to take this whole show, my favorite part of this show is 10:00 to 12:00 on Wednesdays. That’s when you and I hang out. We laugh our asses off. We have a lot of fun. We’re recording. If that’s all I ever had to do, I would do this show until I am 90. It’s a lot of fun. We never run out of shit to talk about. It’s the best.
If you were to ask me what I don’t like about the show, I’ll tell you exactly what I don’t like. I don’t like going back and watching the video, trying to find timestamps with the good clips, and then typing them into a Word doc. I don’t like having to name those marketing clips. I don’t like having to interact back and forth with our editor in Bosnia. I hate going into our Podetize website, writing out the description of the show, and getting Podetize’s website to work. I don’t like doing any of that.
I don’t like having to post on LinkedIn. I don’t like having to worry about whether our show got up on Apple and Spotify. I don’t like all the admin and neither do you. I know that. What do I do about it so I don’t have negative experiences? I want to keep doing the show. I just want less negative experiences. We’re spending a little bit of money. We’re spending $500 a month. We hired a VA. That VA is going to take all of that extra work off of me so all I can do is show up from 10:00 to 12:00 and do the part of this show that both of us enjoy.
There’s another side to that. That’s delegating in a mindful way. We are having hard conversations here because we’re going into the teeth of a deep recession. We have to be great at certain parts of our job. We need to drive revenue. We drive revenue through a multitude of ways, but we have salespeople. What the salespeople need to do is they need to go on appointments, get things under contract, sell them and drive revenue. What percentage of great salespeople are great at paperwork?Figure out where your service is needed in any market and how you can make it indefensible. Click To Tweet
Not good. It’s got to be 20/80 on that one.
You have a couple of people who are good at paperwork. I’m good at paperwork. I don’t like doing it but I’m good at doing it. I would always have great paperwork with my sales staff. What we’re doing is making a bunch of reductions, but we’re adding more admin help. We’re adding an admin. She starts soon. The goal is this. I want my salespeople on sales appointments. I want them in front of customers. I want them to solve problems. I want them to drive revenue. I’m like, “What I want you to do is while you’re there is to quickly call the office and put the stuff in the system.”
Have a second person who is on staff who you’re going to pay to help you do those things so you can get them off your plate immediately and focus on the next thing. That is what a good company does. They get you in the right lane and focus you on that. In times of stress, like we’re going into a recession, it’s critical.
Here’s another one that is worth talking about. When I quit my job in 2009, I had very little revenue coming in like none. I had people who cleaned my house. I had people who mowed my lawn. I should have probably stopped paying people to do those things. I wasn’t making any money. What I did is I kept those disciplines in place. I used that time to work on business efforts and things inside of the business that ultimately, fifteen years later, have paid huge dividends.
You can get distracted and say, “I should dive into this,” or “Go do this.” You have to ask yourself, “Is this my highest and best use?” If it isn’t your highest and best use, especially in a recession and especially when you’re coming out of something, those things look a lot more like distractions than a way to pole vault yourself forward. That’s something that Ian and I are pretty good at.
Ian put in the agenda of what are the things that I hate. I hate accounting. I hate balancing a checkbook. I hate writing checks. I don’t mind signing them, but I don’t do any of those things. When I was big enough in the business to do my first hire, my first hire was the bookkeeper. I barely got a C in accounting. I’m bad at it and I hate it. Those are the things that I hired. How does that make itself manifest forward?
I remember calling Ian and telling this story. I had a bookkeeper who worked with me at the time, and she would cut a check every time it came in. It would be sitting on my chair. I was working in the field at the time, trying to hustle up sales. I’d come back to the office and there was a check on my chair.
I’m like, “You got to stop this. I was out trying to drive business. I need to get on a phone and drive business, and you’re showing me what bills I need to pay. We’re going to do that two times a month. That’s it. You put it in a basket. I will manage it this way. I will do it on a certain day, and I will do it for 4 or 5 hours. I will not let it rob me of the ability to grow.” It’s a necessary evil. We have high credit. We pay our bills on time, but we compartmentalize them. We made it part of the business that happens on a schedule so we can spend 95% of our time growing and 5% paying for it, not the opposite.
Frank loves stories about this guy. I had a manager who didn’t use email or didn’t like email. This was like a decade ago. It was brilliant. He didn’t like reading emails. He thought they were stupid. He thought people sent too many emails. He thought it was a huge waste of time. Frank, can you argue with that?
