Pareto, Elites & Unequal Distribution

A fantastic book that repudiates classical and neo-classical models of economy which has led to countless busts and never was able to predict those busts and still clamors to be the best out there. These are the economyhths which are decimated in the book and a new order and model is what is required to counter the unknowns is enunciated but still this is not foolproof as we can never predict the next earthquake but lest be prepared. Some pages were fascinating and one such excerpt is the one below that I connect with is worth giving here to induce interest in this book Economyths by David Orrell. Happy reading!

It’s not that many young people do not have aspirations. It is that they are blocked Such elitism is unjust socially And it can no longer mark economically. Alan Blilburn MP (2009).

Economists are taught that, in principle at least, a well-run market economy is fundamentally fair, so while luck and random effects may be involved, our actual chance of success depends only on merit. The whole point of a competitive market, after all, is that everyone has an equal shot. This belief in an underlying equality influences everything from taxation policy to the pay packages of CEOs. Yet in recent decades, the income distribution has become increasingly skewed, with most of the benefits of increased productivity accruing to the top few per cent of the population. Ibe reason, as this chapter shows, is that markets are not fair and balanced, and the rich really do get richer.

Economic models in general have continued to shy away from distinguishing economic agents based on power, influence, access to information, connections, gender, race, class, or any other characteristic. As Norbert Häring and Niall Douglas note in their book Economists and the Powerful, such imbalances are ‘defined away by standard assumptions of most mainstream economic models’. Milton Friedman even argued that properly functioning free markets would automatically render them irrelevant: ‘there is an economic incentive in a free market to separate economic efficiency from other characteristics of an individual. A businessman or an entrepreneur who expresses preferences in his business activities that are not related to productive efficiency is at a disadvantage compared to other individuals who do not. Such an individual is in effect imposing higher costs upon himself than are other individuals who do not have such preferences. Hence, in a free market they will tend to drive him out.’ According to theory, sexism, racism or any other form of discrimination is inefficient, so in a pure (i.e. symmetrical) market it wouldn’t exist. Economic transactions are more or less the same, regardless of who is involved or when they take place. It is amusing to compare this picture with the highly ritualized, Vatican-like hiring practice standard in economics departments, which according to one sociological study is characterized by elitism, hierarchy, networking, and male-bias.) Of course, no economist would claim that the real economy is perfectly fair or stable, or that each participant has access to exactly the same information.

As seen with the subprime crisis, though, these assumptions soon begin to look ridiculous when you compare them with the real world. Markets aren’t just slightly asymmetric, they’re totally out of whack. Is it really OK to assume that Goldman Sachs and subprime mortgage holders are competing on a level playing field and have access to the same information? Is Wal-Mart versus the local corner store really a fair fight? And does it really make no difference where you are born, who your parents are, what schools you went to, who your friends are, or what your history is?

Circulation of the Elites
The French statesman Georges Clemenceau is attributed with the saying that ‘Any man who is not a socialist at age 20 has no heart. Any man who is still a socialist at age 40 has no head.’ Following a similar kind of trajectory, perhaps, neoclassical economics started off in an idealistic vein. aim of people like Jevons, Walras and Pareto was to put economics on a rational basis, and thus improve the living standards of the general population. Jevons was brought up in a Unitarian tradition concerned with social conditions, and spent much of his free time walking the streets of the cities he lived in — Sydney, Manchester, London — observing the conditions of the poor and contemplating the connections between poverty and economics. Walras inherited his socialist ideals from his father, and spent a number of years working in the cooperative movement before taking up his professorship at Lausanne.

As a young man, Vilfredo Pareto was a dedicated democrat, and took pleasure in- attacking the Italian government for corruption and corporatism. After the May 1898 riots in Milan, which were organized by the Italian Socialist Party and resulted in the deaths of hundreds of people, Pareto offered his home in Switzerland to socialist exiles and leftist radicals. Even by 1891, though, when Pareto was 43, it appeared that his head was pulling in another direction. He wrote to Walras. ‘I give up the combat in defense of liberal economic theories in Italy. My friends and I get nowhere and lose our time; this time is much more fruitfully devoted to scientific study.’  He began to believe that his youthful passion for leftist ideals had been based on emotion rather than logic, and that all human societies were inherently corrupt and irrational.
Pareto’s cynicism about human motivations was no doubt fuelled in 1901 when he returned home from a trip to find that his wife had run off with the cook and 30 cases of possessions. Under Italian law, Pareto couldn’t get a divorce. He had inherited a large sum of money from an uncle in 1898, enough to make him financially independent. In 1907 he resigned his university position and retired to his villa near Lake Geneva, where he lived with a woman 30 years his junior called Jeanne Régis, a large stock of the finest wines and liqueurs, and eighteen Angora cats (the house was called Villa Angora).

