#114 How CEO’s Handle Difficult Conversations (Ways I Wish Someone Had Told Me)

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You have been communicating your entire life the wrong way. Like the entire world is like you, a nice person, a good person, good intentions, trying to do the right thing. Here's the truth. The world is not like that. There are difficult people all around you every single day, and there will be more. The secret today that we're going to talk about is that you can take back your peace and power from toxic, obnoxious, hard people, even people you love who are also just difficult. But in order to do it, you need to know the rules of the game. And most people don't even realize the game they are playing. So today, let's get those rules and communicate to get what you want, even when other people say it's impossible. We'll back it up by science, history, and the greatest communicators of all time. Let's steal their homework. Welcome back to The Big Deal Podcast. I'm Codie Sanchez. Let's dive in. Most people don't lose their power because they're wrong. They lose their power because they communicate like the other person is reasonable when they're not. Do you ever think you're exchanging information but realize that the other person is negotiating status, blame, or control? Psychologists call this motivated reasoning. So people don't actually listen to understand you. They are hearing to protect their identity. So Harvard Business School found people interpret facts in ways that protect their ego and self-image. Not accuracy. And do you ever wonder, like, how do you actually beat them without becoming one of them? Well, maybe you haven't noticed this, that the most difficult person in the room often gets their way. They interrupt, they blame, they drain everyone else, and somehow they walk out the winner. Meanwhile, the reasonable person, calm, ethical, they walk out exhausted, pissed, kind of confused. Toxic people don't win because they're smarter, which is good. They win because they're playing the game differently. What Harvard shows us is that this dominance behavior shows that people who display low emotional reactivity and high certainty are perceived as higher status, even when they're wrong. So toxic people are persuasive, not because they're right. They're persuasive because they're unmoved. They have low emotional reactivity, but they really act like they know what they're talking about. So how do we win at their game? I think about this as the asymmetry advantage framework. If they are willing to create discomfort in you and not have emotion from them, they can exploit your asymmetry. And there's two types of asymmetries toxic people use. One's called narrative asymmetry. They tell simple stories. Yours are too nuanced, 'cause nuance is usually the fact. Cognitive fluency research shows simple narratives are believed more than accurate complex ones. So whether you hate Donald Trump or you love Donald Trump, what can we say for sure? He is simple. That is why his communication style works very often because nuance is hard to remember. They say on average, we can only remember 1 to 2 sentences from an entire 10-minute conversation. Yikes. So clarity beats correctness in human conflict. So that's one. Take your stories, simplify them. Don't add maybes, buts, also, ands. One sentence. That's it. The second asymmetry. That people use who communicate well, which is called boundary asymmetry. They take space. You ask for permission. Clinical psychology says boundary violators persist when boundaries are inconsistently enforced. This is from the American Psychological Association. What does that mean? It means you need to control the frame. Let me give you my frame control rule. So whoever controls the conversation will control the outcome. And this comes from hostage negotiation and power dynamics. For instance, If you are going to have a conversation with somebody, they give you a tight one-line sentence, you wanna respond in an unnuanced way. What do I want you to do? I want you to listen to their one sentence and then I want you to hold out your hand and just go, "Let me think about that for a second. Let me ponder that. Let me analyze that for a second." Whatever word you wanna use. And then instead of feeling like you have to start talking immediately in order to regurgitate exactly what you're gonna say, no, no, boundary control? Hmm. You say, I'm the problem. The math says this is the problem. Use a redirect and have a one-liner. I actually learned a lot of this from one of my friends, Chris Voss, who wrote Never Split the Difference. Huge book. I go back to him again and again when I wanna control the frame. And what he learned, uh, at the FBI law enforcement was that reframing emotional accusations reduces hostility faster than a direct rebuttal. When someone says, "You never listen to me," what do you actually wanna say? You wanna say, if you're me, "That's not true. I listen all the time. This never happens with me and my husband." Of course, that's the wrong response though. The correct response is a frame reset. You are gonna repeat back to them, "I understand that you feel this way. Can you be more specific with me and tell me what you think I am not listening to?" And when you do that, I can bet my bottom dollar they might say, "I don't feel that way. That is what you're doing. And your response is gonna be, I don't wanna debate words in an argument. I don't believe that's useful. What I heard you