The peak–end theory is a cognitive bias that impacts how people remember past events. Intense positive or negative moments (the “peaks”) and the final moments of an experience (the “end”) are heavily weighted in our mental calculus. In this episode, we look at how this psychological bias impacts our careers and how companies can use the rule to attract and retain more customers.

In this episode:

  • What’s more important: a good first impression or last impression?
  • What a colonoscopy can teach us about delighting customers
  • Primacy bias and premium pricing
  • What do we really remember about work experiences?
  • The role of onboarding and exit interviews
  • The sandwich method of providing feedback
  • The “Sugar” Ray Leonard approach to getting a better raise

Watch the episode here:

Listen to the podcast here:

The Peak-End Theory

Franky.

Ian, you son of a bitch.

You got yourself a little chug of coffee there to get done beforehand.

I got a baby at the house, Ian.

I get it. Frank, do you think you’ve peaked?

It depends on what you’re asking about. About what?

We’re talking about babies, so you still got a long life there.

I’m not at my peak for waist size. I got a lot more in me when it comes to belt loops.

No doubt. You could expand in that market, for sure.

LMSM 32 | Peak End Theory

Peak-End Theory: We recall primary information better when presented first than later on.

 

Do you remember the movie in the ‘80s, Prizzi’s Honor? My dad loved that movie. It was a crappy gangster movie. The guy is skinny as a rail. He’s 22 years old and he hands him a Hawaiian shirt and it’s a 6XL. The guy looks at the shirt and he goes, “Don’t worry, you’ll grow into it.”

There are different thoughts on what we remember in life. One thing we’re going to talk about is the peak-end theory. The question that we’re going to try to chew into is, is it more important to have a peak experience at the beginning or a peak experience at the end? Is it a summary, an average of all of your experiences for whatever it may be, whether it’s a job, an experience as a customer, some project you are taking on in your life? We could chew on this a little. Think of your favorite family trip in your life, Frank. What was your favorite family trip you ever took as a kid?

My favorite family trip was our trip to California. It was the summer between my 6th and 7th-grade years, so I was eleven in 1986. For me, it was cool because I lived in Florida. California was a long way away. It was mythic. It wasn’t something that was similar to what we did every day. It was the longest flight you could take staying in the continental United States. It was a cool thing. My mother either never have been or only been once or always wanted to go. There was something special in it for her, so this was always a big thing. As a kid, we didn’t have a lot of money. This was a major expense with four people on an airplane flying across the country.

What do you remember about it?

I remember it was in the summer. The summer in South Florida is hotter than hell. The technical term for the heat in the South Florida summer is your balls stick to your leg. That’s how hot it is. We get to San Francisco, which is in Northern California, and there’s a funny quote attributed to Mark Twain that says, “The coldest winter I’ve ever lived through is a summer in San Francisco.” It was freezing. We get there, we get off the plane, we’re frozen solid, and we’re like, “Crap.”

We go directly to a trinket shop. We each get a San Francisco t-shirt and a pair of crappy sweatpants. What was cool about it is we also figured out where Fisherman’s Wharf was. We went to the Wharf and every day, we get a warm piece of bread and we’d all eat off of it as we walked around. It turned into one of these things where I remember being cold but I also remember how much fun it was walking around the Wharf and sharing a big loaf of sourdough bread. It was awesome. I can remember all of it being an eleven-year-old kid.

If we perceive things are getting better in an experience, we have a better overall view of them. Click To Tweet

My favorite family trip is I went out west with my family. We drove from Michigan all the way out to California and stopped everywhere along the way. We saw Mount Rushmore. We saw the Arches in St. Louis. A typical family trip where you’d see everything for three weeks. The old man got time off from the steel mill. I remember random things from the trip. I remember throwing a rock into the Grand Canyon.

I remember being in the Great Salt Lake and walking what felt like a mile and you never got past your knees because the Salt Lake doesn’t end. I remember laying on the water and you float on the top because it’s thick. I remember random things. They’re all positive memories. I loved the trip. It was fun. If I were to go watch a movie of the trip, I bet 80% of the trip was us fighting. Me fighting my sister, my sister fighting me, and my dad yelling, “Quit fighting.” My mom yelling, “Quit yelling at the kids. This is a family trip.” If I were to watch the trip, if you could get a DVD of both of these trips, I bet 80%, 20% It would seem like the whole family was having a miserable last time.

Besides being a riveting television.

It would be terrible. If someone else watched it, they’d be like, “That family can’t stand each other.” On the way out there, the car ride had long chunks of it that were exciting. As a kid in the ‘80s, you don’t have an iPad. I didn’t even have a Walkman. For 30-some hours, you looked out a window in a hot car. Trying to save money, so you got the windows down and not running the air conditioning. It’s 100 degrees in the summer.

On the way out, that’s fun because you’re excited about the things you’re going to see along the way and the destination. On the way back, it’s hell. Everyone is sweaty, grumpy, tired, wants to be in their bed again, they’re fighting. What’s interesting is we talked about, like, “We’ll do this trip again every summer.” We never did it again. Part of it is the peak-end theory. Yes, there are great memories but the end is this long, horrible car ride that’s sweaty and that’s the last taste you have in your mouth of that vacation. It keeps you from wanting to go out and do it again.

LMSM 32 | Peak End Theory

Peak-End Theory: If you mismanage things, you have to be a superhero at the end so you could leave them with a strong feeling.

 

We’re going to talk about peak-end, the primacy effect, and also recency bias. Both of us, California was the trip. We both chose it. My brother and I drove the Pacific Coast Highway south from San Francisco to LA. That’s a ten-hour trip. We had a flight, which everybody goes on fine, but the drive, we also fought and there’s nothing to do. Upfront, my dad is like, “Shut up. Quit yelling at him.” It’s the same story because you got no options. The reason both of us picked it is there were also cool flashbulb moments from that trip that was cool.

