Master Persuader, Warren Buffett, recently released his annual letter to Berkshire Hathaway’s shareholders. If you need the best investment advice, then read his letter. But if you want to improve your leadership and persuasion game, we are covered.
Together we will learn five of the most important lessons from the Oracle of Omaha for selling people on any of our ideas and inspiring them.
New research in the journal Behavioral and Brian Sciences shows that reasoning evolved in early humans more for the sake of winning arguments than as a guide to effective decision making. If you try to persuade people by directly reasoning with them they often argue and resist. Buffett’s style of buy-and-hold investing is easy and is not based on intricate trading algorithms.
The best way to persuade and inspire people is to apply simple, ordinary techniques that fly under the radar. A Master Persuader knows that people cannot resist what they don’t detect.
Let’s pry open Buffett’s treasure chest and extract his buried persuasion gold that was highly effective but went mostly unnoticed.
Own Up To Your Mistakes Early On For Instant Credibility
Buffett admits that they are holding on to too much cash and were unable to make a deal.
“At yearend Berkshire held $116.0 Bn in cash and U.S. Treasury Bills…this extraordinary liquidity earns only a pittance and is far beyond the level Charlie and I wish Berkshire to have.”
When you start with a drawback, you build credibility and trust with your audience early. Later, when you get to the pros of your case, they will come to believe in them more. Glossing over weaknesses only at the end makes you less credible and leads to more argumentation with your strengths.
Use Strong Visuals To Prime Their Imagination For Maximum Persuasive Effect
Visual persuasion is the most effective form. If you get people to imagine where you want to lead them, they are essentially half-convinced right off the bat. “…the cash register will ring loudly.”
“If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life.”
“Don’t ask the barber whether you need a haircut.”
Cialdini’s 7th principle of influence: Unity or being one OF us.
As he and Charlie Munger get older, a major concern for shareholders has been who will take over from them. Buffett recently appointed two longtime Berkshire executives, Gregory Abel and Ajit Jain, to vice chairman roles. He calms succession fears by talking about them as unitized family members of Berkshire. We are persuaded better by people who we view as part of our family–i.e., who are of us and this will make shareholders come to accept the new leadership more readily when the time comes.
“Each has been with Berkshire for decades, and Berkshire’s blood flows through their veins. The character of each man matches his talents. And that says it all.”
Dispel Their Fears And Inspire A Sense Of Security
Anyone who puts to rest our fears gains a privileged persuasive hold on us. We automatically grow to like and trust them more.
“We will attempt to alleviate this problem by continuing our practice of publishing financial reports late on Friday, well after the markets close…”
“We have intentionally constructed Berkshire in a manner that will allow it to comfortably withstand economic discontinuities…”
“…Charlie and I sleep well.” (Superb optics, also fulfills Lesson #2)
Encourage People’s Dreams And Aspirations (Self-Actualization)
We will do anything for those who encourage our dreams and back us up rather than people who steer us towards their own selfish goals.
“In America, equity investors have the wind at their back.”
And at the end of the letter he eloquently closes with a Rudyard Kipling poem to further motivate his shareholders:
“If you can keep your head when all about you are losing theirs . . .If you can wait and not be tired by waiting . . .If you can think – and not make thoughts your aim . . .
If you can trust yourself when all men doubt you…Yours is the Earth and everything that’s in it.”
Master Persuaders inspire us, calm our fears and are one of us. They clearly articulate their vision and take genuine steps to immediately become credible and trustworthy.
If we keep it simple and follow Warren Buffett’s lead, we can all strike persuasion gold.
#Leadership, #CareerDevelopment, #Persuasion, #Influence, #DecisionMaking