say was you are unheard. You're not accepting their frame. You're not saying, I didn't listen to you. You're repeating back to them what they said. So, you know, when I went head to head with another MD, managing director at First Trust, I had this exact same issue. He was trying to box me in. Make me feel small. He was trying to tell me that what I was talking about was wrong. And I remember the line explicitly that he said to me back in the day. He said, "Well, I haven't done that because you've made me feel like I don't have the power to do it. You've completely— this is your fault for the way you communicate." First of all, this is like a very middle-aged man. This was a full adult. And so I always do giggle when somebody says, "You make me feel this way," as if I'm like, okay, guy, take it easy. But anyway, I listened to it and I said the exact same thing. I said, hey, I don't think I have control of your feelings. Are you saying that I can control your emotions, your emotional state, what you feel inside? That's not up to you, that's up to me? What do you think happens? Well, no, of course, you know, no, what I'm saying is. Okay. So I said, so instead, what do we wanna try to resolve? And so I want you to try this. Tell me how it works for you. Do not accept somebody else's frame. And by the way, we're not being combative because oftentimes this is with people we love. It's not always in business. It could be in love. This is just a way to make sure that you become a person who has boundaries. How do you respond to disrespect? You know, back in the day, I always wanted to be like one of those characters on Entourage, like Ari, if you guys ever watched that show where he just, he fired the heat. Like somebody came at him and he just had a response. And I'm not like that. I'm actually a wuss. And so I developed something I called the disrespect response ladder. And I was like, okay, I need to figure out a path to use. And I'll show you that. But when somebody disrespects you, you kind of have 4 options. And most people jump to the worst one. So level 1 would be absorb. This is really weak. So you just say nothing. Resentment builds, respect drops. This is normal for people like me who are a bit of an avoidant. Like, I just don't wanna deal with it. I don't have time for this, you know? So if that's you too, I hear you. I'm the same. Level 2 is react. This is explosive. Yell, defend, explain. You look unstable and absorb their frame. Level 3, explain. This is more naive. I do this too. So over-justify, you over-talk, you signal insecurity. When I first tried to get a job, I was notorious for doing this. "Hi, my name is Codie Sanchez and these are all my accolades and here's exactly why you should hire me and dah, dah, dah." I've learned over time, little pause, "Exactly what you need. Not a single word more." Now the God-tier level response is level 4, which is name plus redirect. "Hmm, that comment feels disrespectful. If you want to talk, I'm open. If you want to attack, I'm done for the moment. This literally just happened to me the other day, you guys. I was dealing with a leader at one of our companies and I gave him some hard news that somebody else was going to take a role higher than him. He did not like this news, proceeded to start cussing. This is fucking bullshit. I'm worth 10 of this guy. Bullshit. Fucking blah, blah, blah. And I had to say, this is a call with executives, executives at my companies. They don't cuss emotionally. So if you need to take a minute and stand outside until you can emotionally reregulate, that's perfectly fine and come back in. But we don't do angry cussing at the executive level. That basically says, "This is my line," and it's hard to argue with an unemotional, clear line. This goes back to that idea of assertive communication with calm boundary setting that is perceived as dominance. Which is kind of crazy, isn't it? A fancy way to say the key is calm is actually better than loud. Short is better than long. Still is better than emotion. And my friend Jefferson Fisher, who I had on the podcast, it's a great episode by the way, you should listen to it after this, has a great line about this. He says, "You don't have to attend every argument you're invited to." Ah, so good. And then he also says, "Silence can never be misquoted." But if say they keep gaslighting you and you don't know how to defend against it, I got a little protocol for you guys. Think about it. This is our gaslighting defense protocol. Gaslighting is reality erosion. It's things like, "That never happened, but you know it did." "You remembered it wrong, but you know that that's how it happens." What it actually does is this increases cortisol and anxiety by destabilizing perception of reality. This is from the American Sociological Review. And this is actually used in torture, which is crazy. But let's set a couple things straight. Even though you don't see reality the same way, there are a couple studies that are fascinating that I think can help you even explain to the other person who's making you feel a certain way that maybe it's not gaslighting, maybe it's just human nature, because we do have a different perception reality in almost all events. So self-belief is really about knowing yourself, your abilities, and knowing your path. And it's part of that path that many of us get stuck on, which is actually why I created something called Main Street Millionaire Live. And it's for anyone whose path includes business ownership. Whether