For me, the opposite happened at the end. I remember getting home to South Florida and it being 100% humidity at night in Miami airport and walking out of the airport. The air conditioning ended. We walk out of the airport, walk into the car, and I get smacked in the face with humidity. I remember being like, “I want to go back to California.” My dad’s like, “Shut up. You live here.” The vacation was officially over. You and I have talked about that. We’re excited to go to Vegas but the way home from Vegas is going to blow because we’re hungover, tired, and fat. We’ve spent a bunch of money. We have these things in our lives where you start to realize, “I can let momentum and inertia pull me in one direction. The way back, I’m not going to have that same tide in my back.”

I have friends that will not come on Vegas trips anymore because of how terrible they feel on the flight back after Vegas, “I lost $2,000. I spent too much on wine. I haven’t slept for three days. I’m hungover and I got a five-hour flight to think about.” They will not go on a three-day Vegas trip even though they know it would be a lot of fun and everything else before it is great because they want to avoid the terrible feeling at the end of a Vegas trip, which makes sense.

You and I haven’t gone on a Vegas trip since I was still single. If I was even to pitch this, which I wouldn’t so that everyone’s clear, with a two-year-old and an infant, like, “Holy crap.” Not only are you hungover and you’re tired and you got all that to deal with at home, you immediately arrive at the bad decisions because you’re like, “I’m going to avoid it.” It prevents memories and prevents things. Sports are a big part of our lives. I want to get through this relatively quickly. Why don’t you go first, what was your favorite sports season?

Let’s use one that’s common to both of us. We both loved high school football. Let’s be real, Frank. 80% of high school football is terrible. I did not like double sessions. I did not like the August training camp. I didn’t even like lifting weights in the summer for the most part. You remember benching, everyone loves benching. No one likes doing power cleans and max weight squats. You want to throw up half the time. Practice sucks. You’re getting your hand smashed between two facemasks. You’re doing the shoots, pushing a sled. I don’t think I ever enjoyed one practice of football, especially the positions you and I play. We played dirty linebacker positions, guards. All I liked was the games. I remember little flashbulb moments of games. That’s all I remembered that I enjoyed. Most of it, I hated.

It’s the camaraderie. My actual favorite season was maybe seventh-grade football. After you and I laid out this agenda, I started thinking about it. It wasn’t seventh grade. It was 7th and 8th grade. What I liked about it was the stuff that we all had camaraderie when we are playing. What you do with time is you forget about all the bad stuff and you start to remember a couple of flashbulb moments and you say, “That was a great time.” It wasn’t. It was terrible. High school football is the same way, it’s the friendships, memories, and flashbulb. It comes into the peak-end theory that we’re going to talk about here. It’s not the daily grind that was awesome. It’s the few memories that you allow to wash over the rest of what it is that you were suffering through and those are the memories you desperately clamp on to.

By natural selection, over the years, only those that survived were good at primacy effects. Click To Tweet

What’s interesting, Frank, you remember the grind is something you enjoyed and the only reason is because of the shared grind. Everyone did it together. We went through it and we helped each other. The inertia pushed us all through. We got through it. I’ve got some of those feelings from some jobs. Some of my favorite funny memories are from awful markets where managers were doing dumb things and putting too much pressure on people. The only thing you had in common was everyone was going through it together. You laugh a little bit of it going back because you had to keep each other sane.

There are tons of prison movies. In almost no instance is the majority of the movie someone in solitary confinement because there’s no fun in being stuck alone in a room. The camaraderie is what builds the experience, even in the shittiest real estate markets or even in the worst businesses. The flashbulb moments usually come through camaraderie or an event. If you’re alone, there are fewer frequent events. It usually comes into that. As we prepped for this and talked about it, what you start to notice is it’s the events, the people, those are the things that make the lasting memories.

We should do an episode on top five prison movies of all time, for sure. We could do a whole episode on alone movies like Lock Up, Tango & Cash. We could get serious about this.

There’s no doubt. I could do several episodes on what The Shawshank Redemption taught me about business.

In the peak-end theory, people judge an experience largely based on how they felt at its peak and its end. Rather than based on the total sum of all the average or individual moments, we remember and we value those few peak experiences and we remember the end more than about anything else and that includes the beginning. Daniel Kahneman, a psychologist, has done a ton of work around this. He’s big on the remembered value of snapshots, how they can dominate the actual value of an experience.

The peak-end rule is only applicable when an experience has definitive beginning and end periods. You can think about jobs that way. When was the start day? When was the end day? What were the key moments of experiences? How did it end? We talked about sports seasons. We talked about vacations and trips, those things. There have been several studies on this to prove this out, most of them are around Kahneman where he’s done it.

A basic one that they did, people had to stick their hands in freezing water for 60 seconds. One group stuck their hand in for 60 seconds. The other had to keep their hand in for another 60 seconds, during which the temperature was raised a little bit. That group said they had less discomfort with the experience, even though it was cold water for two minutes than the one-minute group because it got better. This goes to show a little bit of how if we perceive things are getting better in an experience, we have a better overall view of them. The other big study that they’ve done multiple studies around something most men fear and are not comfortable with is colonoscopy.

Before you get on a colonoscopy study, I wanted to say something about that. We’re going to come back to this theme. What Ian said is relevant. To quickly reiterate, it’s how things end. In this study, the benefit was it was a little bit longer but it ended strong. That’ll be something we come back to. Keep going with the colonoscopy study.