Pareto continued to blast off incendiary books, articles and letters, but his aim switched from trying to change society, to analyzing it from his detached vantage point — rather as an entomologist might analyze the social goings-on of an anthill, but with more spite and irony. In his million-word tome Treatise on General Sociology, he argued that human behavior is driven by irrational desires, which are then justified by particular ideologies. To understand society, one therefore had to focus on the underlying irrational desires, which he classified into six types. The most important were innovation (Class I) and conservation (Class Il). Everyone was motivated by a mix of these classes, but one could nevertheless speak of ‘Class I’ types, who are clever and calculating, and ‘Class Il’ types, who are slower, more bureaucratic, and dependent on force.

Pareto had earlier discovered the power-law distribution of wealth (the 80-20 rule) in Italy and other countries, and wrote that it ‘can be compared in some respects to Kepler’s law in astronomy; we still lack a theory that may make this law of distribution rational in the way in which the theory of universal gravitation has made Kepler’s law rational’. Today, we would describe it as an emergent property of the economy. In his retirement, Pareto came to see this highly-skewed power law as a kind of snapshot that revealed the underlying dynamics of any society.

At the top is a small elite consisting of a mix of Class I and Class Il people who are engaged in a Machiavellian struggle for power. There is always a degree of social mobility, so the composition of the elite changes as people enter or leave. The balance between the two classes therefore varies with time, in a process Pareto called the circulation of the elite. If too many innovative and intelligent Class I people (Machiavelli’s foxes) get in power, then the conservative Class IIS will plot a takeover. If the elite is dominated by Class IIS (Machiavelli’s lions), then it will become overly bureaucratic and reactive and the Class Is will make their move. This process can be smooth and gradual; but, if the circulation becomes blocked, so that ‘simultaneously the upper strata are full of decadent elements and the lower strata are full of elite elements’, then the social state ‘becomes highly unstable and a violent revolution is imminent’.
Pareto demonstrated his argument with numerous case studies. Perhaps the best illustration, though, was the coming to power in Italy of Mussolini’s Fascist government. Mussolini liked the idea of powerful lions taking over from foxes grown corrupt and ineffectual, and appointed Pareto Senator of the Kingdom of Italy. In 1923, Pareto finally managed to obtain a divorce and marry Jeanne Régis, before dying the same year.

How to get Rich
While Pareto’s sociological arguments have dated a bit in the last hundred years, his observation that wealth is distributed according to a power law has remained accurate — except that the elite has grown relatively smaller and more powerful. figure below is a summary of how the world’s wealth was distributed among the total 3.7 billion adults in the year 2000, according to a United Nations report. Adults required a relatively modest net worth of 2,138 to count themselves in the wealthiest 50 per cent To be in the top 10 per cent (370 million adults) they needed S61 This group owned over 80 per cent of the total wealth Anyone with $510,000 was in the top I per cent (that’s 37 million adults)- Together, this small sliver of the world population controlled 40 per of the world’s financial assets. Contrast that with the bottom half, who collectively controlled about 1 per cent of the wealth. Someone born into the world at random would stand a 50 per cent chance of ending up in that group of 1.85 billion adults. (As discussed in the update on page 216, wealth distribution in many countries has become considerably more skewed in recent years.)
Rather impressively, the power-law distribution of wealth extends all the way up to the world’s richest billionaires. In 2009 the world’s richest person was Bill Gates, with a net worth of $40 billion. To put that in perspective, suppose that you made a plot of the wealth of everyone on the planet, in order from richest to poorest. If you continued the plot up to the 99th percentile, then the vertical scale of the graph would have to be around half a million dollars (this will have changed slightly since 2000). But if you wanted to contain Bill Gates, or his friend Warren Buffett, then the vertical scale would need to expand by a factor of about 80,000.

image
Bar graph the wealth distribution in Yr 2000. The top decile (10 per cent) controls 80 percent of the total wealth. Deciles 6 through 10, which represent the bottom 50 percent of the population, control about 1 per cent in total

