Psychiatrist Mark Goulston: "An entrepreneur should not be a sh-t"

Psychologist and business consultant Mark Goulston talked people out of committing suicide and taught FBI staff to negotiate with hostage-takers. Based on his experience, he developed his own negotiation methodology, wrote several best-selling books, including, How to Talk with A--holes, and began advising companies, including Xerox, Deutsche Bank, and British Airways. Mark Goulston told Inc Russia what entrepreneurs are most afraid of and why investors envy them.

“The quality of negotiations deteriorates when each side believes that it is in danger of defeat.”

- Before the interview, you said that entrepreneurs are not interested in deeply understanding the nature of communications between people, and they are only interested in specific tips on how to win negotiations. Why?

- To achieve a result, entrepreneurs are very focused on their business. When someone or something pulls them out of this focus, they get annoyed and upset. Steve Jobs, Bill Gates, and Warren Buffett said that the most important secret to business success is focusing and staying focused. And everything that prevents you from holding focus, slows down the path to success.

But the entrepreneur and the one with whom he is negotiating can be focused on different things. All negotiators want to leave as winners and do not want to lose. The quality of negotiations deteriorates when each side believes that it is in danger of defeat. When people are desperate, they begin to behave irrationally: the more primitive part of the brain that is responsible for survival kicks in which makes it difficult to think rationally.

- How to avoid this condition during negotiations?

- In my speeches, I give the following example: imagine that you have a hammer and two wooden bars, but there are no nails, and you need to connect these two bars. You start to hammer on the bars and see that it does not work. You say that you need a nail, and you are told that there is no nail. You continue to hammer on the bars - and at some point the bars fall apart. You become annoyed and upset about failure.

People go through the same thing when negotiations go badly. They get angry and upset because nothing seems to work. Instead of connecting the bars, they feel destroyed. But instead of breaking a bar with a hammer, a person gets tired and gives up. At this point, he may ask another person for help. This is what happens in the negotiations. However if you allow a person to show negative emotions and do not react emotionally to them, then the probability of moving to a constructive resolution increases.

If during the negotiations you are under a lot of pressure, say: “You appear to be annoyed, what is happening to cause that?” Someone might answer you: “Listen, you don’t understand anything!” You can answer with: “I see that what you are asking for is good for you, but I'm not sure it is good for me. ” A more calm person may stop himself and ask: “By the way, what is good for you?” But if you are dealing with a really difficult person, he will put pressure on you to the last and you need to try to tell him: “I'm not going to do what you're pushing for, until I understand how this is a good thing for me. " If he continues to put pressure on you, say: “You look frustrated, what's causing that?” Then the person can answer: “I need this deal, because if I don't get it, I'm worried they will fire me.”

You need to be able to communicate constructively. Move the conversation from “they want something, and they will get angry if they don’t get it," which can cause you to become emotional and not think clearly, towards “maybe there is an option in which we both get what we want.”

October 7, Mark Goulston will speak at the  MTT Forum in Moscow. Go listen to him.

"Investors envy entrepreneurs"

- You work also with companies that attract or have recently attracted investment. What problems most often arise in negotiations between founders and investors?

- There is one main problem. Investors talk down to entrepreneurs because they perceive them as those who need money. And since entrepreneurs really need that money, they get nervous. This allows investors to intimidate entrepreneurs.

The entrepreneur must understand that he is sitting in the driver's seat — and he is more important than the investor.

The investor needs you more than you need him, because the investor has to spend money. If he does not invest in anyone, then he will have to tell his boss that there was nothing to invest in. Over time his boss will become upset and answer that we're here not to hold onto money, but to invest it.

An entrepreneur should not be a shit, but he must be confident. He can tell the investor: “Let's see if I understand what you're looking to me for. If I understand what goal you are trying to achieve, our discussion will become better, will it not? ” This may be unusual for an investor who is not used to someone talking with him like this.

- What proportion of entrepreneurs really do this?

Almost nobody does that. Therefore, I began to talk about the complexity of training entrepreneurs and how showing them that such behavior would increase the likelihood of investment. I point out how it is necessary to bring the investor out of his usual POV, which is often thinking: "Someone is sitting in front of me and wants me to invest money in their company, and he acts as if he believes that this is a great deal, but in fact, most likely, it's crap."