He thought there were too many people who thought their job was doing emails instead of talking to customers and making money. Do you believe that, Frank?
The more time I spent with this guy, the more genius I thought this president was. Many people think their inbox is their job. They’re like, “If I can get to zero inboxes, I must be doing something.” All you’re doing is other people’s to-do lists. What this guy did was if you sent him an email, you either got a phone call at 10:00 AM or 2:00 PM. Glenda brought his emails in at 10:00 AM and 2:00 PM. Any email that happened from 2:00 PM until 10:00 AM was printed. It was brought to him. He read his emails in batches twice a day. A lot of people do this but they don’t have assistants to print them out.
There’s something very genius in this. He didn’t read his emails at 7:00 AM. When he came in, he watched the bond market. He got onto his Bloomberg, started looking at how bonds are working, and started making phone calls. He was buying. He was doing all the trading for the company. That made the company tens of millions of dollars. That was a much better productive use of the president’s time than reading emails. That’s what he did in the morning.
He then would call his regionals. He would call his secondary guy, which was his underwriting guy. He was like, “What’s going on? What are you working on?” They would chat. 10:00 AM came. Glenda brought in his emails and he read his emails. Maybe there were twenty that had happened since then. The beauty of his process is not a lot of people sent emails because he never sent you one. He didn’t get any replies. He didn’t get Reply Alls. He didn’t get many forwards.
His emails were, “I sent him an email saying, “This is something I’m working on,” and he would call you. You knew you were going to get a call around 10:00 AM to 10:15 AM. He would work his way through it and then he would do it again at 2:00 PM. There’s something genius in that. He thought email was a very negative experience, so he only did it twice a day. He turned them all into positives, which were phone conversations, which is how he appreciated working. I felt like that was worth talking about limiting negative experiences and turning them into something more positive that you enjoy more.
This has nothing to do with positivity bias, but it has everything to do with productivity and value. We are all different. In the news, Brittney Griner got shipped off to some work camp in Russia. She’s not going to have a chance to show how great she is in a work camp in Russia. She’s going to try to survive. For most normal people who aren’t in those types of situations, hopefully, you make it to a place where your individuality is rewarded and you are compensated for production.
McDonald’s isn’t going to reward you for individual thinking. They’re going to care if you put something into a wrapper and then hand it to a customer. In management, leadership or these types of things, what you need to realize is twofold. What are your inherent skills and strengths? The person Ian is talking about, his skills, strengths, and what set them up for success was touching tactile things like the bond market, talking to people, and synthesizing data off of these people. He knew what he was good at and how to control information his way. He was insanely successful because he was able to do that.
What I ask you to think about is where is your genius zone. Where is your genius zone, and how much time do you spend in it? If you’re a leader, how do you get your people into their genius zone? Most people will tell you what they suck at and harp on it. We talked about 360. We know where their weaknesses lie. It’s my job as a leader to get them to focus on the things where they’re great.
Someone else will do the stuff you’re not great at probably at a lower cost. Give that to them. That doesn’t mean you’re weak, bad or insignificant. What it means is you’re smart enough to know that these are my fallacies. These are the things I’m not great at. Instead of trying to spend my time doing them, I’ll give it to somebody else to do and I will do the things I’m great at. That is what society rewards.Let someone else do the stuff you're not great at. That doesn't mean you're weak or insignificant. It means you're smart enough to know the things you’re not great at, and instead of spending time doing them, you give it to somebody else to do so… Click To Tweet
I’ll use one last example of this. If you make $2,000 an hour, that’s $80,000 a week. That’s $4 million a year. $4 million is a lot of money. That’s being an above-average punter in the NFL or a good third wide receiver. These are jobs that most people don’t get. My goal around here is to focus on $ 2,000-an-hour problems. If it pays less, I try not to do it. I’m not successful at it. Clearly, this show is an exception.
With that being the case, if you focus on the high-dollar stuff where you can add the most impact and you’re successful even 30% of the time, think about what that does. That’s still $1.2 million if you make no money with the other hours in your day. How do you do that in your job? How do you focus on the stuff you’re great at and not the stuff you’re bad at? Where this plays into negativity bias is this. We think we’re weak at something so we should focus all our efforts on that. What I say is the opposite. Don’t focus your efforts on where you’re weak. Make sure you’re not going to drown because of them, but get them to a point where they’re stable. Focus on the stuff that makes you great. Society rewards that.