Wealth is also of course not distributed evenly in geographical terms. In 2000 the USA and Canada together had 34 per cent of the wealth, Europe had 30 per cent, rich Asian-Pacific countries had 24 per cent, and the rest of the world including Latin America and Africa held 12 per cent. This mix is changing as countries like China, India and Brazil continue to experience explosive growth and claim a larger share of the world’s economic pie. From these data alone, one can therefore conclude that the world economy is highly asymmetric. A small number of people enjoy a huge proportion of the world’s wealth, while billions live in poverty. same kind of pattern is seen repeating itself fractally over different scales. Every city has its own local elite, as does every country or region. Tie sprawling metropolis of greater Säo Paulo, Brazil, for example, now has some 500 helicopters, more than any other city in the world. The rich find them a good way to avoid traffic jams that can extend for over a hundred miles.ll Also they’re hard to steal.

Apart from his discovery of the power-law wealth distribution, another aspect of Pareto’s work to have passed the test of time was his insistence that humans act primarily on the basis of psychological, motivations, and justify those actions on the basis of ideology. Ellie ruling elite always has a very good argument as to why it should be in charge and have most of the wealth and be flying the helicopter. Today, that argument goes by names such as the invisible hand, the efficient market, or mainstream economics.

Broken Symmetry
Adam Smith’s concept of the invisible hand is usually taken to refer to the price mechanism. However, his first use of the expression, in his 1759 work The Theory of Moral Sentiments, is on the subject of wealth distribution: ‘The rich divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life which would have been made, had the earth been divided into equal pro- portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.’ The invisible hand refers here not to the magic of the market, but to an early version of trickle-down economics.
Since the economy has patently failed to align itself with this happy picture, at the level of individual countries or the entire globe, one might ask what forces have created such a skewed distribution. According to Smith’s later work The Wealth of Nations (1776), free markets tend to drive prices towards ‘The natural price, or the price of free competition’. That applies to the price of labor, so it follows that an individual’s earnings should reflect the person’s inherent value to society. Efficient market theory similarly argues that markets allocate resources efficiently, and that includes wages. If Quetelet’s picture of the ‘average man’ is correct, and our abilities are randomly distributed according to a normal distribution, then one might expect wealth to be symmetrically distributed in the same way — most people would be in the middle, and there would be only a few who are very poor or very rich. The reality in most countries is obviously very different, so either our financial elites are incredibly talented, or something else is going on. One prevailing economyth is that the economy is inherently stable and at equilibrium i.e., it is symmetrical in time and so history doesn’t matter. However, there is the old saying that ‘the rich get richer’, and it certainly seems that to make a lot of money, it helps to have some in the first place.

Imagine as a thought experiment that a city-sized group of people are given a windfall of $100 each, under the condition that they must keep it invested in a rather volatile and unproductive stock market. Each person makes their own investments, with an average real return of 0 per cent and a standard deviation of 5 per cent. After one year, most people’s nest eggs will be in the range $90 to $110, and will be distributed according to the bell curve with a peak at 100 and a standard deviation of 5. As time goes on, though, the distribution becomes increasingly skewed. If we follow the worth of the investments as they are passed down through generations for 150 years (about the age of economics), then the resulting wealth distribution looks like a figure, which is quite similar to the actual wealth distribution in above figure. Obviously this is not a serious model of how wealth changes with time. It only tracks the value of imaginary investment port- folios, and ignores other kinds of economic transactions (more realistic agent-based models can be constructed, if desired). However, it does demonstrate the simple fact that, left to their own devices, investments will tend to concentrate themselves in fewer and fewer hands. To use the physics term, it is an example of symmetry breakings At the start of the simulation, everything is perfectly symmetrical. Each person has exactly the same initial amount of money. also have identical chances of success with their investments -— no one is assumed to be more talented at picking stocks, But over a period of time, some start to pull ahead of the pack reason is that there is a positive feedback effect at work A person whose sum has grown already from the initial $100 to $1,000 can hope to make another $I00 in the coming year. They might instead lose that much, but at least they have the opportunity, Someone whose savings fund has shrunk to SIO can only hope to make another dollar.
As the simulation is run for more years, the wealth becomes increasingly concentrated, until eventually only a few people are left gambling with the entire wealth of the community. If a person were born at random into such a population, their chance of being in the elite would be negligibly small. So even though the laws that govern this toy economy are symmetrical and non-discriminatory, the system tends to evolve towards an increasingly skewed state. Time matters.