- Entrepreneurs often often say that investors treat their projects condescendingly and give them undeservedly little attention. Where do you think the roots of this problem are?

- Investors are jealous of entrepreneurs.

"The reason for their envy is that entrepreneurs actually produce something and really bring value to the world, while investors bring only money to the world."

Unconsciously, the investor may not feel like a worthwhile person, because of only being about money and not doing anything for he world and often wants to escape from this because it can cause them to unconsciously feel ashamed.

Among us there are many people who run from meaninglessness and emptiness, buying things and entertainment. Too much of the world lives like this: people run away from thinking that what they do might not matter. People do not want to think about it. Sometimes I meet such rich people, and they discuss their collections of art, wine and so on. But when you look into their eyes, even as they boast, you can see how nervous they are. And they are nervous because often their life is empty. They are not close to people: neither with children, nor with spouses. They're only good at making money and buying things.

Persons like Elon Musk don't like to have people control them.

- In general, problems with investors of this kind are specifics primarily of the Russian market and, probably, the markets of other developing countries. At the same time, we hear from Russians working in Silicon Valley that investors there are more open and flexible with respect to startups. Why is that?

- People in developing countries are more focused on how to avoid mistakes. Because when they make mistakes and someone criticizes them, they feel guilty and defeated. In fact, if you make a big mistake, you risk losing your career. I think that in developing countries people proceed from the modus of fear, because they survived the genocides, financial instability, Yeltsin. They do not feel safe, they believe that bad times can come back at any time and therefore they must always be careful. In a developing country, you can never be 100% sure that things will go better in the future. You hope so, but you cannot be sure. And so you are very worried.

Young Americans are unfamiliar with this trauma; there was no horror in their past. Silicon Valley is slightly protected from the how awful life can be. Maybe they'll notice it in their homeless population, but they tend to ignore those people. And investors in Silicon Valley are open because they are looking for the next Facebook, Apple or Google. And they realize that many founders of such companies are crazy in their genius, and do not ignore it.

No investor in Silicon Valley wants to get into the situation of John Scully, which caused Steve Jobs to leave Apple (this happened in 1985 as a result of disagreements between Jobs and the board of directors, - Scully served as CEO. -  Inc. ). Jobs was uncontrollable, but when Scully began to manage the company instead, he brought her almost to bankruptcy. This is an example of how a company was led by a person of an analytical, logical type could kill the creativity that was the lifeblood of that company.

- Recently you said that often bright charismatic leaders like Elon Musk cannot effectively manage their own companies.

- Apple would not have succeeded without Tim Cook. Steve Jobs needed Tim Cook to fill the gap between himself and the execution of operational tasks. I see this in my life too: I am an entrepreneur, and my performance is often not great. That's because I have cool ideas and strategies, but my execution is sometimes terrible. Therefore, I have to partner with people who know how to perform. I recently found a young 20 year old genius who is amazing at everything I am awful at and it's causing me to feel more optimistic than I have felt in a long time.

It seems that individuals such as Musk simply do not have people nearby who could manage them. Between such people should be respect. Steve Jobs respected Tim Cook, because he realized that he could not have been successful without him. Same thing with Mark Zuckerberg and Cheryl Sandberg

- Good. How should an entrepreneur understand that he should leave the company?

- This should be done if the entrepreneur went through three situations in which people spoke, advised or warned him about something, but he did not listen to them - and failed. There may be additional situations, but I’m talking about three just as an example. If I failed three things because I didn’t listen to anyone, and if I’m not stupid, then I should find smarter people and listen to them and possibly turn the company over to them..

Illustration: Alexander Cherepanov

“There is a lack of wisdom in an entrepreneurial environment”

- From your words, I realized that in a successful company there should usually be two leaders. A leader like Elon Musk, who is responsible for a long-term strategy, and an operations manager. Do you know examples of companies with one leader who is able to independently perform both functions?

- I may be wrong, but, in my opinion, now the best leader in the technological world is Satya Nadella from Microsoft. I do not know him personally, but I would like to meet him. He has a vision and strategy, and at the same time, he really not only understands, but also feels the value of people.

You must negotiate correctly with people. You can intimidate your employees and achieve quick success - but then after some time you injure them and they will start drinking, having marriage problems and will go work for someone else, especially if their skill is in high demand. This is a challenge for entrepreneurs.