you've already bought a business or you want to buy a business, we help you find and buy the best business for you because business ownership, I believe, will change almost everyone's life. I know that if you come to this event, it will change yours. It will help you believe the truth, which is that you are capable of ownership and can win at the game of owning things in life, which is the only game that leads to financial freedom, asset ownership, and overcoming what I think holds a lot of people back. And so if you don't think you're good enough to become an owner, to get to the next level, I wanna talk to you about 4 studies that totally changed my mindset on that. The first one's called the Invisible Gorilla. So in the famous Chabris and Simon experiment, participants watched a video of people and they were like passing basketballs. Have you guys seen this? And people were told to count passes for one team. So you're watching it, you're counting all the passes, you're kind of focused on that. Well, in the middle, a person in a literal fucking gorilla suit walked through, stopped, thumped their chest, and walked off. What's crazy, and I swear this happened to me, half the viewers, Codie Sanchez Sanchez, never saw the gorilla at all, even though it was literally in plain sight. But I had told my brain that I was only watching this thing and I was gonna get those numbers right. Totally missed the gorilla. Study 2, I see it clearly, you're biased. Social psychologist Lee Ross called it naive realism, which is the belief that I see the world objectively and people who disagree with me must be uninformed, irrational, or biased. And there was a perfect way to think about this. Like, two siblings read the same news article about a political protest. One sees dangerous extremists, the other sees brave citizens. Each is certain they're just describing what happened. When they argue, they both feel like the other is literally blind. In reality, they have all of these preset beliefs and identities that color what details they notice, how much weight they give them, and what story they assemble. So they literally live in two different realities from the same article. This is also like selective attention. So your brain cannot process everything. So it spotlights what matches your current task, fears, goals, or things you've told it are important. That creates unintentional blindness. And there's lots of mental models about this. So expectations, culture, past experiences, they act like lenses and they decide which data counts, what gets ignored, and that allows you, your brain to create a personalized version of reality. And so the moment you think, "I'm just being logical," you actually stopped listening. The moment that you think you can't buy a business, you actually have just been pre-programmed to think you can't. So how does this show up in your fights and communication? A couple examples. You might say, "You ignored me at dinner," and their reality was, "I was trying to handle the check and the kids, and I thought I was helping." You say, You never appreciate what I do. Their reality, they do appreciate you, but their appreciation cues are invisible to you or not in what, you know, they famously call your love language. So the takeaway, same night, same facts, totally different edits because attention and stories are pointed at two different things. So you have to learn how to negotiate across these realities. You can say, okay, listen, last night it looks like we kind of watched two different movies. We saw two different realities. "Would you mind if we each described our version without interrupting?" This signals, one, there are two realities and both get airtime. And don't ask or assume. Swap the "Why did you do that?" That's an attack for "What were you trying to do there?" Curiosity. You're asking for the intention behind their movie. You're not cross-examining it. And then you can mirror their keyframes. So repeat back their big beats. So in your version, you were stressed about money, trying to solve it fast, and my feedback felt like attack. People relax when they fear their movie is at least understood, even if you didn't see it. Now what's great here is unrelaxed people do not come to the table. And so you are going to be this calm on the balcony in the storm. So you're gonna stop arguing about whose reality is right. Say both can be true. In your reality, you were helping. In mine, I felt alone. How do we design the next scene so we both feel on the same team? This is key if you wanna be a CEO in business. You need to negotiate forward, not backward. Instead of replaying the old scene for the 12th time, you could say, next time this happens, what do you need from me? Here's what I need from you. This just happened to me. I had a member of the team and my team, and, and he's a super high performer, great team member. I gave very direct feedback to something that we had done because I sometimes have the emotional EQ of a Tasmanian devil. And so I just don't really think about it. I go, here's the feedback. I know you worked on this thing for 3 years, but here's all the things I hate about it. I only focus on the stuff I don't like. So I sent him very direct feedback. Bam, bam, bam, da, da, da, da, da. I didn't mention anything I liked. I didn't mention how great he is. I just gave all the hard feedback. This sent him into a spiral. I've done all this work, da, da, da, da, da. So once I realized he was on this spiral, My role, what