LMSM 32 | Peak End Theory

Peak-End Theory: The newest information that comes into our brain tends to jumble previous things that came in.

 

With colonoscopy, they took two different groups. One got a colonoscopy and then they had to fill out a survey of how terrible it was. The other group got a colonoscopy but they left the scope up their butt for an extra three minutes and didn’t wiggle it. Frank, you’ve had a colonoscopy. What’s the worst part of a colonoscopy?

Have you ever had one?

I’ve not had one yet.

The four worst things are, number one, you have one. That’s pretty bad. It has a lot of fear associated with it. Number two, you’ve got something going in an exit, which I’ve not had happened to me before. You have something plunged into an exit and then it comes out. The other part that sucks is the moving around. You can feel every bit of it. It’s scary. You go in there with all this fearfulness. The wiggling is bad. I’ve thought about this after I read this study and I can think of how this would have changed the experience. I’m not saying I’m going to run out and get another colonoscopy and say, “Leave it in there for a couple of more minutes for me. Let’s test the theory.” That was the part that was the worst. Moving it around is awful.

In this study, one group got a colonoscopy. As soon as it was over, they pulled it out and that was the end and then they did their review. The other had to lay on the table for three more minutes with an object up their ass. That group that had three more minutes of an object in their ass said it was less uncomfortable than the group that didn’t have the extra three minutes. It’s because it was in their ass and no wiggling. In general, what I learned from this is if it’s in your ass, you don’t want it wiggling. If you leave it in your ass longer, you’ll enjoy it more if it doesn’t wiggle.

It harkens back to the story in Pulp Fiction when he had the watch trapped in his ass. I had this uncomfortable metal chunk to my ass for four good years.

Now, little man, I give it to you. Another study proves that if the ending is less discomfortable than the experience, you’ll have a more favorable opinion of the overall experience. There are different effects. There are first impressions and last impressions. The psychological terms for these are recency bias and primacy bias. The primacy effect is, in psychology, a cognitive bias that we recall primary information better when presented first than later on.

This is the classic what did I think of you in the first five seconds when I met you? Did you shake my hand well? Did you look me in the eyes? Was I weirded out? Humans, in general, are good at this. The reason why we’ve lived for millions of years is when we had a weird feeling about someone approaching us, the people that stayed away or put their guard up are the ones that lived. The ones that sucked at doing this were the ones that got clubbed over the head or eaten by a saber-toothed tiger.

By natural selection, over the years, only those that survived were good at primacy effects. Now, most humans are good at this. The recency bias is the opposite bias. It’s a cognitive bias that favors recent events over historic events where we put greater importance on the most recent thing. This is why a trial that can be going terrible for a lawyer can be turned around by the final arguments or at least so it seems. Those are the two definitions. I’ve always believed that the primacy effect was incredibly important.

Last impressions are powerful and overwhelming. If you're going to give someone something, you should do it at the end of the experience. Click To Tweet

As we talk about which one’s more important, one thing that you have to think about is you and I was going through this. We’re talking about our experiences as customers or customers that we’ve worked with where we got off to a bad start and we turned it around. It’s easy to say, “Recency bias is the most important.” There’s a selection problem with that. What we don’t know is all of the customers that we made a bad first impression on never gave us the chance to go fix it and get a recency bias. How many of them selected out? Immediately, they’re like, “You’re an asshole. I’m not going to work with you again.”

It’s more than work. There are all kinds of these things that happen in life, like Ian will tell a story about our wives. How many times have you missed even having a swing at the plate because you prevented yourself from even getting to the plate? What we’re talking about is it’s hard to calculate the lost opportunities but it’s real. There are lost opportunities that all of us have caused in our lives because of any number of things. A lot of them can come back to your first impression was bad and you’re pushed to the side because of it.

How was your first impression with your wife?

We met at a nice coffee shop in Richmond called Match.com.

Frank Match went right into her phone.

That’s another story about last names and ex-girlfriends that we’ve talked about. Why is this relevant? I have hands that are made for changing tires and not typing. I’m also an awful speller. My wife has a PhD from Georgetown in linguistics. I remember thinking she was cool and I needed to say something witty to stand out and I spelled something wrong and she noticed it.

You used a big word that you don’t normally use and you didn’t spell it right.

I miss-typed it. I knew how to spell it. We still joke about it. She looked at my profile and I seem like a Republican who is incredibly American that can’t type or communicate. She thought I was a neanderthal. 6 to 9 months went by where we could have met and she blew me off. Luckily, what happened, for me, is I happened to be out and she happened to be out. We were both out on dates. We saw each other and she thought I was more kind and she thought I had a good smile.

Not too far after that, we decided to meet. That’s how 21st-century dating works. We’d go and meet and then she’s like, “This guy is smart, strong, and he lets me be who I am.” All the things I don’t communicate well through written communication. I almost lost that shot with her but by happenstance, I bumped into her in the universe and she thought I had a nice smile. She gave me a second chance. I almost didn’t get that second chance with her.

Similar to Jenny and I, my wife, I invited her to a fraternity dance. It was on a boat. We had this big boat in Cincinnati where we threw this huge party on it. We’re going to have to drive. It’s an overnight. It was a big deal. We dressed up. It was formal. The day before we’re supposed to go or maybe the day of, it was crazy, she called and said, “I’m deathly sick. My dad is coming to pick me up from Chicago.” That would have all made sense if she wouldn’t have done the same thing to one of my fraternity brothers like a year before. I’m like, “I’m getting the DeSalvo treatment. This is awful. She did this to someone else before.”

I never heard this story.

I’m cordial on the phone but in the back of my mind, I’m like, “Screw you. I can’t believe you did this. You’re dead to me.” I found another date. I’m one of the most available and interesting guys on campus. I had hundreds of girls that would have loved to have gone on this date with me.

