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June 3, 2022

How2Exit Episode 41: Derek Gaunt - Expert Trainer, Coach & Author.

How2Exit Episode 41: Derek Gaunt - Expert Trainer, Coach & Author.

With 29 years of experience, Derek has commanded and trained police department hostage negotiation teams. An expert trainer and coach, Derek has trained across the US and around the world. He is the author of Ego Authority Failure written for Leaders....


With 29 years of experience, Derek has commanded and trained police department hostage negotiation teams. An expert trainer and coach, Derek has trained across the US and around the world. He is the author of Ego Authority Failure written for Leaders.

Derek is a coach for the Black Swan Group, the team that coaches the methods in the best selling book Never Split the Difference where he presents seminars and in-house training programs in a variety of environments. His presentations are engaging and filled with useful techniques for understanding human behavior and navigating difficult conversations. His training has helped leaders and their organizations increase their performance by changing the way they think about communicating one person to another.
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Contact Derek on
Website: https://www.blackswanltd.com/home
Link to Derek's book: https://info.blackswanltd.com/library
Youtube: https://www.youtube.com/c/Blackswanltd1
Facebook: https://www.facebook.com/BlackSwanLTD
LinkedIn: https://www.linkedin.com/company/the-black-swan-group/

As an Amazon Associate, I earn from qualifying purchases. Each purchase supports both the author and this podcast.

If you’d like additional ways to support this podcast, you can become a patron here: https://www.patreon.com/bePatron?u=66340956
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Reach me to sell me your business, be on my podcast or just share some love:
Linkedin: https://www.linkedin.com/in/ronskelton/
Twitter: https://twitter.com/ronaldskelton
Facebook: https://www.facebook.com/How2Exit
Instagram: https://www.instagram.com/how2exitpodcast/

Have suggestions, comments, or want to tell us about a business for sale call our hotline and leave a message: 918-641-4150
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Watch it on Youtube: https://youtu.be/-yy0WxJLOxk
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Other interviews:

Lane Carrick - serial entrepreneur and sold multiple businesses in his career: https://youtu.be/cAEGiqiieQw

Carl Allen - M&A Expert with Over $47 billion in deals: https://youtu.be/VIU2Lqj_FY4

Walker Deibel - the best-selling author of Buy Then Build: https://youtu.be/xoUH_Ixeook

Mike Mausteller - Business Coach, Executive Coach, Trainer, and Speaker: https://youtu.be/yYLEAfafxWc

Simon Bedard - Founder and CEO of Exit Advisory Group, M&A firm in Australia: https://youtu.be/obNiIbx5mJ0

Kison Patel - CEO and Founder of DealRoom and and M&A Science Academy: Ronald P. Skelton - Host -

Reach me to sell me your business, connect for a JV or other business use LinkedIn:
Ronald Skelton: https://www.linkedin.com/in/ronskelton

Have suggestions, comments, or want to tell us about a business for sale
call our hotline and leave a message:  918-641-4150

 

Transcript

Ronald Skelton  0:06  
Hello and welcome to the how to exit podcast where we introduce you to a world of small to medium business acquisitions and mergers. We interview business owners, industry leaders, authors, mentors and other influencers with the sole intent to share with you what it looks like to buy or sell a business. Let's get rolling.

Hello, and welcome to the how to exit podcast today I'm here with Derek Gaunt. Derek is commanded and trained police department hostage negotiation teams. He's an expert trainer and coach. Derek's worked across the US and abroad around the world. He's the author of Eagle authority failure written for leaders. Derek is a coach with the black swan group, the team behind the scenes of the best selling book never split, the difference, where he presents seminars and in house training programs in a variety of environments is presentations are engaging and filled with useful techniques and for understanding human behavior and navigating difficult conversations. Today we're going to talk about how those useful conversations and navigating human behavior comes into play when you're talking about buying companies, or working with business owners in any sense. Thank you for being on the show Derek. At least I think I got your name wrong. But I butchered your intro. So I you pass the rite of passage. I didn't get everything perfect in the first paragraph.

Derek Gaunt  1:32  
It's alright, man. It's all right. Thanks for having me, Ron. I appreciate being here. Yeah.

Ronald Skelton  1:36  
So I always like to start the show kind of give people a little bit of history or the origin story. I kind of joke and say, Man, you were born and then now you're on my show. Could you fill out the gap in between? Like, what did you do in life to have you end up on a mergers and acquisitions podcast?

Derek Gaunt  1:52  
Wow. So the skills that we espouse at the Black Swan group were born out of hostage negotiations. And that's where I cut my adult teeth. I spent most of my 29 year career as a part of hostage negotiations team. So walking you through it, I started my career in 88 became a negotiator in 97, Team Leader 2001, team commander in 2004. And that's position I held up until the time that I left and in that time, I met Chris Voss right around 2000 2001 When he transferred from the New York Field Office to the FBI Academy down at Quantico, which is where their crisis negotiation unit is. And that was 35 miles south of the city where I worked. He was heavy into the discipline, I was heavy into the discipline, we had mutual acquaintances, they introduced us. And the rest, as they say, is history. So I started with him in about 2010, on a part time basis came on full time, in 2017. And being with the black swan group, as you alluded to, has allowed me the opportunity to travel the globe, preaching the gospel of the Black Swan method. So that's how I wound up on how to exit.

Ronald Skelton  3:08  
So let's just for anybody that God forbid, has never seen the difference split the difference book and don't know what the black swan method is, can you give us the high level view of your negotiation strategies and what it's what's different about Black Swan? 