There is a lack of wisdom in an entrepreneurial environment. The best teacher of wisdom is failure.  But, on the other hand, failure is one of the main causes of depression. 

Entrepreneurs are bright and smart, but they are often not wise. To be bright means to be able to turn nothing into something. An smart person turns something into everything and can sell the product to the world. A wise person knows what is important and what is not important. What's worth holding onto and what's worth letting go.

A wise person would say: “Okay, we are selling it to the world, but will it actually make a positive difference?” Bright and intelligent individuals will not think about it. And a wise person thinks: "We are responsible for making the world a better place, because if we don't do it, then no one will."

- Bright, smart and wise people in your concept are always different people? For example, can an intelligent person be wise at the same time or become one? Can a person Elon Musk become smart to competently manage a company at the operational level?

- Smart people make money. But I'm not sure that they can become bright or wise. A wise person can be bright and a bright person wise. The difference is that bright and wise individuals are curious, and smart people are not curious: they are about how to sell, how to make others buy. Bright personalities are curious naturally. And wise people are concerned about questions such as: why the world works the way it does, or why people are so angry at each other.

- Suppose that the CEO understands that it is better for him to move away from operational management and continue to engage only in strategy. Then how can he find a suitable replacement?

- I advise you to look for such leaders, under whose leadership people previously really did what they should do. Look for someone whose leadership is separate from specific products and services that they are experts at. Because if you find someone who was a leader only in the automotive industry, for example, and that’s all he knows at all, and you will bring him to your technology company ... These are all different things. You need someone who can be an effective leader everywhere thanks to the ability to adapt.

-  Do you believe that companies with a horizontal structure can be more effective than companies with authoritarian leadership?

- I believe in authoritarian leadership during a crisis or a war. In such periods, it is necessary for someone to take responsibility and for this person to be smart, bright and wise - otherwise the company will die. But after the crisis, it is necessary to build a horizontal structure of people who are able to cooperate.

The problem with authoritarian leadership is that they too often lead through fear. In a crisis, this works because you are more afraid of the consequences of the crisis than an authoritarian leader. In the face of a common enemy, everyone clings to each other, but people need a leader to do something. When the crisis ends, fear ceases to be a good motivator. In the long run, fear is counterproductive because people will begin to hide mistakes they are making out of fear of being yelled at.

"We put up with lunatics when we see that they can connect us to the future.”

- What are the main fears of entrepreneurs themselves?

- Having to start working for someone else.

The main fear of many entrepreneurs who have already experienced success, is that if they fail, they will have to go to work for someone else. Then they will feel humiliated, confused and, perhaps, even depressed, from which they may have trouble getting over.

- Are entrepreneurs more altruistic or selfish than other people?

- They are more selfish. As I said earlier, to become a successful entrepreneur, you need to focus and discard all that is unnecessary. The question of altruism arises when an entrepreneur has earned a lot of money and can relax. His values will then begin to dictate how he spends this money: saving the world, helping his employees make a better life, or buying himself two new houses and an airplane.

These values can be affected by place of birth. If you were born in a poor area and saw a lot of pain around you, then you might want to relieve this pain, but if you grew up spoiled and you may not have learned to feel compassion for other people.

- Based on your experience: are entrepreneurs more likely to have mental health problems than other people because of the risk in their lives, or not?

- Entrepreneurs are indeed more likely than others to suffer from depression, ADHD and bipolar disorder. An entrepreneur friend told me that entrepreneurs are depressed not because their businesses are failing, but vice versa: they suffered even before they entered the business and became entrepreneurs as a way to deal with their mental problems.

Richard Branson and Ted Turner have dyslexia, Steve Jobs has attention deficit disorder. Many entrepreneurs grew up and heard that they were stupid, they had to listen to all these negative things from others. 

All around people asked them: “Why do you have to be different from others? Why can't you just find a permanent job like the rest? ” But people with bipolar disorder, ADHD often cannot work for others because of how uncontrollable their underlying mental illness can make them feel.  For them to become an entrepreneur means finding a way out of this state.

Let Elon Mask and Steve Jobs got away with their eccentricities because we need visionaries who lead us into the future. We put up with lunatics when we see that they are capable of connecting us to the future. Do we want them to be more predictable and manageable? 

Yes, but we'll look the other way if they're our only way into the future.