Clearly, amongst your strength is humility.

No doubt. I found out the other day, she tried to call me a couple of times after to apologize, “Maybe we can go out for pizza.” I was like, “No. I’m done.” She went away to an internship. Time went by where I wasn’t bitter anymore and we ended up going on a date later on. We started about as badly as you could. Both of us were talking about this but how many girls that I start off terribly with who never gave me another chance? I got off on the wrong foot. The primacy effect kicked in and they were like, “He’s an idiot. I saw him bong seven beers. That’s not for me.” That was the end of it. It’s easy to say, “Recency effect is more important because look at us, we both got through a bad first impression with our wives and we made it.” There’s a lot more where you never even get that second chance when you go through it.

For those of you scoring at home, I got married at 42. There’s a good chance I’ve missed a few opportunities by being a douchebag.

Let’s say you get off to a poor start. Can you recover? I have an interesting take on this. I worked for a business where there was a serious incentive tied to us to use us. I spend a lot of time running a business where a bad first impression happened but the customer couldn’t walk away easily. They had to go fight to go get the incentive of money that they would have had to use us in the first place, working for a home builder with a finance company.

LMSM 32 | Peak End Theory

Peak-End Theory: Try to close out the recruiting process strong because that’s what they’ll remember about it, and they’ll start for you with a good taste in their mouth.

 

Sometimes you could have people that had an entitled mindset. Frank’s run across a couple that came to meetings late with greasy sandwich bags. We had some of those folks that were out there and we would have to go recover. You can recover. Take homebuilding and real estate in general. The most emotional moment, by far, is closing day. There’s nothing close to closing day. There are cool moments throughout the process but the closing day, by far, if you get that right, if you do it with low stress, you make them happy at the end. They get the keys to their house, they walk in, it’s theirs that day, it’s an emotional day.

There are other emotional days, too, there’s the contract, the day you break ground that you can get right. The day you pick your options is an emotional and exciting day for people when they go through it. The loan approval. You’ve been approved by a bank. You can afford this. Here’s your payment. The day you lock your rate. You and I have been involved in all of those. The sales rep could do a bad job in the front end but they still like the neighborhood. The loan officer can screw up at the beginning on the financing. All of those other moments when you look at the peak-end theory say that you should be able to easily overcome those if you go nail all the other moments that you have to nail. I mentioned most of them. Are there are other ones? Did I get most of them?

You got them.

If you would nail all those and then kill it on the close. The analogy I use for this is it’s like a roller coaster. From the time you get in line on a roller coaster to the time that you get off and your hair is blowing all back and you’re looking at your picture, 95% of that two hours if it’s a popular ride is awful. You’re in a long, sweaty, nerve-wracking line. You’re trying to convince your kids not to bail out after 1.5 hours of standing there. You’re sweating. There are annoying people all around you on their cell phones but then you go ride a two-minute ride that’s unreal and that’s all you remember. You remember the end and how good it was. The gray ones, you’ll get in line and start all over again because it was that good at the end. To me, that’s the importance of closing hard whether it be with a customer or anything that you’re doing.

One of the things that you’ve taught me is superhero management. If you mismanage things throughout the end, you have to be a superhero at the end. You want to leave them with a strong feeling at the end. It’s the reason you get a mint at the end of a cheat meal for a barbecue because they want to leave you with something sweet to remember the meal by and add time for a tip. If you do this properly, you can change from having one recent event and rewire it.

In the home building process, there are many things that are cool that if they’re properly celebrated, you can also overcome one bad experience and not have to be a superhero in the end. As you look at this like, “How do I apply this in my business? How do I apply this in my career?” You can have a couple of flashbulb moments and not just a strong end. In the home building process, when you sell the contract, instead of signing the contract, they take a picture and then write a thank you card with a copy of that picture in it. When you break ground, walk them out on-site and have them put sold on the site, and have them be part of it, you create memories for them. If you do it the right way, it gives you more latitude to have mistakes in the process and they’re still going to like the overall part and you can pre-empt screw-ups. In home building, there are going to be screw-ups.

We've all had bad moments and made bad things, but what's the next dialogue? What's the next chapter in your story? Click To Tweet

The other thing I would talk about that’s relevant is don’t celebrate things with people with jargon. What do I mean by that? I got promoted to vice president in NVR. I didn’t get a letter. I didn’t get anything else. I got a comp form change and I was added to an indemnity list. The indemnity list is you’re going to be signing things now and you’re not going to be held personally responsible if something screwed up because you signed it because the company screwed up. That was my notification that I became a vice president, an indemnity form.

It could have been something so much more. It could have been a handwritten card, a phone call. I could’ve been someone come in and say, “This is pretty cool. You’ve been added to this list because you’re a vice president.” Instead, I was like, “Am I a vice president now?” It was a mess. How do you change those things for other people that might work for you and say, “This is cool?” I remember when I got promoted, my name was highlighted on a forum and I figured it out myself. I didn’t want you to have this experience. Wouldn’t it be neat to sit down with someone and celebrate that moment? That’s how you build equity. That’s how you can change a dialogue.

I talked to someone who had no idea how stock options worked, had no idea how their executive comp work, and didn’t know they had an account. Merrill Lynch didn’t even have it set up. They’d been in the role for months. All they had done is someone to send them a package with a signature and that person assumed they knew what it meant but that’s after the fact. It’s such a downer reaching out to somebody that hasn’t been with the company in three years to explain how this works. I can think of this with companies as well as ones that can come through.