Derek Gaunt  3:25  
What's different about us is we pay particular attention to the human nature response. The human nature response dictates that negative emotions and negative dynamics drive decision making, and the drive behavior. And the sooner you get your head wrapped around that concept, you put yourself at a distinct advantage, because of the people that you interact with now become more predictable. You can start to predict what they're going to say, and what they're going to do next, based on your appreciation of that human nature, response. And it involves what we call tactical empathy. That's the foundation upon which all of the skills are built. And tactical empathy is just you, not only recognizing the perspective of your counterpart, but articulating that recognition, because you see, you can recognize all you want, but if you don't articulate it, I don't know that you understand me. And if you don't understand what my world of view is, it's clear that you don't understand me if you don't understand me, your meaningful dialogue is not going to take place. And so it's all about understanding what the lay of the land looks like, from our counterparts perspective, to not look at the counterpart as an adversary. But looking at them as a teammate in a problem solving venture, whatever is at stake, whatever the problem is the adversary. How do you make that counterpart a teammate in a problem solving venture that will help you resolve the issue? That's, that's our mindset.

Ronald Skelton  4:57  
I got it and I can see the parallel right a lot of people, if you look at like hostage negotiation, that's a life or death, you know, high stress environment. But if you really look at, you know, a business owner who's owned their business for 20 years, he's thinking about selling, that they've tied a lot of their identity and who they are as a human being to this company. So they're almost almost like, say there's an ego death or there's a, there's a process that they have to go through in order to say they're done with this and put it away. And then you it's very emotional. It's very, I wouldn't say it's nearly I wouldn't say it was nearly as high as stress as a hostage negotiation. But as far as a business negotiation, that's one of the toughest things that owner can do. If you go ahead, great. I was, I was gonna go with you, you can you can respond to this. If you fail to acknowledge that human aspect of it, you're not going to get through to the end of it. I just don't think you can.

Derek Gaunt  5:56  
No, you can't, you can't. And in large part is you getting out of your own way. Stop worrying about what your goal and objective is you're going to objective is what it is right now. But based on the dialogue, that goal and objective could change, don't be so focused in on where you want to end up that you wouldn't take something better if it came along. And believe me, if you're listening in, I'm talking about listening on the deepest level, I'm not talking about surface level, listening, that's where most of us do our dancing, we're listening, we're listening intermittently, where we're just listening long enough to get the gist of what the other side is saying before we refocus on our own internal monologue. Or we're doing what is termed rebuttal listening, where I'm going to listen to you long enough 'til I hear something I can argue with. And I'm going to wait for you to shut up. So I can jump into the conversation to show you how brilliant I am. And that's where most of us do our dancing. Because we fail to realize there are different levels to listening. And at the deepest level is empathetic listening, that's where you're, you're listening for emotion, logic, identity issues, what they're what it symbolizes for them, what it means for them in the world, and you spoke to it a couple of seconds ago, you know, hostage negotiations are high at stakes. They are the highest of stakes conversations on the planet. In your merger and acquisition conversations, the stakes might not be as high. Lives are not at stake for you, but livelihoods are. And anytime you engage in a conversation where I want or I need is in your head, or I want or I need is in the head of your counterpart, there are going to be negative emotions attached with that. A person that's built their company from nothing that gets approached by a prospective buyer. Yeah, there's a lot of identity issues there. And we ignore those at our own peril. Because the other side is screaming, there are identity issues, and we don't want to touch it, because we're afraid of getting it wrong, we're afraid of offending, we're afraid if you point a light at it, it'll spark a thought in their mind, and they'll pull out of the conversation and or transactions. And so we ignore it. And negative emotions and dynamics unexpressed never go away. So just because you ignore it doesn't mean it's not there anymore. Just because you ignore it doesn't mean it's not bouncing around, bouncing around in their head. And then at the end of the day, your brain works up to 31% better when you are in a positive state. So it would be foolish of you to engage in those conversations, not trying to put your counterpart in a as positive state as you can.

Ronald Skelton  8:28  
You know, I caught on to something you said there because I used to be really bad. I mean, really bad about not listening fully. I mean, within a few seconds of somebody speaking I was already engineering like this, you know, this, this response. And it was, I'll admit, right here on the show is from my own insecurity of wanting to be the smartest guy in the room, having to give that up, enabled. And I before I before I heard about the Black Swan group, I did a program that helped with communications and help with listening. And one of the things that the lady said is the order to stop your own voice in your own head, what she wanted me to do was to repeat every word that person said in my own head as they were saying it, and it's a temporary fix because it shuts off your ability to start formulating your response. So I use that now if I'm if I catch myself keep going off on like what I'm going to say next, I just start repeating what the person is saying to me in my own head until I can actually go back into a mode of listening without having to do it. So

Derek Gaunt  9:29  
Yeah. And probably an easier hack for you because that's that's very difficult to do to try to repeat the words in your own head as they're coming out of the mouth of your your counterpart. An easier hack for you guys would be just stay curious in the conversation. Assume that you have something to learn. Assume that you have you don't have all the answers because the reality is you don't. And if if you go into a conversation making up your mind, I'm going to say this I'm going to say this I'm going to say this I'm going to find out what their logic is I'm going to poke holes in their logic, and I'm going to bring them around to my side. You're preparing yourself, for what you want to say, when in reality, you should be preparing yourself for what you should be listening for. When you when you make up your mind where you want to end up, you have blinders on, and you're going to miss things that are important to you. And as I mentioned earlier, don't be so sure about what you want that you wouldn't take something better if you came along. Everybody that you talk to, is hiding information from you. How do I know that because you hide information from people. And if you're doing it, you better believe they're doing it on the other side. So think about this for a second, Ron, if you've made up your mind, where you want to end up at the end of any negotiation or difficult conversation, and you're married to that to the point where you're just being rigid, you're doing so knowingly and intentionally based on incomplete information. How crazy is that?