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How “Holacracy” can help your organization now?

Brian J. Robertson crafts a wonderful management style that removes politics and decentralizes power that it empowers all in the game and ultimately make the organization agile, true to agile methodologies in software development. This book details the whole system and advices how to organize the teams and rules to play by a organization by Holacracy. There’s section which enlists the takeaways that you can still apply in non-Holacarcy organizations. The advice for those who aren’t able or ready to fully adopt Holacracy falls into four categories:

  1. Change your language, change your culture
  2. Rewrite your role descriptions
  3. Work on your organization,not just in it
  4. Streamline your meetings

Change Your Language, Change your Culture

Language is commonly seen as the verbal expression of culture, but language can also create culture. Try adopting some of these terms in your daily communications with your team and see how it changes your experience of working together.
Tensions and Tensions Processing:
Try replacing the language of “problems” and “solutions” with “tensions” and “proposals”. “Tension” in Holacracy, is a neutral term that simply means the feeling of a specific gap between current reality and a sensed potential. A tension is not a problem and it doesn’t necessarily need a solution; rather it points to an opportunity to move the way things are in present moment a little closer to the what things could be – which is usually a change for the better. To handle tension is by processing it.
Proposals rather than Problems:
Next shift is the habit of offering “Proposals” rather than just lamentations, when you feel a tension, take the next step, and ask yourself, “what would improve the situation? what could I propose?. Encourage your team to do the same. Proposal need not be perfect solution – it’s a way to start the conversation from a proactive, creative place, rather than the a negative one.
Any Objections?:
The next time you find yourself seeking buy-in from your tem around a decision, experiment with changing the way you communicate. Don;t ask, “Does everyone agree?” or “Does everyone like my proposal?” Those questions set you up for a long and tedious discussions. Instead ask, “Does anyone see any objections to this proposal?” and define an objection as “ a reason why this proposal would cause harm, or move us backward”. Another way to phrase the question would be “Does anyone see any reason why this isn’t safe enough to try, knowing we can revisit the decision if it doesn’t work?”.
Roles versus People:
When you’re assigning actions or projects to a member of your team, try referring to these actions or projects as being assigned to the particular role that person is filling. This helps to decouple the often fused “role and soul” and this to defuse the tensions that sometimes arise out of that conflation
Dynamic Steering:
Use a language that’s helpful in shifting your team from a ‘predict-and-control’ mindset to one that is more responsive and adaptable, with less analysis-paralysis. It is akin to naturally riding a bicycle allowing for some ‘weave and shift’ due course rather than riding it in a rigid manner and going nowhere. When we become attached to specific predicted outcome, there’s a risk we will get stuck fighting reality when it doesn’t conform to our prediction. If we find that we are not on the path we set out for ourselves, we may conclude, sometimes subconsciously, that something must be wrong. That judgement of reality inhibits our ability to respond, and encourages us to push against the unwelcome truth – to try to force reality to conform to our predicted vision. That’s not a very effective strategy for navigating the ever-changing complexity of business today. When reality conflicts with our best-laid plans, reality usually wins.

Rewrite Your Role Descriptions

Role is not a person, and one person can – and probably does – fill several roles. Differentiating these roles and the accountabilities they carry can go a long way toward making expectations explicit and avoiding treading on other people’s toes. Roles in Holacracy are dynamic, living things that change over time. Unlike traditional job descriptions, which are often vague, theoretical and soon outdated, Holacracy role definitions are based on the reality of what activities are experienced as useful in the organization, and they stay in sync with evolving reality. Holacracy’s governance process allows for continual clarification and refinement pf roles on the basis of actual tensions.

SAMPLE ROLE DEFINTION

Every role can have a purpose, domains and accountabilities

Role:

    Marketing

Purpose:

     Lots of buzz about our company and its services

Domains:

  • The company’s mailing list and social media accounts
  • Content on the company’s public website

Accountabilities:

  • Building relationships with potential customers in target markets defined by the Marketing Strategy role
  • Promoting and highlighting the organization’s services to potential customers via the web and social media channels
  • Triaging speaking invitations and other PR opportunities sent to the organization, and routing good opportunities to the Spokesperson role

Work on your organization,not just in it

Just don;t work in a organization but start working on it. One opportunity to start with is clearly defining your role and that of your team members. Another approach is to encourage your colleagues to ask themselves, “What would I do if this were my business?”