Let’s change directions on this and talk about bad apples in a company.
I can’t wait to talk about this.
You’ve been through my management class with your team. I have an entire week devoted to bad apples because it’s one of the hardest things new managers struggle with, especially bad apples who are performing to an extent. They are capable of getting results. There are three types of bad apples. There is Debbie Downer who always sees a cloud of rain no matter what because life is hard, never smiles, and always brings the party down.
There’s the deviant who’s a jerk or an asshole. That could be for lots of reasons. It could be someone who’s a diva who thinks they’re the king in the office. They’re bad people. They’re bullies. They pick on people. They are inherently negative to other people and make people feel small. There are the slackers. These are folks that are quietly doing 70% of what the rest of the team is doing and everyone knows it. It makes the rest of the team feel like it’s an unfair situation.
In an awesome study, there are two psychologists, Baumeister and Tierney, that studied team dynamics. They studied over 1,000 different companies. They were looking at productivity in companies and were trying to see what the special sauce is. They weren’t even looking for bad apples. What they found was that a small number of discordant voices inside a company can completely ruin the culture and have an outsized impact on productivity and the experiences with the rest of the team.
They found that social undermining was five times more impactful on a team’s productivity than social support. I’m going to say that again. Social undermining was found to have a five times impact on a team’s productivity over social support. Negativity in a negative person blew out anything the positive people on the team could impact on the company.
My point is always if you are going to let someone who is one of those three things, a Debbie downer, a deviant, a jerk or a slacker stay on your team, they better perform so damn well that your company almost is reliant on them. Even then, you should be thinking of ways to replace them. That should be a short-term situation because if not, their productivity is never enough to cover the loss of productivity of the rest of the team from their negative attitude.
There’s a book called The No Asshole Rule, isn’t there? We’ve talked about that before. Do you want to summarize what that is?
I haven’t read The No Asshole Rule. I just have heard of the book.
It’s about you don’t keep assholes on staff for very long because it has all these negative effects, which Ian talked about. I’ll tell two quick stories. The first one is this. We had some layoffs. One of the people that we laid off, when we asked the support staff that works with her what they thought, toxic was the word. That’s not a word you want to be associated with you in your career. That is terrible. That means there are bad things happening and there is a swirl of bad stuff around you. That isn’t the place you want to be.
Lower than asshole is toxic. You have to be very careful if that is your attitude because people are paying attention to it. Especially, likability is critical. I did a presentation for 300 people and I talked about the top ten things you have to do in a recession. One of the bulleted points is what Ian and I have talked about here. It’s to build your lifeboat. It’s time to pick who’s going to be in the foxhole or the lifeboat with you. You do not want people who are assholes in your boat. There is one exception, and it is unless they’re incredible.
I have a part-time job. Ian knows about it. They refer to me as the world’s nicest asshole. I’m more critical than anybody else that works there. I held 300 people in the palm of my hand for two hours because I’m good at my job. I’m not an ass, but I am very critical in a way that’s a little bit different. They get construed as that but I bring a ton of value. Because of that, they tolerate me. It’s because of the fact that I bring a ton of value. I know this.
I don’t know if it’s a long-term fit or not because there’s headbutting. I don’t think they’re hard enough. They think I’m a little too hard, but I’m good at it. I can synthesize things and communicate them in a way that others can’t. I’m the chosen ass. I’m the one who delivers the bad news because I’m okay with it. If you are that person, you must know it. Don’t be surprised. You need to be incredibly great at what you do.
I got to cut you off. You’re talking about two different things. I don’t equate being critical with being negative. Someone who’s negative doesn’t have a purpose. A toxic negative person is an unhappy person who’s miserable no matter what happens. You’re critical, which means you’re not passive-aggressive. You’re assertive. You’re willing to look someone in the eyes and say, “Your business is failing for these three reasons. They’re all on you. You should fix these,” whereas the other people around you in that mastermind won’t say that because they’re afraid of hurting someone’s feelings. You know that you have to hurt some feelings to be a great coach. That’s different from being negative.
Critical is being honest and sharing your experiences and what you’re seeing. Negative is bullying someone for the sake of it because you’re using your power to make yourself feel better. That’s just not you. You are critical to the point where it stands out in your organization. It’s a little bit eye-popping. Part of that is we grew up in some tough Fortune 500 companies.