Ronald Skelton  11:01  
It's insane. But we do it. I mean, on a day to day basis as human natural behavior, we live our lives doing that to other people. I honestly think that one of the fallacies in human behaviors were never really taught how to, to listen fully, to actually to hear another human being and get where they're coming from, before we respond.

Derek Gaunt  11:25  
As a variety of fact, there's that play into that. You know, it's we're in a microwave society, we're looking for instant gratification. So everything is rush, rush, rush, rush, rush. And with the black swan method, we're intentionally slowing you down, to speed you up.

Ronald Skelton  11:40  
I love it. The one of the things that a lot of the mentors in this space teach you is it's a numbers game, right? If you want to, you want to buy a business, you've got to go out and talk to 100 business owners qualify, maybe three to five of those have deeper conversations with them. And then one of those will close. And I think the reason is, a lot of it is is that misaligned. And, you know, expectations, right? I think that really happens in a lot of these, if you're playing the numbers game, you're trying to talk to 100 business owners, so you can get close on three and close one is, there's a pretty good chance you're not taking the full, you know, listening of the other individual. You're not hearing what they're trying to get to and what they're trying to achieve.

Derek Gaunt  12:29  
People will tell you exactly where they're trying to go and what they're trying to achieve. Even if the words never come out of their mouth. You're going to pick up things do not ignore what your subconscious is telling you about the circumstances about the conversation about the environment. Your subconscious, your intuition has kept, its kept us alive for 1000s of years. Pay attention to it, it's never going to let you down. Your subconscious brain processes 20 million bits of information, I'm sorry, bytes of information per second. Your conscious brain only processes 40. That's you picking up data from the other side that you are unaware of. And so when you slow down and listen to your subconscious, you're going to pick up on the signals that are telling you you know, I grow so weary about this term, all of a sudden, unexpected out of the blue. Let's talk real estate for a second, three months, four months working with a client, your week outside of closing, and all of a sudden the client wants to bail. And you're pulling your hair out or going all of a sudden, I can't believe that's how hard I've worked all of these three months. And now all of a sudden he wants to pull out. It's not all of a sudden, he was sending you signals throughout the entire three month interaction that you fail to or deliberately ignore because of what? Fear. Fear of being a negative emotion, single biggest driver of human decision making and behavior, you are afraid of losing the business. So you ignored the signs. And then ultimately, the deal blows up. So my point for that ramble is you're going to pick up signs, don't ignore the signs. People have a hard time articulating what's going on with them on their side of the table. And so they don't always say it, but it'll manifest itself other ways. And it's as much a part of their communication as anything else is any word that would come out of their mouth. They're looking for you to pick up on those red flags. And when you don't, the deal falls through.

Ronald Skelton  14:41  
I get it. We were working on a big project last year and usually we were we are doing what's called a roll up or buy in multiple companies in the same industry. And usually the CEO and myself I was the technically I was Chief Marketing and Sales Officer for this roll up. And we'd have at least two was on each of the calls because it helped with the conversation. So what what I, what I tried to do is train everybody, if you're the second on the call, like if you're not like if the CEO was on the call, usually he carried the conversation. My job was to not have just like right now it's just me and you we see each other, I'd have the zoom call set where I can see everybody in the room. Right? So but if you're the speaker, you're engaged in the conversation, you're thinking of what your next question is, a lot of times you missed that stuff. So we, we, we tried to train the second guy to be what we refer to as the dedicated listener. So

Derek Gaunt  15:35  
That's very smart. And I don't know if you if you picked it up from the book or not. But that's the same way that we're training our corporate clients and individual coaching clients is that if you can control the environment, you shouldn't go into these conversations by yourself. Because to your point, if you're talking, you are a human being, which means you are going to miss things. And that secondary person is there primarily to pick up the things that are important that you may have missed. So the kudos to you.

Ronald Skelton  16:07  
I definitely got it from the book, I'll tell you, I took that book to heart so much so that we have a school here we teach real estate investing. And I used to teach the course on negotiations. And after going through your book, going through the footnotes of it, studying it from every angle, I could get too short, I don't think I know I haven't went down to the course i'll probably schedule that this coming year. I was getting ready to do it when I was doing the mergers and acquisitions stuff and COVID hit and I if it wasn't online, I didn't do it for a while. That, uh, the I took everything I was teaching out of the system and pretty much taught word for word like, you know, this footnotes version of, you know, and I would give him your book. And I would say like, read this book, study this, you know, take the Cliff's Notes version. And let's put this to work. And it made a huge difference. It made a big difference. The building I'm sitting in here, right now was a product of that. We were negotiating, buying this business by buying this building. And the owner. The owners husband leans back crosses, his arms started shaking his head. And the guy I was with negotiating with we had a partner there, of course, like two person team at all times. He was reading the contract, often this guy was shaking his head. So I stopped everything to say it looks like something's changed. You know, I see that. You look visually upset, your arms are crossed, you're shaking your head, what's going on? Oh, that's nothing. It's nothing. It's like, why don't you guys, they said, why don't you guys just rent instead of buying it? I was like, Well, clearly something's there. There's everything's on the table. Nobody's signed anything yet. So tell me what's going on. And this gentleman said, Well, I put $25,000 down. And if you guys take over the payment, I lose that 25,000. And I have to tell all my friends, I lost money on this deal. And this is an Asian gentleman and his, his persona or what do you call it, his face, or they call it is important. And I said well, so I let the other guy continue to talk. And I pulled out the calculator start to do in numbers, and it still made sense. I tapped him on the shoulder. I said that still makes sense. You mind if I propose something? And the guy still say it, you know, maybe she could just rent let's not let's not sell the building. So what if we take that 25,000 We just add it to the end of the mortgage pay for another four or five years? And you get your money back? You know, it doesn't affect how much we're paying per month. So we can still cashflow, bill it pretty easy. It does extend it for four or five years. You know, but let's just make sure that you get your 25k back out of out of the deal. It's still a great price for the building. He says okay, let's do that. And that was the end of like him wanting to shut it down and make us rent the building instead of buying it.