do I do? I call him into the office, I sit him down, and I say, "Hey, I just want you to know how valued you are here, how intelligent I think that you are. And I wanna tell you something about the way that I communicate. With people that I trust, people I think are super capable, intelligent, and I would consider one of my leaders, I don't have a filter. I talk just like Codie with no sort of rose-colored glasses or hand-holding happening." That can be too much for people. It can be pretty abrasive. And so I wanna tell you that I thought your project was great, but I always default mode think your work is great. And because I think you're so good, I'm only gonna give you the edits. How can I communicate better with you? And the guy was like, actually, no, I do want you to just give it to me. Tough. And I said, okay, well, if that's the case, then next time, if you do feel that little ping inside where you're like, God, she doesn't appreciate or whatever, do you wanna just say a word to me? And I like using a word that's ridiculous. So I'll be like, blue-throated mockingbird. Just say blue-throated mockingbird. And I will know that that means I kind of pissed you off and you don't feel like I saw you. And I can be like, oh, whoops. Hey man, here's what I actually think. Can I give you some context? And I find that when there's a high degree of trust, you can have a trigger breaker that basically breaks up the standard communication and it changes people's state. So try this and see if it works for you because Sometimes they are difficult or toxic people, not people you love, but sometimes they're people that you love too. And so I want you to remember that it's okay to say, "We remember this differently. Here's what I'm confident about. Here's what I'm not debating." And then stop talking because one of the other things that's true is silence is devastating to gaslighters or emotion. It can kill either one of them. So one of the most powerful things that you can do in communicating is to never be emotional in a world of people who have never emotionally matured. Projection theory shows people attribute their own traits and insecurities to others, right? This is from a famous study by this guy by the name of Newman, I believe, back in like the '90s. 90% of insults are just self-disclosures. So when someone says, "You're selfish," what it often means is, "I feel deprived." So you have to mentally reframe them. What would need to be true about them for the behavior to make sense? This allows you to create that balcony emotional distance, and that distance creates power. I mean, Jefferson Fisher also says something amazing that I really love, which is, The first thing about standing up for yourself is knowing when to do it because not everyone is worth getting outta your chair for. Also, he's like Texan, so I love these little one-liners. He's like, not everyone is worth getting outta your chair for, you know? Like, you're right, shucks. So this ability to not take things personally shows your self-respect. And I'm going to tell you the truth, that it makes people who are trying to manipulate you super uncomfortable. I remember I was getting pushed out of a company And this guy wanted to intimidate me. And thankfully, I do believe like a pound of pre-production is worth 5 of post. So I found out about it ahead of time, and he might have sidelined me, but I found out about it. So I did a silly thing, which is I brought my Navy SEAL, very scary husband who has a constant resting bitch face, a lot of muscles, and an ability to, you know, kill people with me to this meeting. And Matt was not expecting that. So we sat down at a hotel, and I could see he just like starts twitching, getting nervous, whatever. And I could tell that he was just going to leave it. He's like, "I'm going to wait until Codie's buyer says something." myself and I can try to intimidate her. But what did I do? I brought it up instead. I said, Matt, I know what you're trying to do. You're trying to push me out of the company. You want to take all of these assets that I've raised. You wanna push me out. And I know this because of X, Y, Z. And he's like, oh, well, no, da, da. I said, listen, this isn't a debate. I already know. And so the next question is, what are we going to do about this? Because I am not going to do what you want me to do here. And this is something for you to know. Like, you have to decide how you get defined. And it's not just about holding yourself or others accountable. It's about the way that you allow them to write your story. So I don't want you to fall into what I call the accountability trap, which is when someone says, "You never do what you're going to do." I instead want you to use that specificity switch we talked about, and I want you to make sure you stay away from things like never, always, And instead, I want you to say, tell me one example you want to address, right? So why this works is because the more we can get somebody like Matt to go, oh no, I'm not doing that. I go, no, no, you are. I heard about this conversation. Now what are we going to do about it? Well, that allows these false accusations to collapse under precision. Valid ones become solvable. Okay, you want to push me out? What's the contract? What are we going to do? And the research says that specific feedback leads to resolution. Vague blame escalates conflict. So keep it simple and specific. Uh, there's sort of like 3 rules of power communication if you're gonna try to negotiate something like I did with Matt. So if you have somewhere where you know somebody is bullying you at work, uh, your boss wants to push you out, uh, you have an employee that's toxic that you have to fire, um, you have a, what, what is called a crucial conversation. You're gonna slow down. 