You grew up in NVR. That is not a place for the weak. You’re killed and eaten when you go to the corporate office. I grew up there too. I grew up in GE under Jack Welch. You didn’t have soft skin. The guy wrote a book called Straight from the Gut. He told you when you were sucking. I don’t think you are negative. You are candid. People should pay you even more because not enough people in that organization you’re in are candid enough with people. They’re about to wish someone was more critical of them when all of their debt comes due and they’re screwed because someone wasn’t being honest with them about their business. That’s my opinion on that deal.
What I will say is this. Maybe I’m an asshole or maybe I’m not. The people who can be assholes can be misconstrued or misunderstood. The ones that are typically around are usually understood by a few people, or they add incredible value. The people on my staff that piss the most people off tend to be the ones who make the company the most money. We’ve got to do our job to keep them in the lines and make sure they don’t get outside of them that they do too much damage. That is a different thing from a high-level performer.
We took this to sports. There’s a lot in the news about Tom Brady. He’s getting divorced. He’s throwing the iPad. There are all of these things. He’s the opposite of Aaron Rodgers who’s passive-aggressive. Tom Brady is seven times more accomplished in winning than Aaron Rodgers who might be more talented. It’s because what Tom Brady does is he confronts and deals with it. He takes it head-on. There is no negativity associated with that because he calls you out and he’s onto something else. There are other things that type can linger. That’s what Ian’s saying. Ian and I both have a similar strategy here. We’re going to deal with it. We’re going to call it out. We’re going to say, “That’s not it. It’s this. This is our opinion of it,” and we’re going to move past it.
Staying on quarterbacks that are talented. We’re watching games like any fan. We don’t have any inside information here. When you watch Tom Brady, he’s critical of the effort. He said, “We need to give more effort.” When you hear him chew an ass or when he’s yelling at guys on the sideline, it’s effort. It’s the focus.
It’s things that can be controlled.
If Aaron Rodgers throws a pass and someone drops it, or they run the wrong route or not the great route, what does he do? He rolls his eyes and turns away. He shows off on TV that you’re not good enough. A lot of his guys don’t have some of the talents.
He embarrasses them.
He wants the world to know, “That wasn’t my throw. That wasn’t me. I’m a great quarterback.” He’s not focused on effort. He’s focused on, “I don’t have enough skill around me. Get me better skill around here.” To me, that’s a negative person. That’s negative leadership. Tom Brady is holding you to the same standard that he will go with. He’s a hardworking guy. He puts in the max effort. He expects it out of everyone else and you’ll hear it if he doesn’t. Aaron Rodgers is who I would consider more of the bad apple. He’s more of a deviant. He’s more of a jerk whose ego is so big. He’ll make you feel small. I don’t think Brady is trying to make everyone feel small. He wants their effort level to reach his. That’s all he’s pushing for.
That’s great leadership. Let’s get into leaning into the negatives.
As humans, because we’re so impacted by negativity, there’s a strong aversion to loss. We’ve talked about this before, that people would rather avoid a loss than go for a win, which is why most Americans are employees and not employers. That’s a loss–aversion culture. We play not to lose a lot of time. I’ve talked about this before. I’ve seen executives with stock options that are in the green. They become order-takers and try to fly under the radar.
They work to not screw up. They work to not have anything negative tied to them. They end up having completely unspectacular careers and they aren’t respected. You can have a problem with that. If we know that, and most people have a strong aversion to loss, you can run into a culture where there’s no risk-taking at all. Everyone is trying to stay under the radar. My question to you is as an owner, how do you encourage risk-taking? How do you encourage people to put themselves out there and take a swing that might fail?
I don’t necessarily know if we do it exactly like this. In our business, we encourage you to get something under contract because we have a contract that is written with an out or if it’s the wrong deal, we can get out of it. What I can say is we had this conversation. In the presentation I did, I showed the leaderboard that we use in our office. We have a leaderboard that’s up on the TV screens in the office. It shows who’s number 1 and who’s number 8. It shows this, and it’s not from a public shaming standpoint. It’s because I want people to understand where they are. If they want to change it, it’s on them to change it. If you are in 3rd place and you want to get the 2nd or 1st, what does it going to take to get there?