Derek Gaunt  18:40  
So Ron let me ask you something. The shaking of the head, the folding of the arms, the slouching in the seat? What if you had ignored that and let your partner continue to plow through the contract. You would have met renewed with resistance and no signature at the end of that conversation. That's what I mean by the red flags. They're going to be waving them at you. Pick up on it, acknowledge it. Give him a chance to explain and he did. We all have this on,almost it's almost an insatiable desire to have somebody else understand what position we're in what we're going through. And you did that. And that's what that's what broke that log jam.

Ronald Skelton  19:28  
Awesome. So I, let's jump right into like the process here. So we're actively listening. We're employing tactical empathy. And, you know, in this case, we're talking about a business owner who maybe have run their business for five or more years, maybe third generation. I've talked to business owners where the business has been in that family for 63 years. There is an enormous amount of emotional attachment to that. You know. If you're by yourself, what are some of the key things you can do to pick up on that verbal cues and stuff.

Derek Gaunt  20:06  
The first, the first thing that I mentioned earlier, but it bears repeating is curiosity, curiosity, curiosity. Assume that I don't care how long you've known this person, how long you've worked with this person, five minutes, five years. In this conversation you are going, if you're listening well enough, you're going to uncover things that you didn't know. before. So the first thing is mindset. Ask yourself, before responding to a question before responding to a statement, that doesn't make sense. Ask yourself, why did he just say that? Why did she just do that? That's not a question you're going to ask them. But that's the question you should ask yourself, because motivation is the key here. What's motivating the statement, what's motivating the behavior. And if you're, if you're gonna stay curious, the curiosity will help you uncover those nuggets we call the black swans, those little pieces of information that if you uncovered when it dramatically changed the course of the conversation and the ultimate outcome. So it puts you in a great position to be on the lookout for those. But also, the curious mindset will prevent you from getting triggered during the conversation. If you are in a negotiation, that by default is a difficult conversation. Why? Because somebody wants or needs something. And if there's a want or need, that means that there's going to be an imposition on the other side, and imposition changes the status quo, the status quo is filled with uncertainty, uncertainty makes us afraid, fear single biggest driver of human decision making, right that's one of our laws of negotiation, gravity. And so I'm always ready to jump in and figure out why where's that statement coming from? If you if you can't think of anything else to say in that moment? Sounds like you have a reason for saying that. They ask a terrible question. Sounds like you have a reason for asking. It's great with dealing with questions that don't make sense to you questions that come out of left field questions that catch you off guard? And usually, the question doesn't line up with the realities of the environment. People don't ask great questions, they'll ask you question A, they want the answer to question B. But for whatever reason, they're reluctant to ask you question b. So they ask question, a. And so before you guys get yourself a new trick bag by automatically volunteering an answer, let's if you don't understand the motivation, let's make sure we were crystal clear on it. So before you answer the question, your response should be, it sounds like you have a reason for asking.

Ronald Skelton  22:51  
You know, one of the things I've said and maybe I get some coaching here is, you know, it's interesting of all the questions you could ask me, What had you asked me, XYZ, right now? And it's kind of like kind of somebody says something out of the blue and like, you know, along that lines, I fire that's, that's my canned response typically is out of all the questions you could have asked me, what had this question up here? Is there a better way to?

Derek Gaunt  23:15  
No, that's not bad. That's not bad. I now, if you notice the difference between what you said and what I said is I put it into label form, which is one of our techniques. And I do that largely, because there's a full third of the population that doesn't like direct what how questions, you can start to actually shut them down if they feel like they're being interrogated. And so a label with a little bit of mental acuity can be turned into a question. And so what you said was, was tantamount to what I said, except you use the word what and I just said, it seems like we are moving. Since the book was published in 2016, we have been moving further and further away from asking direct questions in order to uncover information for that reason. And we're using what and how questions primarily to shape people's thinking, to have them get into a problem solving mode to engage their critical thinking. And so when we want to start to talk about what the next steps are, we're going to what and how those next steps to death. And that's usually at the back end of the conversation. On the front end of the conversation. We're trying to allow them to express all of the negative emotions and dynamics that they have associated with this conversation. And so we're using labels to defer. And we when we sequence the conversation like that, because people are incapable of deep thought, if they still have something they need to get off their chest. And so that's why you hear us use phrases like deferring to the other side, subordinating yourself to the other side, putting your goals and objectives on the back seat until such time I'm in the conversation when it's time for you to share information with them. And what that does is that's that's the first steps towards tactical empathy. One of the most one of the strongest components or characteristics of tactical empathy is that it encourages reciprocity, I'm going to do it first, because I'm going to call it in, when it's time for me to make my ask or draw my line in the sand or present my case in chief.

Ronald Skelton  25:25  
You know, the the only thing I know about hostage negotiation is the BS we see on TV, right? And I, they may be us they're right or wrong. But I've got this, like, the image of very short, brief conversations that you had, like, you call them and you're on the phone for 45 seconds to a minute and a half, and then like, then you get off the phone, you have chance to analyze it and stuff. What is it like in real life? I mean, did you actually have longer deeper conversations with these individuals? Or how does it?