We’re on a family trip with Jenny’s family. The hotel line was a couple of hours for us to get through their registration. They were overwhelmed. They were missing people. They screwed up several things. Our room wasn’t ready. We open the room and they sent us to a room where someone was already in. We opened a door to someone screaming with a towel wrapped around her. She had gotten out of the shower and she’s screaming, “Get out.” It was traumatic. It was awful.

Jenny’s mom is freaking out, “Let’s get out of here. Let’s go find another hotel.” The manager got involved and he was a genuine guy. He upgraded us to good rooms with amenities. He set us up for dinner that night. He stopped by for dinner and personally brought out a bottle of champagne. He comped it. He went out of his way to check in on us a few more times and we ended up staying at that place the next year when we came back. It was a great example of an awful first impression that was completely turned around and it wasn’t like he threw a bunch of money at us. Showed us that he cared, and he was truly appalled by what we went through. We went and spent a lot more money at their hotel because of it.

I find that to be so rare. It’s so rare that you have someone who can react to that and respond well. Nickel and I checked into a hotel. It was late at night. We got in there, I had the key, I opened the door and I see big Pepsi bottles on a nightstand and three people popped out of bed. We closed the door and ran out. We’re like, “There’s someone in the room.” The guy put his head down and gave us new room keys. We get upstairs to the new room. We go check-in and there’s only one bed. There are two of us. We call down. He’s like, “There’s a pullout couch, so we open up the couch and the couch slams into the wall.” It doesn’t completely close. Nickel had booked a room. He looks at me goes, “Good night,” and closes the door.

No one tried to recover.

Not even close.

Did you guys even bother to complain or was it the attitude, “We don’t care?”

The only thing I wanted to do that was such a pain in the ass is I wanted to rig it for when I left, the cleaning crew couldn’t open the door because the front door also opened into the pullout couch. I set it up where I closed the door and the door in the pullout couch immediately slammed close. They would have to get the skinniest person on staff that cuts through to get into the room. That was my way of getting vigilante justice.

As a company and with customers, the data would say that the recency effect and the last impression is powerful and overwhelming that if you’re going to give someone something, you should do it at the end of the experience. Think about a time you’ve been in a restaurant and the kitchen gets a few things wrong. They’re backed up, so it takes way too long to get your drink orders out or something else. You almost never will hear a waiter or a waitress tell you mid-meal, “We’re going to comp something.” It almost never happens.

What will happen is, at the end, when they bring the bill out, they’ll say, “I’m sorry for some of the poor experiences. What we did was we went ahead and comped your first round of drinks or those desserts were on the house.” They tell you before you are about to pay the check and give a tip because they know that if they can finish strong, you’re going to have a better memory and you’re more likely to come back to that restaurant because that’s the last thing you remember.

What I’m trying to think about here is in a job interview. I’ve said some things that I wish I hadn’t. I was able to overcome it and I was able to finish incredibly strong. I got job offers from people even though I made mistakes. Much of this was back in college. You can fix an early screw-up if you do it right and if you wrap strong and you leave a favorable impression at the end.

I have a good example of this. One of my favorite hires of all time is from Venezuela and English is not a strength. She’s spoken fine enough to get through the interview, but I could tell she was struggling in the interview to tell me the story she wanted to tell me because she wasn’t comfortable with the words. You’re asking behavioral questions and you’re asking for examples, things of that nature. She was doing fine in the interview. She wasn’t blowing my mind. She wasn’t killing it.

You could see she was passionate. She was wanting to do a great job. I don’t know, maybe I would have hired her or maybe I wouldn’t have when we went through it. In the end, we’re getting ready to get up and finish the interview. She said, “Can I tell you one more thing about me?” I was like, “Sure, go ahead.” She said, “I might not have got it out the way I wanted in this interview but I’m someone who takes work seriously. You will never get drama out of me. If you tell me to do something, I’m going to do it well. I’m going to learn how to do things that I don’t understand and you are going to get a worker. You are not going to get anything other than someone who does what you pay them to do and I will work so hard for you.”

Frank, think about all the interviews you’ve ever done? It’s 1% of all the ones I’ve done that close like that. They look you in the eyes and close and tell you, “I’m going to sum everything up in an elevator pitch about me with passion.” I remember I made her an offer immediately. I said, “I believe you. Do you want to work here?” She was like, “I do. Is that an offer?” I told her the salary, I reached my hand across the table, and she shook it. She was like, “Thank you so much.” She teared up and I was almost teared up. I was touched by it because here’s someone who worked her ass off to get to this country, and she was a single mom raising kid. It was a great story but the end was so powerful that it wiped out 59 minutes of, “No.”

This is perfect. Recency bias got her the job and she was honest enough to know that she hadn’t put together a strong enough pitch and she had the courage to say, “I’ve had 59 average minutes, I’m going to have one incredible minute to close.” Here’s the opposite of that. Primacy is you take advantage early. Nothing is perfect. There are always different things. I’ll give you a great example. When I sit down with someone, I usually say hello to them. I’m usually at the last interview at this point in my life and my career.

They’ve gone through bunches of tests and all kinds of stuff. I start with, “Thank you so much for coming in today. Anything I can get you?” They say no and I say, “I have all the paperwork and all the tests and everything in front of me. Why don’t you tell me about yourself? Not on paper. Who are you?” Ninety percent of the time, they talk to me about their second to last and last jobs and that’s it. They don’t tell me, “I’m passionate about coaching baseball.” “I’m a mother.” “I did this.” “I’ve traveled.” “I’ve done this.” I don’t give one shit what’s on your resume. That certainly isn’t you. I’m not hiring that if you didn’t have the core competency, there’s no way you’d be in front of me.

If I wanted to read your resume, why did I schedule a time to talk to you? I don’t need to read your resume again. I read it.