What I want to breed is a culture of winning and competition. The most fun I have in my life is when I’m competing and I’m winning. As a 47-year-old, it’s different than it was as a kid. My four-year-old runs around the house. He wants to be fast. He wants to win the race. It’s built into us. He doesn’t know that it’s inherent inside to want to win.
What we try and talk about is this. Put the good stuff in front of you and put that in the windshield. Put the bad stuff in the rearview mirror. Focus on the windshield, not the rearview. Push hard about what’s in front, how we accomplish, and how we achieve. Do not focus on the stuff that’s dragging us back or down. That could be doing paperwork. That could be the person who tells you no. That could be the deal you didn’t get. Leave that behind you, focus on this, and then make it tangible.
That’s what we’ve done with our culture around here. We want people who want to succeed and want to push. We’ve got the TV screens. We do a belt that we give out once a quarter for whoever has got the most revenue. We want to breed a culture of people who want to win, not a culture of people who are comfortable losing.We want to breed a culture of people who want to win, not people who are comfortable losing. Click To Tweet
I love it. I’d add one more thing that you said earlier on this about trying to breed more risk-taking. Frank got up in front of his whole team and said, “I screwed up on this deal. I missed it. I made a mistake. That’s normal. I’m not perfect.” One thing that Frank is doing to encourage risk-taking is to show people he’s human and that he makes mistakes. Even with all of his experience and having his name on the door, he makes mistakes.
He’s like, “Guess what? It’s all right. I didn’t fire myself. I didn’t quit the company. I’m not shutting the doors down because I made a mistake.” Having that humility to admit when you screw up goes a long way in building a culture where others will raise their hand and say, “I’m struggling,” or “I failed. I made a mistake. If the boss makes mistakes, I can make them too. I shouldn’t make too many. I can’t make them every day, but it’s okay.” Self-deprecating leaders create great cultures where people aren’t afraid to fail. There’s a little more risk-taking when you have a self-deprecating leader.
I’ll further the conversation with this. I’d be like, “I screwed up. This is how I did it. This is how I will react differently going forward. I will not make the same mistake. I understand what I did wrong. I’ve coached myself. I’ve talked about it publicly because you might be able to learn from what I did. I’m capable of making this mistake and so are you. I’m not going to criticize myself too much over it. I won’t criticize you for making a similar mistake, but we’re going to manage to a standard that’s going to help you not make the mistake that we just made.”
Frank’s business is a pure sales organization. Every business that I’m in is purely in sales mode. We don’t do anything until I sell something. In a sales organization, you have to think about what persuades people. I have two quick stories here on how a salesperson might use negativity bias. Red Cross was looking to increase its blood donations. Red Cross ran an experiment. They delivered letters to people in different houses. They split them up 50/50. One letter was written that they were telling people that they could “save a life” by donating blood. The other letter said that they could prevent someone from dying. One was positive, which is to save a life. The other was negative avoidance.
What they found was that both letters worked. They got donations. Those who were delivered the negative letter to prevent someone from dying were 60% more likely to donate blood than those that were offered a chance to save a life. That’s avoidance. That’s loss aversion. That’s negativity bias. That story is awesome.
There’s a second story. This is the second study that was done on loss aversion. There were two groups of teachers that were seeking funding to do some projects. One was promised a monetary award if their students excelled at the end of the semester. The other group of teachers was given the money upfront, and then told they would’ve to pay it back if the students didn’t excel. What’s interesting is both were going for the same target. Both would get the same money if their kids did well.
The second group that got the money but we’re told they’d have to give it back performed 50% higher, which is loss aversion. They’re like, “Now that I’ve had it, it’s more real. I don’t want to give it back.” Those are two ways of looking at motivation within an organization and looking at persuasion if you’re a salesperson. How do all the politicians stump? We had an election. Was it positivity or was it loss aversion?
It’s all negative ads. They’re like, “If you don’t vote for me, this other guy’s going to make your leg fall off” or something. It’s gotten worse with that.
They’re like, “Democracy is on the ballot,” or “This could change everything in America forever.” It’s like, “No, it’s not.” That’s how they try to gin you up to come in. The way politicians work is to say, “Come vote so the other guy can’t win.” It’s not, “Come vote so I can win and my policies work.” It’s, “You need to come vote so Joe Biden doesn’t become president again. You need to vote so that Donald Trump doesn’t get back in office.” That’s how they sell themselves. It’s not, “Look how great I am than Joe Biden.” It’s, “If you don’t want Trump, you better get in and vote for me,” and it works. We have more voter turnout than we’ve ever had because they pound us with negativity.