Derek Gaunt  25:53  
Well, I'm gonna give you the standard hostage negotiation answer. It depends.

Ronald Skelton  25:58  
I do as funny, when I asked the question that, like, he's gonna tell me it depends.

Derek Gaunt  26:04  
And so what does it depend on? If they're actually holding somebody else against their will, I'm going to limit the amount of time that they're off of the phone with me. And so I'm going to, I'm going to keep that conversation going longer than maybe I would lone barricade guys in a house threatening to kill him, he's going to he's going to burn the house down, and he's already fired off a weapon. All right, well, he's by himself, that that incident, the dynamics are different, it's got time to cook a little bit. And so we will, we will break contact with a lone barricade often. You know, have him go to the bathroom. Have him get himself something to eat. Have him calm down whatever the case may be. And so it really depends on who we're dealing with, and what the other dynamics that are at play, but it's not, when they're holding someone against their will, we're not going to break conversation as frequently as we otherwise would.

Ronald Skelton  27:04  
So the reason or justification behind my question was, and negotiating buying businesses, a lot of it's done right now, at least in the beginning stages, and with COVID, made it a lot easier on Zoom calls, and on the phone. And the first call is usually scheduled for at least 30 minutes, or often an hour, right. And I've caught myself in really well and on track with tactical empathy at the first part of the call, but then you get kind of tied up into a conversation, and all your training slips out, you go back to human behavior. Would it be better in that situation where you're trying to, you know, build rapport, understand where they're coming from, to schedule shorter calls, or just keep training and get better at having an hour conversation and stay in it stay in, in, staying in the conversation stay in, in the in that, that listening mode?

Derek Gaunt  28:00  
You know, on your first call, the first call of from my perspective, shouldn't should not involve a pitch at all. Your first call should be information gathering, and the beginning of your demonstrating of tactical empathy. And then you're gonna thank them for their time you can you got their friends, thank them for their time. And you're going and you're going to disconnect the call. And that engages that fear, that fear of missing out that FOMO, right, the fear of loss, right? Because they're fully expecting you to pitch them. And you in that first call, and you haven't pitched them, you're thinking that was weird. I've never had a guy handle me like that. I wonder if there's, if I'm missing out on an opportunity. Now, you haven't even scheduled a subsequent call, you will call obviously, within the next week or two. And the conversation should be more substantive. But the fact that you didn't try to pitch them or close them on that initial call automatically makes you an outlier. You're automatically now viewed differently than every other person who's in the same space as you. And that's what you want. You want to be able to differentiate yourself, subconsciously, you've done that with your counterpart when you when you in that 30 minute call, and there's been no promise to do anything. And then when you call back, because of that fear of missing out has been initiated, they're more likely to be more collaborative with you in that subsequent call. Returning the favor to you ie the reciprocity. And so now they're going to be more susceptible or not more accepting, I should say, of your of your pitch of your ask, etc.

Ronald Skelton  29:46  
So, it that might be why I slipped in my old way of being and halfway through the call because the first 30 minutes I do pretty well. It's like, I usually start off a little you know, tell me about the business tell me the origin like you know, tell me about what you created.. And I really kind of I want to hear and it's firm a very authentic point of view. I want to hear how you created what you created, why you created it and the story behind it. Because to some extent that legacy is as important to most of the sellers as the money or anything else. Right? Yeah. And if I had never asked that I've been through deals where I set with other acquisition entrepreneurs, and they never even asked, Well, how did you start this? Where did it come from? They jumped in a little show me your balance sheets and everything. And it just it went nowhere. We never got to third and fourth call, the guy just wasn't interested in working with us. And I just, I would tell the, the new guy that asked me to be on the phone with him was like, stop doing that, you know. I'm honestly sitting there thinking maybe my first call should just be 30 minutes, like, hey, let's spend 30 minutes and figure out where you want to go. Like, what is it you're trying to accomplish? What is your Tell me, tell me a little bit about the business, tell me why you started it, and what you're wanting to accomplish here. And let's just go from there. And in the call at 30 minutes, having some basic knowledge where they want to get to, and then align a second call with helping them get there, right, whatever it happens to be. I'm a big fan of that. Anyway, I tell people all the time, look, I'd love to get on. If you're thinking about selling your business, I'd love to get on a phone call with you, or a zoom call, I can't promise you, I'm the buyer. But I've got a heck of a network. And I probably know somebody that would be interested in and I'm generally intrigued by that by business in general. So I'd love to hear about, you know, who you are, what you've created, what you're trying to accomplish with it. And if I can pair you up with somebody, you know, I'll either one up myself, or I'll, I'll reach out around and, and figure out somebody that would be a good match for you. And that's how I start a lot of the conversations. But if I scheduled for an hour about 30 minutes into it, I catch myself trying to pitch right, you know. Well, we'll preserve your legacy will preserve, you know.

Derek Gaunt  31:58  
Yeah, and here's the thing. Is, this, I am not advocating you throw your pitches out of the out the window, you're gonna have to pitch them at some point, right? It's just where do you do it in the conversation? The sequencing is very, very important. The normal sequencing is I want to go into the room with all of my data and information to the to the counterpart say, here's why you should make this decision. And we get pushed back, and then we're left and you're left scratching. And you're saying, I don't understand why he's pushing back. It's all right here. It's in black and white. Because you haven't taken the time to talk about, like what you said, legacy issues. It's never about the money. When people tell you no, it's never about the money. It's never about the terms. It's always about what they stand to lose the example that you gave earlier, it wasn't about 25k. It was how he was going to look to the people that he was associated with. It was about reputation, it was about his status, it was it was about saving face. And the sooner you get off of the spreadsheet, and focus on that, first, the quicker you can get back to the spreadsheet.

