The following is adapted from a recent book Small Actions: Take 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 reliable ones. I call this the 3P approach:
Let me give you some examples of how to implement the 3Ps.
Check out before 7 p.m
Getting a weekend table at some of Hong Kong’s most popular restaurants can feel, with only a slight exaggeration, like winning the lottery. But there is always hope, and like all those people who patiently wait in line at the lottery counters hoping to buy a winning ticket, I can’t help but try my luck at my favorite Italian restaurant chain. Its thin pizza and aglio e olio the pasta is simply irresistible. My family loves Sunday lunch at the busy Kennedy Town branch. Of course, we usually make spur-of-the-moment decisions to go, and it’s almost impossible to book a table on the same day. But that’s where the 3Ps came in.
One Sunday afternoon I called the restaurant.
“Good afternoon!” – answered the woman with a cheerful voice.
“Do you have a table for four?” I asked hopefully.
“No sir, we are fully occupied,” she replied with a hint of regret.
“How about 6pm?” – I protested.
“Sir, we’re fully booked,” she repeated, probably thinking, “What part of ‘full booked’ don’t you understand, sir?”
But it didn’t stop me. “What if we leave before 7pm?” I asked.
There was a short pause on the other end of the line. “Let me check,” she said. After a few seconds, she replied, “Yes sir, we have a table.”
I used 3P to change my mind. Here’s how it works:
Perseverance: Show your effort
I didn’t hang up after she said “booked”. Instead, I counter-offered. When I offered to leave the restaurant early, I showed her that I could be flexible with my time.
Perspective: Understand the other person’s priority
The restaurant employee’s primary concern was not meeting my needs; it was to ensure that customers who booked a seat occupied their seats before the allotted time. She didn’t care if I wanted a table to celebrate my child’s birthday or my boss’s resignation. Getting angry, saying how much work I gave the restaurant, or threatening to never go there again didn’t work with her. Instead, I helped her do her job by offering her the restaurant hostess equivalent of options trading in finance. I gave her a contract stating her right (but not the obligation) to kick me out at 7pm.
But I wasn’t kicked out that Sunday night: there was plenty of room in the restaurant, so the option holder didn’t need to exercise his option.
They call me an eternal optimist, but I always hope that I can turn a situation from unfavorable to favorable. Many people would reject the fact that “we have a full seat”. Not me. I was looking for a compromise that would be a win-win for both parties. The restaurant is rarely full early in the evening, so I helped him use his resources more efficiently.
Can I stop by?
The ability to change “no” to “yes” is even more important in our careers.
When I was working at a bank, a corporate client in Taipei asked for a loan in RMB to build an office tower in Shanghai. It was a 10-year loan, and my colleague in the credit department had priced it accordingly using the People’s Bank of China (PBOC) rate for five years or more, which was then 5.94%.
In the cut-throat world of finance, this was not enough. Another bank offered the client a more “creative” loan structure. Instead of a standard 10-year loan, the bank offered a six-month agreement that would be continuously extended until the loan was paid off at the end of 10 years. This shorter term loan had a much lower interest rate of 4.86%.
My colleague came to me for advice on how to renew the deal. I offered a US dollar (USD) loan as well as a USD–RMB currency hedge to create a synthetic RMB loan with a total interest rate of 4.5%. It was cheaper than the other bank’s offer, but still a 10-year loan. We proposed our solution to the client’s finance team. They liked it and pitched the idea to their CFO. Feedback was positive.
I saved the deal! Or so I thought.
A week later, the client informed us that he could not accept our offer. Their CFO had already verbally committed to another bank before hearing our innovative proposal. We were devastated. I couldn’t understand why the client chose our competitor’s more expensive solution, so I asked if I could “drop by” for a coffee meeting in Taipei.
Over our lattes, I explained that under mainland regulations, banks in China are not allowed to price a long-term construction loan using the six-month PBOC lending rate. If a “creative” bank runs into trouble with the regulator, it could affect its customers. The finance manager of the client firm took what I said to heart. I left the meeting and flew back to Hong Kong the same day. The next day the client called and said we had won the deal. Again, the 3Ps worked.
Perseverance: Show your effort
I continued to engage with the client even after they rejected our solution.
Perspective: Understand the person’s priority
There were two potential nos here. First, the customer could refuse the spot bet. If I emphasized that the business trip was only to see them, they might refuse to meet. Accepting this may have made them feel obligated to reverse their decision.
But when I asked, “Can I jump in?” they didn’t feel that pressure. I gave them an opportunity to say that they were not going to change their credit decision. This brings me to the second potential no. During the meeting, I learned that the CFO would lose face if he reneged on a commitment to another bank without justification. The best offer was not enough. But after stressing the risk of matching a competing offer, I let him out. A potentially inappropriate financial structure was not a risk worth taking.
Even though the door slammed shut after our competitor won the loan, I still made the trip to Taipei and still hoped I could close the deal.
This is a 3Ps lesson. Throughout life, we receive more rejections than approvals. People will tell us no more than yes.
But to achieve great success, the 3Ps method can help persuade others, turn “no” into “yes” and overcome rejection.
If you enjoyed this post, don’t forget to subscribe Entrepreneurial investor.
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 CFA Institute or the author’s employer.
Image credit: ©Getty Images/zhihao
Professional training for CFA Institute members
CFA Institute members are free to self-determine and report professional learning (PL) credits earned, including content on Entrepreneurial investor. Members can easily record credits using them PL online tracker.