The following is adapted from the recent book Small actions: lead your career to great successby Eric Sim, CFA, and Simon Mortlock.
Nobody likes rejection. That’s why, over the years, I’ve developed a three-step process for turning hopeless situations into hopeful ones. I call it the 3P approach:
Let me give you a few examples of how to put the 3Ps into action.
Departure at 7 p.m.
Getting a table on a weekend at some of Hong Kong’s most popular restaurants can feel, with a slight exaggeration, like winning the lottery. But hope is eternal, and like all those people who patiently line up at the lottery counters hoping to buy the winning ticket, I can’t resist trying my luck at my favorite Italian restaurant chain. Its thin crust pizzas and aglio and olio the pasta is simply irresistible. My family loves Sunday dinner at the busy Kennedy Town branch. Of course, we usually make impulsive decisions to go there, and it’s nearly impossible to book a table on the day. But that’s where the 3Ps came in.
One Sunday afternoon, I called the restaurant.
“Good afternoon!” replied a woman with a cheerful voice.
“Do you have a table for four tonight?” I asked hopefully.
“No sir, we’re fully booked,” she replied with a hint of regret.
“And at 6 p.m.? I replied.
“Sir, we are complete,” she repeated, probably thinking, “What part of ‘complete’ don’t you understand, sir? »
But I was not deterred. “And if we leave at 7 p.m.? ” I asked.
There was a short pause on the other end of the line. “Let me check,” she said. Seconds later, she replied, “Yes sir, we have a table.”
I used the 3Ps to change her mind. Here’s how it works:
Perseverance: show your efforts
I didn’t hang up after she said “sold out”. Instead, I came up with a counter-proposal. When I suggested leaving the restaurant early, I showed her that I could be flexible with the timings.
Perspective: Understand the other person’s priority
The restaurant clerk’s main concern was not to meet my needs; this was to ensure that customers who had reservations were seated within the allotted time. He didn’t care if I wanted a table to celebrate my child’s birthday or my boss’s resignation. Getting angry, saying how much business I’d given to the restaurant, or threatening never to go back weren’t going to work with her. Instead, I helped her do her job by offering her a restaurant hostess’ equivalent of an options trade in finance. I gave him a contract giving him the right (but not the obligation) to kick me out at 7 p.m.
But this Sunday evening, I was not driven out: the restaurant had enough space, so the holder of the option did not need to exercise her option.
Call me an eternal optimist, but I always hope that I can turn an unfavorable situation into a favorable one. A lot of people would have given up at “we are complete”. Not me. I looked for a compromise that would be a win-win solution for both parties. The restaurant is rarely full in the early evening, so I helped him use his resources more efficiently.
Can I pass?
The ability to turn a ‘no’ into a ‘yes’ is even more critical in our careers.
When I was working for a bank, a corporate client based in Taipei applied for a renminbi (RMB) construction loan to build an office tower in Shanghai. It was a 10-year loan, and my colleague in the lending department priced it accordingly, using the People’s Bank of China (PBOC) five-year or longer rate, which was then 5 .94%.
In the cutthroat world of finance, that was not enough. Another bank offered the client a more “creative” loan structure. Instead of the standard 10-year loan, the bank offered a six-month deal that would be continuously extended until the loan was repaid after 10 years. This shorter loan period had a much lower interest rate of 4.86%.
My colleague came to me asking for advice on how to resurrect the case. I offered a US dollar (USD) loan along with a USD-RMB currency hedge to create a synthetic RMB loan with an all-in interest rate of 4.5%. It was cheaper than the other bank’s offer, but it was still a 10-year loan. We proposed our solution to the client’s finance team. They liked it and took the idea to their CFO. Feedback has been positive.
I had saved the case! Or so I thought.
A week later, the client told us that he could not accept our proposal. Their CFO had already verbally committed to the other bank before hearing our innovative offer. We were devastated. I couldn’t understand why the client had opted for our competitor’s more expensive solution, so I asked if I could “drop in” for a cafe-meet in Taipei.
During our lattes, I explained that under mainland regulations, banks in China were not allowed to price a long-term construction loan using the lending rate of the PBOC at six months. If the “creative” bank encounters difficulties with the regulator, its customers could be impacted. The CFO of the client company took what I said to heart. I left the meeting and flew to Hong Kong the same afternoon. The next day the client called to say we had won the deal. Again, the 3Ps worked.
Perseverance: show your efforts
I continued to engage with the client even after he refused our solution.
Perspective: Understand the priority of the person
There were two potential no’s here. First, the client could have refused to participate in the face-to-face meeting. If I had insisted that the business trip was just to see them, they might have turned down the meeting. Taking it could have forced them to reconsider their decision.
But when I asked, “Can I pass?” they didn’t feel as pressured. I gave them the opportunity to say they weren’t going to change their loan decision. This brings me to the second potential “no”. I discovered during the meeting that the CFO would lose face if he withdrew his commitment to the other bank without justification. A better offer was not enough. But by pointing out the risk of conformity of the competing proposal, I gave him a way out. A potentially non-compliant financing structure was not a risk worth taking.
Although the door was slammed after our competitor won the loan mandate, I still made the trip to Taipei and remained hopeful that I could get a deal done.
This is the lesson of the 3Ps. We receive more rejections than approvals in our lifetime. People will say “no” to us more than they will say “yes” to us.
But to achieve great things, the 3Ps method can help persuade others, turn no’s into yes’s, and push through rejection.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, and the opinions expressed do not necessarily reflect the views of the CFA Institute or the author’s employer.
Image credit: ©Getty Images/zhihao
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