Ronald Skelton  33:09  
Let's talk about some some a little bit about the safety inside and know there's a big concept inside of the book about not trying to get them to say yes, you know, yes, there's there's a lot of sales techniques just as if you get them Bob and like a bobble head and they go yesterday, the whole thing that when you slide the contract underneath that they're just gonna sign it. And it's utter bullshit. I'm gonna I'm gonna use my French here. It's, I don't believe in that and one bit, you know, I think the whole time they're nodding yes, they're also in their head gone there ain't no way in heck, I'm doing this right. That's what this doesn't match the language in their head all the time. So never split the difference. The Black Swan group you guys teach this? You know? No, it's not a negative thing inside of a negotiation. That's a tool that you can use. So

Derek Gaunt  33:53  
Yeah, it's where it begins. When you get the "No". Because the no is always camouflaging something else. There's always something else behind the No. To your point though. We as a society, we are yes addicted more importantly we are yes battered. If you and I were to sit down in the conversation about you acquiring my business I would be able to pick up almost instantly when I felt you start to drive me for a yes. This concept of what you're talking about is mere mere M er e agreement? Yes, it will propositions yes momentum. Most of these concepts were developed in academia where they have a laboratory full of graduate students who were trying to get their degrees and and they were being graded on whether or not they came to an agreement during negotiation exercises and they and they said that this is yes momentum meaning if I get Ron to say yes to me, multiple times, about anything. When I get to the big ask increases might I've increased my chances of getting you to say yes, but the problem with that is that most people feel it when you're driving them for yes. And they resent it. They resent it. Because yes, it's always obligation and commitment. And no one likes to be obligated or committed to something that they have not volunteered for. And you driving me for, some people, there's one, there's one person in the negotiation world who actually refers to these as Yes. Tie Downs. Think about that for a second, you're using Yes, to tie people down? How does that How do you think that makes the other side feel when their autonomy is encroach to the point where you are actually tying them down? And so any yes oriented question, any any question that you could ask where you're driving for? Yes, two millimeter shift, you can make it into a no oriented question. And it boggles my mind how many people will agree to something when you allow them to say no, that they otherwise wouldn't agree to if you were pushing them for, a yes. So the two things about no is no is always protection. Yes, is always commitment. The other thing about the know is, it's always a camouflage for something else, when when they tell you know, when they say do this, or else when they say take this out of the contract, and we're not going to sign when they say I need this by Thursday, or the deal is off, that all of that stuff is instant, incidental. But to us, when we hear it, we freak out, right? We go back to our people say, Well, we got to take this out of the contract, or that we're going to lose the deal. No, you're not. And so no, you don't need to, what you need to do is figure out what are the identity and emotional issues that are attached to that take this out of the contract, or I'm not going to sign what are you missing on the surface? Sounds like that person is under tremendous pressure on his side of the table to get this exactly right. That's what they want you to acknowledge. So do it. And so no one's protection. Yes. It's commitment. No was always a camouflage for something else behind what's actually going on. Always look for motivation, motivation, motivation.

Ronald Skelton  37:21  
One of the most effective things I ever picked up out of the book was a no thing. And it was on the email sequence. And I, anytime I've set up a first meeting, it i There's times many times where I thought the first meeting went well, and then you're having difficulty scheduling the second or follow up call my favorite subject line on the emails. So So I take it, you've given up on selling your business. Right? That Oh, no, I haven't given up on selling the business. Oh, okay. Well, I've been trying to reach out to you and scheduled a call but that the initial thing is something along the lines will have you given up on this deal?

Derek Gaunt  37:55  
Yeah, yeah, it perfect and subject line only. Yeah, somebody has ghosted, you subject line only. Had you given up on selling your business, send it, don't put anything in the body of the email. Now, my caution to you and everybody who's watching is don't send that email unless you're ready to talk right then in there. Don't send it on a Friday and assume that they're going to get back to you on a Monday because as soon as that thing gets their box, the potency of have you given up on the words are specifically designed to generate a fast response. Why? Because it's an old oriented question your you want them to say no, while agreeing with you. The second thing is no one wants to look like a quitter. No one wants to look like they've given up on anything. So I send that out, have you give it up on x. And I think the longest that I've had a client had to wait was 72 hours. And that's only because the person that she was emailing was delivering a baby. That's what took her so long to respond. Most people when it hits their box are going to call right away.

Ronald Skelton  39:03  
And say I was very cautious with what I did. It's funny, you brought that up, because it's very, very true. I'm very cautious before I hit the send on that I look at my calendar and make sure I don't have anything scheduled for the next hour or two. Because there's a good chance most of these guys have my phone number by now. There's a pretty good chance he's not going to email me back. He's going to pick up the phone and call me right like right then and there. It's usually a short call it is like hey, I haven't given up. I've just I've been traveling, I still want to chat with you. You know, here's my assistant, have them working, get something on the calendar. They clear it up right away. And I liked the dynamics of it just because I've seen cases where like, I'm not gonna send that out. I'll send it out next week and I'll send it out. I'll wait a couple more days. And then the second I you know, I send it out it's back on track.