Streamline your meetings

Check-in and Closing rounds:
These can be easily added to the beginning and end of almost any meeting. their purpose is simple: the check-in round allows all present to notice and share whatever is on their minds that might be distracting them, so that the team is more present and focused, ready to move on to business at hand, while the closing round gives each person an opportunity to share reflections about the meeting. Just remember, in both rounds, people speak one at a time, with no discussion or response allowed. This is essential, to avoid your meetings devolving into personal discussions and to create a “safe space” for people to open up.

On-the-Fly Agenda Building:
Rather than going through a preset list of items that you think you should talk about, try driving your meetings with agenda built on the fly, in the meeting. This limits the agenda to items that someone feels enough tension about to bring up right then and there, and thus ensures that anything you spend time on is actually worth it, at least to someone.

The “What Do You Need?” Approach:
When dealing with an agenda item raised by a team member, it’s always helpful to start with the question “What do you need?”. This keeps the discussion focused on resolving the issue at hand.  It also helps to remind everyone that the only goal is to satisfy the person who raised the issue, without being diverted into other people’s related concerns. You’ll know you’re ready to move on when the person wo added the agenda item can answer yes to the question “Do you have what you need?”, even if other person aren’t satisfied. Their concerns can be dealt with as separate agenda item if necessary-which leads to the next element you may find useful.

One Tension at a Time:
This simple rule works wonders for streamlining a meeting and keeping it on track. It’s all too easy to start off addressing one issue, then find yourselves diverted by a half dozen related concerns, as everyone piles pet peeves on top of the original tension. The result is usually unsatisfactory for everyone, as often not much gets effectively resolved.

Integrated Decision Making:
This is a format that allows collaborative decision making

The Key to the Gate

This guide by EksAyn Aaron Anderson is very practical and noteworthy to emulate.

For most of the CEOs, gatekeepers like personal secretaries and receptionists guard access. It is their job to keep those barriers and filter who is worthy of the decision maker’s time. With the gatekeeper, your goal is to positively differentiate yourself. While the gatekeeper holds the key to gate and then beyond to the decision maker. You need to leave a positive, memorable impression that lets you stand out from all other salespeople that contact him each day. The distinguishing factors come when you act with solid principles: treat everyone with respect and as a friend, act with integrity, and be genuine and gracious. Some of the principles listed here:

Aim High:
Water flows downhill-so does influence. Sell to the people who can actually make decisions: Research and find the real decision maker and the gatekeepers

It’s a Process and not an event:
Getting an appointment is not an event, it is a process and you may or may not get the appointment at first call or after few rejections, the key is to try al possible ways

Treat Gatekeepers like Gold:
Acknowledging and recognizing a gatekeepers effectively is a three step process:

  1. Find something that you can honestly and sincerely compliment her on
  2. Write a note to the decision maker or boss
  3. Copy the gatekeeper on the email
    The principle of recognizing others is timeless. Again be sincere and honest. Most gatekeepers of high –level executives ate professional, helpful and polite – that’s why they are gatekeepers of high-level people. There may be times when you may chose not to compliment a gatekeepers when his/her conduct did not merit it.

Jujitsu Emails:
Jujitsu is an ancient Japanese fighting technique that uses skill to outmaneuvered the opponent. It is the art of using people’s weight and momentum against them. If II  am 150 pounds, and a 300 pounds solid guy is charging me, the outcome doesn’t look very promising for me. However, if I can use his 330 pounds of force against him by tripping him or getting out of the way of his momentum where he can’t stop, I can use my smallness to my advantage and his bigness to his disadvantage. The same principle can be applied to emails. As you start with the top person emailing, it is better to follow up with the gatekeeper and enquire on it. if the gatekeeper suggests to talk to a lower level, as her send that email to recommended person and copy you or alternatively you can do as well keeping the top level and gatekeeper in loop. this carries more weightage on the recommended person to act.

Chase and Dance:
Best salespeople are the best salespeople because they act nothing like a stereotypical salesperson. They act real, honest human – like a friend – who just wants to help. They are willing to admit that they may not have all the answers, their product may not be a fit, etc. They are willing to step back, remove the pressure and create space. They are conscious to reflect the tone and intensity level of the gatekeeper.