LMSM 32 | Peak End Theory

Peak-End Theory: If you’re going to lead with good, it needs to be genuinely good feedback that applies to that person, and you need to finish with genuinely applicable information.

 

You are giving an opportunity to utilize the primacy effect to your advantage. If you do this right, the entire interview is me selling you on why you should work for us. If you do it wrong, in the recency bias, you’ve got to throw a haymaker at the end and hope like hell it lands, so you get the job. Think about that wherever you are in your career and where you’re at. Can you start strong? How can you utilize these two different mechanisms to your advantage? Can you start strong, be strong in the middle, and finish strong? That’s how you come in with a star next to your name. It’s worthy to talk about it because so many people come in with a cape at the end because they screwed up the beginning.

Let’s stay on the interview thing for one more minute. Based on everything we’ve talked about, kill it at the beginning, kill it at the end, have a few amazing stories sprinkled throughout. If you don’t kill it upfront, some interviewers aren’t trained well enough to not know that they might blank out. Especially the higher you’re getting paid, the more they’ll expect you to make a good first impression.

Primacy effect, there’s the study that people that are paying $4 or $8 for a slice of pizza. For those that paid $4, the first taste didn’t matter as much. Those that paid $8 expected the primacy bias to be off the charts. I paid $8, so if that first bite wasn’t incredible, the whole experience is bad for me. Whereas someone on $4. the first didn’t matter. The higher the money is for the job, you better kill that first impression or they’re going to think, “I’m wasting my time. They’re not worth this kind of money when they come out.” You want to nail both of them.

One other side of it, Frank. I’ve also had interviews where the first twenty minutes go great. They do coach baseball and they do connect with me. Maybe they went to school in Michigan. Maybe there are some things that we laugh about and we have some shared experiences. We get along and they put their guard down. They had such a good effect that they get a little too overconfident. They underwhelmed me for the next 40 minutes and they don’t finish strong because they’re assuming, “I connected well with this guy. I closed early.” They closed soft that I don’t want to give them a job. I’ve had that happen with me as well where someone killed it early and the more you get into it, you’re like, “There’s no substance here.”

You can’t be fool’s gold and pull it off with one or the other. The woman who had the language barrier that you talked about that finish strong, she was probably an average to above-average interview and you realize, because of enough experience, there’s something missing here. When she did that, you’re like, “Wow.” She jostled you a little bit and she wowed you. If you’re interviewing for something, you could wait until the last couple of minutes and try and resurrect it or you can have a great plan.

Flip this to a different side. Let’s say you’re a new manager reading and you’re sitting across the table from somebody who’s nervous and who’s a second language speaker. Give them the chance to reset the deck and get their best stuff out. You might sign off on a candidate, saying, “I’m not going to hire this person because of the fact that there were nerves or something along those lines.” It’s all part of it. Think about how you can course-correct if you screwed something up in your life.

We’ve all screwed up. If it wasn’t so bad that you got immediately fired for it, the screw-up isn’t the thing that is remembered. Do you screw up again or do you learn from it? If you learn from it, how do you memorialize and crystallize that? We’ve all had bad moments. We’ve all made bad things. Things will come out of our mouths we wish that hadn’t but what’s the next dialogue? What’s the next chapter in your story? That becomes so important because if you don’t, you have to rely on recency bias or you’re screwed. That’s a superhero thing. It’s hard to have a great career if you constantly have to save yourself from yourself.

Let’s look at this from a few different perspectives to close out now that we’ve got some of the information out. If you’re a manager of people, a leader of people, a coach, a manager, leader, vice president, director, or whatever you are, you have direct reports. What this tells you is, you’re only as good as your last abet, you’re only as good as your last interaction. How people feel about you is going to be highly influenced and biased by the last conversation when they left your office. That’s the way we go.

The terminus in psychology is interference effects and all that means is whatever newest information came into our brain tends to jumble previous things that came in. An example that we could talk about is onboarding. When you talk about all of the studies that say that needs to be a definitive beginning and end. Think about the recruiting process. There is a definitive beginning, the first time they applied for you or found out you had an open job. The end of the recruiting process is what? Probably the start day. Until they work for you, your recruiting. They could quit up until the day before they start.

When I think about this, I think about how many companies screw up. They recruit, they interview you, they put you through a battery of tests and they give you an offer. The offer should be a big deal, high energy, lots of noise, congratulations, get multiple people to call and say how excited you are that you’re coming onto the team. Where most companies get it wrong, they give two weeks to their company and it goes radio silence for two weeks. No one calls them, no one says anything. There’s a start date but they don’t know much about that start date.

A micromanager is the worst person to work with. Click To Tweet

If you want that whole experience to go well, you’ve got to close strong. You got it from the offer to the start date. Are people in touch with them? Are they letting them know? Are you giving them a few friends to talk to? At NVR we did this all the time. We’d have a few of their soon-to-be peers take that person out to lunch. They’d be like, “Here are the managers in the office. Here are a few quirks of each one.” No managers are involved. Go out. Office hours are 8:30 to 5:00. Informally, some people get in at 7:30 and some are getting in at 9:00. If you’ve got kids, that’s all cool. Here is the way lunches work. It’s the thing you’re embarrassed to ask a manager about. Try to close out the recruiting process strong because that’s what they’ll remember about it and they’ll start for you with a good taste in their mouth.