Derek Gaunt  39:49  
Yeah, another one that you feel free to use is in the subject line only. It seems like I've done something to offend you and send it. That one generates a lot of bugs very quickly. Because they want to get back to you and say, No, it's not you. It's whatever, you know, my house caught on fire. I couldn't, you know, whatever. But seems like I've done something to offend you, or have you given up on usually generates very, very quick response. Now something else that you mentioned that I wanted to touch on before we move on, is you in that conversation with the promise of them doing X in a certain amount of days, and a certain amount of days go by, and you don't X has not been realized, before you and that first call? You want to test because what you've been given in essence is in agreement, I agree that I'm going to do X in a certain number of days, if it's, even if it's just calling you back for a subsequent conversation. You want to test that agreement, at least twice. So you tell me, Derrick, I'll get back to you next Wednesday. And let you know what my decision is. Before I let you off that phone, I'm going to hit you with a label. So it sounds like next Wednesday is a better time for you. And your response is going to be yes. So it seems like you want to take the weekend, mull this over. And then sometime Wednesday afternoon, at the latest, I'll receive a phone call at the very least an email from you letting me know where you stand. And you get a head nod or a yes, again, I'm pretty confident that you're going to follow through. Because I've made you in essence, give me a public promise that you're going to do something people generally speaking, not all, but generally speaking, like to be consistent in word, thought and in action. And so it's going to be harder for you, you're going to be under a tremendous internal pressure not to fulfill your obligation. So tested at least twice more. And you will see that the numbers of times that you have to deal with people who ghost you, after several days will decrease.

Ronald Skelton  42:05  
How many? I mean, you get I bet you get in the black swan group, you guys get a bunch of different a variety of different people coming through here. We were talking about the, you know, the No, and like, where, where the we're, we're listening, actively listening to the other person and getting them to confirm right to confirm an appointment to, to do that. I really believe that. In today's society, the premise of a promise has been lost in the 20s. And the 30s. That was your credit score, right? You said somebody gave somebody your word, and you didn't the word got around the banquet and loan to you anymore. And nowadays in time, it's it's the instant gratification. That's not necessarily true. And I think that the who owns a promise has slipped away. And in my, you know, my belief inside of this is if you and I are talking and we've made that agreement. And I say I'm going to call you Wednesday by four o'clock and tell you my answer. I've made a promise to you. But I'm also expecting you to hold me to account for that promise. Right? Yeah. Yeah, those are gone. It's not it's not that's not necessarily true anymore. People are so afraid to have, you know, non hostile confrontation. I hate the word use confrontation. But I don't know a better word. Like, Hey, you said you call you know, I do it. I do it regularly. Hey, you said you call by By four o'clock. You know, it's six o'clock in the afternoon, I'm going home for the day they did decide not to do the deal. Or you know, what's going on? What do you think about like, how do you handle it? When it doesn't happen? Is you wait for the did you give up on the deal? Email? Or what's your?

Derek Gaunt  43:57  
No, if if, in the scenario that I just set up, if you haven't gotten back to me, by the appointed time, then Thursday, I'm going to send that email and try to jumpstart the conversation or at least figure out you know, what's changed what has happened between today and Wednesday that led you to not get on on the call with me. So I'm not going to I'm not going to wait too long. If four o'clock Wednesday rolls around. I don't have it in my email box. I'll let it sit until the next morning and then I'll fire off and then I'll fire off that email. But again, if if you're it's really important, because these people, a lot of people that ghost you don't do it because they're bad people. They don't do it maliciously. They just don't know how to say no. In fact, again, there's a third of the population that will tell you yes, and they got no intention. But in the moment you'll get your yes because they don't know how to tell you know in the moment and the relationship to them in the moment. is the most important thing. And so while they're not bad people, they just have a difficulty disappointing. And they don't want to disappoint you on a phone call face to face, it'd be easier to disappoint you over email if they do it then. And so that's one of the reasons why we prompt them after after having been ghosted.

Ronald Skelton  45:23  
In the aspect of buying and selling businesses, I find that if they are ghosting at that point, there's typically something I've missed your eye. So my first email be like, hey, you know, might be something along the lines, say, I was expecting the answer. You know, by Friday at four o'clock, like you said, I'm getting the, you know, instead of like, how did I offend you? Did I miss something? Is there a big element missing in this conversation at this point? And I

Derek Gaunt  45:53  
would caution you don't do it over email. Okay. Use that one line email to generate a phone conversation or a zoom call this idea of handling trying to manage conversations via email. While it's convenient. And it's easy, it's counterproductive?

Ronald Skelton  46:12  
There's no context? No, no,

Derek Gaunt  46:15  
there's no context. And I will tell you that even when there's no context, even when there's no tone in your email, they are going to read a tone in your email. And it could be dependent on something as minor as what mood they're in when they open the email up. And so without that context, you just going back and forth over email, you just lose too much data. And this is another thing that's prevalent in today's society, the reluctance to get on a voice to voice call.

Ronald Skelton  46:49  
Text messages, I'll put text messages right in there with emails, right? There's no context no tonality, no expression of emotion that that is authentic, that you can put in an email. I don't I don't care how good of a writer you are. It's just way too. It's too flat. It's just there's no dynamics for the context or the tonality. And, you know, I'll get the number wrong. But that's what is that they Oh, that's something 80 plus percent of communication is non non written. It's visual. And yeah,

Derek Gaunt  47:24  
Yeah. It's actually, it's actually 93%.

Ronald Skelton  47:27  
I knew you know, the answer. I know as to get the number wrong. But it is never wrong to correct me on the show. I'd rather the audience walk away with the actual number than you just not even going that this guy's way off. 

Derek Gaunt  47:39  
Yeah. 

