"The Undoing Project" by Michael Lewis

A must read!!!! This is a primer for psychology and the foundational basis for Behavioral Economics. This well written story delves into the unique relationship between two brilliant psychologists, Amos Tversky and Danny Kahneman. But it is much more than that; it is a vehicle that allows us to consider some of their groundbreaking research.

As it relates to sales, we should consider implementing some of their findings in our quest to improve our client relationships.

Essentially, they were the first to show that man is not a rational economic animal, but rather a biased, non-statistical-being that makes poor judgements and is easily swayed.

For our purposes it is important to consider some of their key findings:

1. Best known as the fathers of PROSPECT THEORY. It is the understanding that people are biased. Human assessments of risk, particularly the skewed attitudes between gain versus loss, is emotional and statistically incorrect. Individuals look for certainty in gains and attempt to avoid losses, even if the odds are contrary to what they, rationally, should do. People have a stronger response to fear than to gain.

2. Our decisions can be altered by the mere FRAMING of the argument. Telling someone that they can have a positive outcome is less likely to have the same impact as telling them they can avoid a problem. How one frames the situation can have an incredible influence on the outcome.

Example: Assume there has been a fatal influenza outbreak on a population of 600 people.

A. Give the audience a choice between

1) Vaccine Y, which will have a 1/3 chance to save all 600 and 2/3 chance no one.

2) Vaccine X, which will guarantee 200 people will live. (People want sure thing, Most choose X)

B. Give the audience a choice between

1) Vaccine Y, which will have a 1/3 chance to save all 600 and a 2/3 chance no one.

2) Vaccine X, which will guarantee 400 people will die. (People don’t want to think of 400 dying. Most choose Y.)

3. Use ALGORITHMS in lieu of humans. Our judgement can't be trusted. Kahneman used this to identify good pilots for the Israeli Air Force. It removed the human subjective and biased inputs. The implications: come up with a process and use it. Don’t leave it to individuals who have the biases that will screw it up. Look for statistical causalities. This is the premise of MONEYBALL and current sports recruiting practices. We can most likely improve some of our sales results if we deal with the situations more programmatically.

4. The REFERENCE POINT that you start with will dictate much of your response. This is a key point when discussing negotiation techniques. For example, Bob and Sue are being told that tomorrow they will each have $3mm. But today, Bob has $1mm and Sue has $9mm. Will they both have the same reaction? (I suggest you avoid Sue for a while.)

5. Have someone check your work. I.E. TEAMS WORK. A third party that can give uncensored and objective comments can vastly improve the quality of one's work. Lewis sites an example from Delta Airline pilots in the 1970's who were making tons of mistakes. Delta was able to remove mistakes by eliminating the "Captain is King" mentality in the cockpit. This allowed the co-pilots to question the pilots actions and avoid potential accidents.

Please feel free to comment on any of these recommendations and suggest other sources that might be helpful.

"If I Understood You Would I have this Look on My Face" by Alan Alda

"My Adventures in the Art and Science of Relating and Communicating"

This recently published book is about how Improv can teach us something about communicating. While interesting anecdotes, there are four take aways that we can use in sales.

1) Good communication is a SHARED experience. Don't think of it as speaker/listener. The best is two way.

2) Improv can help break down barriers. For example, teaching TEAMWORK: the results of having students playing imaginary instruments in a band brought them closer together.

3) Don't react with "NO". Or even "YES, BUT...." A better response is "OK, AND....."

4) Mirroring. Try this improv technique to teach people to better look for body language clues. (Have your team mirror each other. First one follows a leader, then switch roles. Then simultaneously. Then add speech. Very good drill.)

Please feel free to comment on any of these recommendations and suggest other sources that might be helpful.

"Your Brain at Work" by David Rock

This is an interesting look at the chemical reaction a person's brain goes through with various stimulus. The implications of what happens are critical to understanding why different sales approaches work or don't.

Key takeaways:

1. Brain power requires massive amounts of energy. We get fatigued. Our performance declines when we try to do several mental tasks at the same time. Implication is that you need to limit your messages. And big PowerPoint presentations can be very distracting. Prioritize your message.

2. The brain will focus better on a tight deadline. Implication is you need to Create a sense of urgency.

3. Action taken is a function of accessing the right levels of:

a. Norepinephrine. This is triggered when someone incurs fear. (Speak to a problem.)

b. Dopamine. This is triggered when we experience something new or unexpected. (Provide insight). Importantly, whereas dopamine levels go up with small surprises, they go down when expectations are not met. So manage expectations.

4. The brain wants to reduce stress. We do that when we have control. Give your client control. Speak in terms of YOU (the client).

5. Likeability. This principle is underscored by brain chemistry. We need others. We have social needs. When we connect with someone, the brain releases Oxytocin, which gives a sense of pleasure. This is why RAPPORT is so important.

6. Sense of Fairness. The brain wants to see a balanced approach. Very important. So show both sides of the argument.

Please feel free to comment on any of these recommendations and suggest other sources that might be helpful.