Chase:

  1. Gatekeeper: I think that we already have a product that oes what you’re selling. I don’t thnk we need your product. (stepping back)
  2. Salesperson: But I don’t think you understand how good our product really is. It beats the competition, It’s awesome. I really want to talk to mike so he can see how much money he is wasting using your current product. (steps in again and pushes).
  3. Gatekeeper: Like I said, I think that what we have works just fine (Stepping back and starting to run)

Dance:

  1. Gatekeeper: I think that we already have a product that oes what you’re selling. I don’t think we need your product. (stepping back)
  2. Salesperson: Great. Maybe you’re right. Maybe our product isn’t for you. We don’t want you to do business with us unless it is good for you. That’s why I wanted to talk to Mike. I wanted to find out his needs and the needs of your organization, and then let him know what we offer and see if there’s a fit. If there is a fit, great. If not, no big deal. (mirrors the emotion the gatekeeper shows of “we don’t need you”. Notice that the salesperson doesn’t “need” the sale either. This is mirrored emotion while stepping back.)
  3. Gatekeeper: I might be able to squeeze you in week after next (stepping in)

Chase:

  1. Gatekeeper: He is not gong to be able to meet with you for few weeks. We have quarterly numbers to do plus prepare for an annual conference (Stepping back)
  2. Salesperson: Well, I am only going to be in your area on those days. Is there any way to squeeze me in? Plus, of he likes our product he will need to take advantage of it very soon or he will miss out on our current promotion. (steps in and pushes)
  3. Gatekeeper: Sorry, it isn’t going to work this month. (Stepping back and holding onto her position)

Dance:

  1. Gatekeeper: He is not gong to be able to meet with you for few weeks. We have quarterly numbers to do plus prepare for an annual conference (Stepping back)
  2. Salesperson: Perfect. That is fine. I’m very busy myself. Whether it is now or next month, no big deal. Take your time (Mirrors the emotion and steps back too)
  3. Gatekeeper: Great. I will set up for the first week of next month. However, if things change, it might work for me to get in a bit earlier. I will let you know. (Stepping in)
  4. Salesperson: Perfect. If he can meet earlier, I will try to accommodate his schedule. (Mirrors the emotion and steps in, too.)

The Art of Getting Your Way:

Diplomacy is the art of letting others have your way – Daniel Vare. The principles here are:

  1. Listen more. You have two ears and one mouth
  2. Aim to understand others first

A Negotiation Example:

  1. My friend asked me to help in the purchase/negotiation of a car. In car dealership, after test driving a mustang, I made sure to mention the car was good and we are serious.
  2. I told the salesperson that we would need a great price for the car. “What o you need”? replied the salesperson (this was his way of asking me to name my position first). What If I said him, “I need $3000 off of the price?” Why could that be a compromising position? Because he may be willing to come down more than just $3000. What if he is willing to discount $4000 or $5000 from the sticker price. I stood my ground using a simple two step process: Compliment and Turn it around and ask a question
  3. My response: Great question, how low can you go? (maintaining control by asking another question. Notice I didn’t answer his question at all)
  4. The salesman replied, “I can o back to my boss an ask him how low he can go? but what do you need? (he was gain asking me ti name the position)
  5. Wow you’re a great negotiator. I still need you to go to your boss and ask him how low can he go? (this went on further and I didn’t name mine and answered all questions diplomatically and politely and calmly. It went on for few minutes before the salesman went to ask his boss)
  6. He came back with an answer: $246000. (that was $3000 from the sticker price)
  7. I replied “That’s trouble”
  8. Salesperson said, “we can do for $20600” (Much of what we say we do not say with words but with our body language and tone of voice).
  9. We walked towards the door, then a plea came that we do it for $19600

In the example above, we used negotiation principles by not naming our position first, and we used positive reinforcement by appreciating the gatekeeper for moving us in the direction of a sale. This could be applied in any negotiation situation.

Assumptive Questions:

During any negotiation, the way you ask questions is crucial and can mean the difference between getting the appointment/sale or not. It is imperative to speak confidently when asking for the appointment. Timid questions are asked in Yes/No format and is to be avoided. Confident salespeople phrase their questions confidently and assumptively as if the person has already said yes!?
Assumptive questions are just that – assumptive. You don’t ask if you can meet with her, you ask when. When it comes time to ask for the appointment, a confident and successful salesperson does not say, “So can I get an appointment with Mark?” Notice that this is yes/no question and easily opens up the door for the reply to be no. If you have done all the ground work, you have a right t ask the question assumptive. Being too assumptive may lead you to be deemed pushy!!.