Ronald Skelton  47:40  
So we're running. We're running towards the top of the hour here. I was wanting to try to get into that use calibrated questions, the how and what? Can we do that briefly? I mean, that's that's a big topic. But

Derek Gaunt  47:53  
Yeah, so the calibrated questions, we are reserving those for thought shaping, sort of like the Socratic method, you know, what was Socrates trying to get his students to do? He never answered their questions, he would ask another question to their question to get them to think about what the appropriate response. It would be. That's, that's similar to what we're thinking about. As far as questions are concerned, you've grown up knowing how to ask open ended questions. So we don't spend a lot of time training people how to do that. Just training them where in the conversations, they are most appropriate, and they're most appropriate, after you've taken care of the negative emotions and dynamic aspect of the conversation, so that you free up their brain, I don't do brain up, again, works up to 31% better when it's in a positive state, which is why we're going overboard on tactical empathy on the front of the conversation. And then once their brain is unlocked, unleashed, so to speak, they become more cerebral, their cognitive ability has been improved. Now I'm going to get them into thought shaping problem solving mode, with what and how questions, particularly on implementation, what is this going to look like going forward? What what's what's the next steps? How are we going to know that we're on track? What do you intend to do if we're off? What is it that I need to do in order to help you convince the people back on your side of the table that this is the right move? Those are all what and how questions designed to get the other side to lay out what the next steps are. Then laying out the next steps means they're more likely to adhere to it than if you say, well, here's what here's what I was thinking. And so that's, that's where we're putting our calibrated questions now on the back end of the conversations, when we are trying to talk about implementation next steps, or get some other commitments from them, and we're using labels to uncover information.

Ronald Skelton  49:47  
I get it. So I've asked a bunch of questions. We've spent nearly an hour on the show. Is there anything I missed? There's unlike any questions out there, man, we really should have talked about this.

Derek Gaunt  49:57  
You know, you mentioned something earlier. Hey, where are you, we're talking about someone who says they want you to reach out in 100 businesses qualify three to five and close one. That's a success rate of 1%. That's a success rate of 1%. And so food for thought. And I'm not blowing smoke, I'm not patting myself on the back in the United States, hostage negotiators have a success rate of influencing people into doing what we need them to do, of 93%, close to 93%. That is to say, close to 93% of the time that we get called out, we are able to influence someone into doing something that they initially tell us they don't want to do, which is to surrender. And compare and contrast that to 1% out of 100. Businesses engaged. That's craziness. And it's not because we're smarter than you guys in m&a. It's because of what I mentioned earlier, we have a keen appreciation of that human nature response.

Ronald Skelton  51:04  
Awesome. Well, I appreciate it. And that leads up to what is it that you, myself or my audience can do for you? 

Derek Gaunt  51:13  
Oh, you guys can buy the book, Ego Authority Failure. it's on Amazon Kindle, it's got we got an audio version out. You don't want to spend any money, go to the Black Swan, groups website, black swan ltd.com. As it appears there on the screen, we have a boatload of free material free resource sources on there. That'll help you sharpen your blade. I don't propose to tell you how to do your business. You've been doing what you've been doing for years. And you've obviously have been successful at it. So you know, what you're doing. These are just tools to make what you're doing better to sharpen your blade to make you more money to have you stop leaving money on the table to have you stop and running scared when you hear an objection or push back and really focus on what's driving the push back. And so make yourself available to the resources, the blog post, the YouTube channel, and then you know, if the spirits so move you we've got live events going on all over the country, pick one, come see us, you get a lot more interacting with us live than you do via a screen like this.

Ronald Skelton  52:24  
You guys got one coming up, I think on June 6 in Dallas, and then another one coming up in Chicago, right?

Derek Gaunt  52:28  
We've got a two day in Dallas on the second and third. We've got a one day in Dallas on the sixth. And then yes, we got a one day in Chicago. And then I think we're gonna head over to the west coast in the fall. So we're be bopping around a little bit now that restrictions have been lifted.

Ronald Skelton  52:44  
I'm gonna move to the west coast here shortly. So maybe I'll pick you guys up when you guys are out there. Because even though because more than one country.

Derek Gaunt  52:53  
Yeah, well, I think the gas is only $8 A gallon there. So

Ronald Skelton  52:58  
It's one of those things my wife and kids are going to joke around nervous, like, why would you move back to California live in an area that's way cheaper to live? I was like, Well, my wife said that her and her kids are moving to California and they invited me to come so I probably ought to go.

Derek Gaunt  53:12  
I've had that conversation myself not about California. But elsewhere. I'm believing you can come if you want. I said all right, I'll be there.

Ronald Skelton  53:18  
I'll be there. So she has family out there. Some of the family would, you know, enjoy our presence and our kids would be benefit greatly from being able to be around grandpa stuff. So we're going that way. So I appreciate your time here today. Let's, let's call this a show. And hang out for a couple of seconds. And I'll, we'll chat for a few seconds and we'll be done. 

Derek Gaunt  53:40  
Thanks, Ron. Appreciate it. 

Ronald Skelton  53:41  
Thank you. And that's the show, guys. Hey, it's your host Ronald Skelton. I want to thank you personally for watching the show today and invite you to call our new hotline 918-641-4150 That's 918-641-4150 Call us and tell us about our show, ask questions, suggested guests or even tell me about a business you have for sale and we'll reach back out to you again that number is 918-641-4150 call our hotline leave us some information. Thank you, the investors and entrepreneurs professional mastermind. The investors and entrepreneurs professional mastermind combines that additional peer to peer mastermind introduced first in Napoleon Hills famous book Thinking grow rich with accountability partnering, where your peers help you ensure that you set goals take actions and get results. If you want to scale blow past roadblocks and achieve success faster than you might think it's possible. I suggest you take a visit over to tiepm.com That's T i e. P m.com. And check out the investors and entrepreneurs professional mastermind