What we do is we do the offer letter. It’s electronic but we make them come to the office to sign some stuff, somewhere between when they accept verbally or sign and when they start. During that time, we give them a t-shirt, hat, and a coffee mug. We give them stuff. They’ve gone in and they’ve met with different people. Someone pulls them aside and says, “Are there any questions you don’t have?” I have a small company and I don’t have an NVR staff. Ian and I were on the phone with the people who monitor and manage our podcast. They’d offered people jobs and they didn’t start two weeks later and I was like, “I’ll guarantee you it’s because no one touched them in those two weeks.” It’s a common mistake but it’s one of those things where if you add that extra step you touch them twice. One can be a text one could be a call.

I’ve told that guy that when he was complaining, “All these people that don’t start.” I’m like, “It’s you.” Something broke in your promise.

You and I both said it. I run a headhunting company. I’ve seen it. The other thing I do. I don’t interview everybody anymore. We’ve gotten to a point where I don’t interview everybody, so I call and introduce myself and tell them what I’ve heard about them and how excited I am to have them join. Five minutes. My wife sat there and goes, “That was cool.” It was the first time she heard me do it. It’s like, “I’ve heard from Angelo and Carla how incredible you’re going to be. We’ve gotten to a point where I don’t get to get in every interview. I can’t stand it, but I’ve got great people who work here. The agents told me how excited they are to have you. I’m thrilled to welcome you. You’re going to see me running around a madman but I’m always available. If there’s anything I can do, please don’t hesitate. I want to tell you how excited we are. Anything for me?” They usually say no, but it starts a dialogue of, “I’m going to a cool spot.”

As we talk about primacy, recency, talk about the sandwich method, Frank.

I’m going to start with this. When I became a manager, I had a manager for me who goes, “Have you ever heard of this?” He said, “See everything. Forgive a lot. Fix a little.” That is the genius stroke of management. If you have gotten into management, you’ve mastered a skill, a task, or a job. You see things before they happen because you’re great at it and you got promoted. When someone’s new in that role that you’re managing, you should see all of it. You can be a prick and point out every single thing or, what my friend Jason Medley says, give them grace. You forgive them.

You pick 1 or 2 things to focus on, “Great job. A lot of effort and it’s nicely done. Have you noticed these two things?” “Yes.” “Are they causing you problems?” “Yes.” “How can I help you fix them?” “Awesome. Good job.” “As a reminder, I want to let you know that you’re doing great. You’ve only been in this role for X number of weeks. You’re doing an awesome job, keep up the energy. Focus on those two things that we’ll fix and we’ll pick another set of problems. Does that sound good?” “Awesome. We’ll see you next time.” That is the method and how you deliver good, bad, and finished with good. It gives you the opportunity to finish with something that leaves them on a positive.

In some instances, you want to smash them over the head with bad because it’s intentional. It’s like, “I need to get your intention and I don’t care to leave a positive feeling because you don’t deserve it.” If there’s someone who’s on the upswing, I love the sandwich method. If there’s someone who’s on the downswing or who’s in performance management, I don’t utilize it. I utilize more of a direct approach. This ties into both of the entire topics that we talked about with the recency and primacy of how you can deliver the news.

The sandwich method is you lead with something positive about the person. You’re like, “You’re a person with high energy who cares a lot about deadlines. With that being said, I’ve seen over the last four weeks, you are consistently sending in your TPS reports late. These are important to our company for these reasons and I need your help in trying to fix this.” You do some coaching. In the end, you leave with something else positive, “I know you can fix this. You’re smart. You’re great in these other areas. This is an area that’s holding you back.”

You start with a good primacy bias. You talk a little bit about the bad and you finish with good recency bias so it’s a way that you use both of those. I feel like you have to be good at this to try it. The reason why I say that is I’ve seen a lot of people do it and it comes across as disingenuous. It comes across as someone saying, “No offense, but that shirt makes you look fat.” It’s like, “When’s the but coming?” You have to be genuine in the good, in my opinion, for the sandwich method to be worth a damn. If you’re going to lead with good, it needs to be genuinely good feedback that is applicable to that person and you need to finish with genuinely applicable information.

I love your see everything, forgive a lot, fix a little. As I look at those words, they don’t all work together. If you were to say, “Fix everything,” that’s a micromanager. That’s the worst person to work with. It’s involved in everything. Most details don’t matter. They’re annoying and trying to stay busy. If you said, “Forgive everything,” that’s a pushover. You don’t forgive everything. You forgive a lot. In general, most people that are getting paid are trying to do a good job and not trying to do a crappy job. You want to forgive as many mistakes as you can. See everything, forgive a lot, and fix a little, that’s an incredibly cool moniker to remember. That’s a good one for most managers to go put on a post a note hanging on their computer and see.

My boss, who taught me that learned that from a kindergarten teacher. It’s perfect.

It makes sense. We talked about onboarding. We’ve talked about coaching, management, and general styles. This last one is important that many managers get wrong that I’ve seen in my career. When someone gives you their notice, how do you treat them? In general, you should treat someone the same way on their way out the door as you did on the way in the door, as long as they didn’t steal from you or do something terrible to another employee. Let’s take that aside. Let’s look at 90% of people that are leaving for what they think is a better opportunity.

What happens with a lot of managers is they let their ego get involved. They take it personally. They think about how it’s going to impact them and not the person who’s giving them notice. They either give them the silent treatment for the last two weeks like a dead man walking around the office or they outwardly try to make their life hard for those two weeks. They get around and they talk about that person to the rest of the team. They talk trash about him, “Can you believe it?” What they’re trying to do is get the rest of their team to think this is a bad idea and you shouldn’t ever try it. Frank, when you’ve seen managers do this when a peer of yours has left the company and your immediate manager then dogged that person, in your mind, what are you thinking?

I’m thinking two things. Number one, that person’s full of shit. Number two, what are they going to say about me when I’m gone? How are they going to belittle my performance?