The pain-pleasure theory is something that is worth talking about. People are four times more likely to avoid pain than they are to gain pleasure. Think about all of those things in your life. Avoiding pain is so much more positive or so much more impactful than gaining pleasure. When people go on extreme diets, they don’t break it with Oreos or Doritos. What’s usually on the line? Death. People who are about to die that their doctor has put them on a restrictive diet where they say, “If you go off of this diet, you will die,” tend to lose weight incredibly. I know people who’ve lost 150 pounds in 6 months. It’s all because they had a scare with death. You’re afraid of losing in a big way. That fear causes you to do it. It’s a lot more than gaining pleasure. Let’s bring it home.
Summarizing everything we talked about here, just know that you’re not special. You are impacted by a negativity bias whether you like it or not. If you’re a human being, you are not getting around this. You are being sold this in marketing. You are making career decisions that could hurt you. You are making investing decisions. Your goals are being impacted. Understand it and embrace the fact that you’re human and that’s happening.
Know how to avoid it. Avoid the negatives. You cannot weigh on the positives. If you got to look at that 5:1 ratio, it’s a lot easier to go after the 1 than try to pound in 5 extra positives every single day. Surround yourself with people that hit that 5:1 ratio. The marriage example is the same with friendships. It’s the same with business relationships and companies you work for. Surround yourself with it.
I would also say to stay the hell away from social media and cable television. They know that they get more viewers the more negative they get. When you spend too much time in those places, you become a more negative person. It impacts your overall mood. If you’re thinking about, ”I’m trying to be happy in life and I want five positive experiences for every negative,” you sure as hell aren’t going to make up for spending three hours on social media and cable television in your life to make up for a positive day.
Those are my biggest takeaways from researching this. Change your perspective. Stay away from negative influences. If you’re a manager and you have someone who’s a negative person, cut ties. Get away from them. Get them off of your team. If you have a negative manager and you’re talented, why are you still there? Life is way too short to be around negativity or to mess around with it.
I’m going to use two examples. I’ll do them fast. The first one is this. If you work somewhere and you don’t want to lose your job, figure out how to add value to the company. Figure out how to spend as much time as you possibly can by doing the things that move the needle for you, your company, and the business. There are people that I’ve encountered in my life that seem clueless. They’re out to lunch, but somehow or another, they do a great job at what it is they’re doing. That’s okay because they’re great at what they do. They’re not global. They don’t think outside of themselves. They do the job and do it great. Focus on doing the things that are most critical to the job and put the other stuff aside.
The other piece of it comes down to the thing we talked about with marriage. I’m married for five and a half years. It’s hard. I’ve got a 1-year-old and a 4-year-old. It’s hard. What I can tell you is this. I have a ton of time around my wife or my kids. I’m at work a hell of a lot more than I am with them. By 9:00 PM, I’m pooped out and exhausted. I’ve had two and a half hours at home.
What I do when I’m home is put my phone down. I don’t pay attention to it. I get it as engaged as I possibly can. At bath time, the phone isn’t with me. When I’m running laps with my son, I’m engaged in those moments. I’m trying to make as much of them as I possibly can for every moment. By doing it, I’m leaning into it and I’m giving it my best. Am I at 5:1? I hope I’m a hell of a lot higher than that, but that is my hope and goal. It is to get as much as I can out of those moments.
I love it. If anyone learned anything from Frank, it’s when you have a bad night and you crack into that Oreo package, don’t let it take you down the road of looking for some black tar heroin on the black market. Don’t do that. Call it a night and say, “I shouldn’t have eaten those Oreos. Tomorrow will be better.”
Don’t go from Oreos to pizza to booze to heroin.
Don’t do that. Be like Frank. Let it stop at Oreos. That scale will hurt you the next day, but you won’t wake up in a hospital getting your stomach popping.
I will go directly from Oreos to a shot of whipped cream in my mouth.
That’s okay. That’s fine. That’s a nice dopamine hit sometimes to get you through the night. If you are new to our episode, we hope you enjoyed this. Hit subscribe. If you are one of our longtime audience and you have not given us a five-star review, shame on you. Frankie, it is always a 5:1 positive experience when I record with you.
There’s no doubt I helped with that ratio.
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