'Cause slow speakers are perceived as more confident. Remember, there are studies that show that slower cadence increases your authority perception. So you're gonna say less, you're gonna end with direction. You're gonna say, here's what happens next. You're not going to leave the conversation open-ended because you actually beat them by having a very clean exit. So we're gonna cut the frame. You're never gonna argue their accusation. If they say, you always try to redirect me, Codie. You're gonna say, "That's not a useful direction. What outcome are you asking for?" You just removed their emotional hook. Then you're gonna L, limit exposure. Toxic people don't wanna change with feedback. They change with reduced access. So you're gonna say, "Hey, we're not gonna communicate that way. Hey, you're not gonna speak to me like that." Then you're gonna E, enforce consequences. Boundaries without consequences are just suggestions. That's not what we're going for. So you're gonna say, "If this continues, I'm ending this conversation." Then you might actually have to end it, by the way. Back yourself up. You might have to end it because consistent consequence enforcement is going to reduce repeat violations. So if I let that employee keep cussing at me, well, he probably would keep cussing at me the next time. Then you're going to use an A for anchor reality. When they distort facts, don't debate. Say instead, here's what I'm willing to discuss. Here's what I'm not. We're going to reality anchor, specificity anchor, and then N No closure needed. This is critical. You do not need them to understand, them to agree, them to apologize. Seeking emotional closure from antagonistic people, that increases your stress. Lots of studies like on this. The power move is to say, here is how we are going to execute the end of this conversation. And you can walk away not liking the guy, not liking the girl, being mad. That doesn't actually matter. So if a business partner, an employee, someone creates conflict with you, remember, loudest person's gonna dominate early, but you're going to not. You're gonna stop explaining. You're gonna reduce access. You're gonna enforce terms, and suddenly they're gonna lose their leverage. And I remember like the moment I stopped trying to win emotionally, I won structurally. Think like, let that like sink in for a second. Stop trying to make them feel what you want them to feel. Do you care about their feelings? No, you care about the outcome you wanna get. And then also remember, like, toxic people don't win because they're evil. They win because everyone else is so busy trying to be liked. But leadership isn't about being liked. It's about being clear. So you don't beat toxic people by out-arguing them. You beat them by outlasting, out-structuring, and out-limiting them. And the most dangerous moment is when you realize you never needed to fight them at all. So the question you have to ask yourself is, do you want to argue with small people? Do you wanna allow yourself to become small because they are? Do you wanna be an asterisk in a paragraph in a book nobody reads because other people got to redirect you your whole life? Do you wanna just not be taken seriously by a serious person? Do you want to be remembered? And if you do, you gotta communicate these ways because unless you figure out how to communicate, you'll never achieve anything really big in your life. It is the key to the things that you want. So maybe Maybe you'll be like me and you'll come back to this video, you'll watch it again, you'll follow and subscribe, and I promise I will teach you the lessons that I wish someone had taught me, but most people were too afraid to tell the truth. I promise I won't do that to you. Okay guys, we'll see you next week. We are sitting on a generational wealth creation event. If you're here, this means you're a builder. As we're going through these next 3 days, I want you to know that the American dream starts with you guys by our little Main Street revolution. And then I just want to give you guys permission to take a leap of faith. If I knew then what I know now, I would probably do bigger deals. It's given us an extra layer of security that we never would have had. I am so excited to introduce you to some ordinary people doing extraordinary things.

We have to really take the time to make a meaningful connection. It's the fact that there is a lack of connection and the person just wants to be seen, heard, and understood.

Thanks for taking the question. Are there extra things that need to be done when trying to pay off bad debt?

Great question.

iBuyBusiness is so simple, even your grandmother understands them. That's the game.

It's you and me versus the problem. We're going to try and try to solve this together.

I know how to build trust in a very advanced way. How does buying a business fit into the vision for your life? Today my goal is to teach you some fundamental skills that you can use to accelerate your business. If you make a promise in the mirror, know that your word is freaking iron to you.

These people on Wall Street, they want to keep the normal people out of the game.

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