What I always find cute about this is this is the same manager who, in a meeting, was extolling the greatness of this person. Now that they’ve left, “They were never any good anyway.” It brings out their real colors of, “You will dog me the second I give my notice.”

You need to respect the deceased is something that comes through this or a moment of silence for the deceased. When someone turns over in a career, I handle it similarly to that. I’m like, “It was a good fit for a while. It’s no longer the same fit. We decided to part ways for these reasons.” We let someone go and we did respectfully. We gave him the ability to exit respectfully. On the team call, I said, “So and so is not with us anymore. We loved him when he was here. He was a great guy with good contributions. There were two things he didn’t do well that many of you felt and that’s the reason.”

We need to embrace the technology that we’re bringing on board. If we ask you to utilize something to utilize it because we think it’s for the betterment of the company. We didn’t have that with that person but that’s the direction we’re going. Now and again what we do is we keep it respectful of the human and talk about what we want to talk about, which is you’ve got to embrace the tech because it makes you more effective. If you’re not, come to us and say, “I got a real problem with this because you can’t keep up.” That’s part of it. It was respectful yet but I’ve seen it go the other way where it isn’t respectful. It’s like you’re supposed to have amnesia for our former incredible performer who now isn’t with us and you turn your back on him completely. NVR did that all the time.

I hired many people back who made mistakes and went to a company that wasn’t as great. The grass isn’t greener and they were great employees. You hire them back but you don’t hire those people back if you treat them dog crap on the way out. Treat them well. Even if they don’t come back or you have some stated policy where you don’t rehire people, which is ignorant, you want them talking to other people about your company well. If someone says, “I’m thinking to work in an NVR, you worked there.” They’re like, “They’ve got a great management team there. They were great to me.” They will remember their last experience stronger than the other seven years they even work for you. If you make it bad or good, their thought process of you as a company will be that last memory.

LMSM 32 | Peak End Theory

Peak-End Theory: Treat someone the same way on their way out the door as you did on their way in, as long as they didn’t steal from you or do something terrible to another employee.

 

I’ll close it with these two things about this and we’ll get into the summary. If someone’s doing an exit interview, they’ve got nothing to lose. They might throw some haymakers, but they might also give you some jabs. If you’re humble enough to listen, you can potentially implement those into your business or into your practices to make yourself better in addition to that. If you leave that person with a good feeling, “I work there, it wasn’t the right job for me but it’s a great place to work. They supported me after I left and they checked in on me or something like that.” They become positive mouthpieces.

If someone’s a scumbag and they stole, you don’t need to do that. You don’t want their friends anyways. With that person, the vast majority, you leave them and send them off in a way that is respectful, that shows that you value them as a person, even though they didn’t do the job great and I wish you nothing but the best and I’m here for you. In our careers Ian, we get hundreds of people reaching out to us that we had to let go or different things happened because we did it in a way where, in the end, was probably the best thing for him anyway.

If you’re not a manager and you want to think about these things in terms of careers, think about something that almost every company does, which is an annual review. Usually, that annual review matters what you get on it. It matters what score you get, what’s written about it that goes into your permanent file, your raise is probably based on future promotions, and things of that nature. Frank and I have reviewed hundreds of annual reviews that managers who have worked for us have completed as second-level reviewers.

What I always find fascinating is the examples that are used throughout the entire review are heavily skewed. That’s not because they’re lazy. That’s because they’re human. A manager’s brain works the way anyone else’s brain works. It’s harder to recall information from March than it is from February. You’re going to remember the more stuff, so as an employee, it is important that if you are going to be on projects if you are going to raise your hand to take on extra responsibility, do it at the end of the year. Do it close to review time. Do it close to the big moments. If you know there’s going to be a panel interview coming up in 30 or 60 days for an open position, do something spectacular in the meantime. They’re going to remember it more. Get on a program. Do a presentation. Offer to go speak at something. Get involved before a decision is about to be made and that decision often has to do with your money.

This was used well in country music. I’ll tell the story. I’m a huge Kenny Chesney guy. He dominated the beginning of the 2010s. Jason Aldean dominated the back end and he won Entertainer of the Decade and not Kenny Chesney, even though I would say Kenny Chesney had a stronger decade. He finished strong, utilized it to his advantage, and pole vaulted ahead into a cool award. You can do that same thing in your career. It’s like what I could say to Ian. Ian mailed it in but he finished strong here at the end of this podcast.

Kiss my ass. The sports analogy of your Aldean, Sugar Ray Leonard had a big fight with Marvin Hagler in the ‘80s and a lot of people think he stole it. The way he did that was it’s a three-minute round, and he would dance because haggler was a tough fighter. He didn’t want to throw with him the whole round. He would dance until you heard little thumping sounds at the end of every round and that says there are fifteen seconds left. Sugar Ray would then jump in and throw 20 to 30 punches as fast as he could. What he did was he used bias because the judges would see that and they immediately score the round after the round.

The last thing they saw was Sugar Ray throwing punches all over the place most of them not landing, but he ended up winning on points. He admitted after that was a strategy, “We were going to try to get the judges excited at the end of every round.” It’s the same with you and your career. If when the round is ending, go make a big impression towards the end. If you’re a manager and you manage employees, and there’s a big moment coming up for them, get it right at the end. Use Peak-End Theory any way you can to your advantage. It’s real. It’s been proven with science.

Ian rounded out with such a peak.

I’ve peaked, Frank. You started strong. I peaked at the end.

I’m not the best-colored man in the business for nothing.

No doubt you’ve done a beautiful job of it. Frank, I don’t think you’ve peaked. You’ve got at least 20 to 30 more diets left in you I’m sure of it.

I’ve got another belt. There’s no doubt in my mind.

You can do it. See you.

Alright.

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