Yes/No question: Can I get an appointment?
Powerful/Assumptive Question: Thanks for helping me out. Does this week or next week work for Tim? or What time works best so I can accommodate his schedule?

The Alliance–Managing (Entrepreneurial) Talent in the Networked Age

Reid Hoffman, LinkedIn founder, co-authors this definitive recruit-bender guide which tries to address the distrust between employee and employer with ‘Alliance’ as a new paradigm to create trust and enduring relationship that’s mutually beneficial. Treating employees as allies and assigning them ‘Tour of Duty’ is the change of attitude an employer to make to make this happen. Some ideas captured here to help to run your company / your branded “you” well in the networked age:

  1. ‘Tour of Duty’ comes from military where a soldier in his/her tenure goes through multiple ones typically diverse and different from every previous ones. This allows employer to incorporate some of the advantages of life time employment and free agency. It reduces pressure on both sides and builds trust incrementally. Each employer has to recast careers as successive tours of duty to attract and retain entrepreneurial talent. The gist is – Employee may quit at any time and that’s what they are empowered to do and the question is how long can you thwart that with mutual the trust to compete a tour of duty with mutual benefits
  2. Different Types of Tours – Rotational (assess the fit between employee and employer), Transformational (mission completion specific) , Foundational (top executives see to the end)
  3. Building Alignment in a tour of duty:
    1. Establish and disseminate the company’s core missions and values
    2. Learn each individual employee’s core aspirations and values
    3. ‘’Work together to align employee, manager and company
  4. Having The Conversation – Advice for Managers
    1. Define values in group – create a rough draft, present and seek feedback, there needs to be realistic understanding of the true company culture by a manager
    2. Define personal values one-on-one
    3. Build trust by opening up – Learning what an employee cares about helps build a relationship of trust. Asking participants to share their deepest feelings and beliefs for a single hour could generate the same sense of trust and intimacy that typically takes weeks, months and years to form. Direct questions like “Who’s the best co-worker you ever worked with?”, “What’s your proudest career moment?” help break down emotional distance. Its equally important to open up your own core aspirations and values to make this mutually equal.
  5. Managing the unexpected during the tour of duty
    1. What happens when one party breaks the alliance? – Employee can betray and just say it’s business and he‘ll lose future benefits and favourable references. For employers also there are similar and equal consequences
    2. What if one party is performing poorly? – Avoid short term knee jerk responses either side and look for long tern investments, but if it persists, either should release amicably and reasonably
    3. What if the employee wants to move into a new role within the company? – don’t block as long mission is completed or can be sustained by others and this lateral move is beneficial for both
  6. Network intelligence generates hidden data, serendipity and opportunity and how to implement a network intelligent program? – Tactics and Techniques investing in employee networks:
    1. Recruit Connected People: make a candidate’s network strength an explicit priority when hiring. It’s critical to define it – not on the number of followers/connections held but how far they could leverage that connections to solve a problem. In teh interview process, ask candidates about their strongest professional allies. Find out how they solve problems – do they call experts in their network. Reid during manager interview asks – who will the prospect hire after him? Reid will reach to them as a reference check as well.
    2. Teach Employees how to mine intelligence from their networks via conversation and social media: Knowledge isn’t valuable unless shared. Here are some questions to find answers and share those appropriate in the intranet with all employees/managers (Of course employees should use their discretion and always maintain their integrity) :–
      1. How is the key technology trend is shaping our industry?
      2. What are other companies (and competitors) doing that’s working or not working?
      3. What are our customers’ sentiments, what is motivating them, and how they have changed?
      4. who are the key people in the industry that we should engage with?
      5. what are the hiring trends in our industry?
      6. who are the new entrants in the marketplace and which of them are dong interesting things?
    3. Roll out programs and policies that help employees build their individual networks
      1. encourage Employees to be active on social media and to make themselves discoverable
      2. Setup a “networking fund” for employees: Networking lunch to get employees to talk smart people and summarize what they learnt in this conversation to all
      3. Facilitate speaking gigs for your employees
      4. Host events at your company office – meet-ups for like minded technical folks to share things and findings on industry trends
      5. Have employees share what they learn with the company: brown bag sessions, sharing research findings on new things connected to work