Delivering Bad News With Empathy and Making Tough Decisions with Liam Leonard

Hello my friends, and welcome to another exciting episode of Negotiate Anything. This show is produced by the American Negotiation Institute and with over 5 million downloads and listeners in over 180 countries, listeners just like you have made this the number one negotiation podcast in the world. Hi, my name is Kwame Christian and I am the founder and CEO of the American Negotiation Institute here at A&I we believe that the best things in life are on the other side of difficult conversations and we are passionate about providing you with the best content that will help you to make your difficult conversations easier, both at work and at home. Lastly, I want to remind you that we offer consulting and conduct trainings both virtually and in person all around the world. Our focus is in three main areas. First, negotiation and conflict resolution. Second, leadership and lastly, diversity, equity and inclusion. Check the link in the description below to learn more about how we could work with you and your team. And now, without further ado, let's jump into the interview. Liam, thanks for joining us today.

Excited to be here, Kwame. Excited to share whatever perspective I can and help enrich some lives.

Yes, it is exciting to have you, my friend. So how would you get us started? By telling us a little bit about yourself and what you do.

My name is Liam Leonard. I work with essentially high net worth individuals and invest on their behalf in real estate. We work primarily on the debt side today where we're negotiating essentially loans with borrowers that are collateralized or backed by real estate assets, most of those being residential homes, but some commercial properties as well.

This is great. And listen, Liam, my humble friend, please let the listeners know about your podcast too.

So I'm also a podcast host. That's where I met Kwame originally and it's all about the prosperity perspective. So the idea, our listenership is primarily entrepreneurs and the idea is giving stories of people who have been successful like Kwame and how they're taking snippets in terms of how they can give back from their journey and how they've been successful to entrepreneurs who are starting to go through that front end of the journey as well and so been giving back in that regard and trying to help people become more prosperous with their futures.

This is great. Yes, listeners make sure to check that out. I'm a fan of the show but of course I'm biased because I've been on it, but make sure to check that out. And so there are so many different angles. We could go with Liam too because he has a background in purchasing. So I know we have a lot of listeners who are in procurement and supply chain world and people who are in sales listening for insights on how to beat the supply chain folks in their negotiations. And then obviously, with the investing and the new business that he started. But today we're going a bit of a different direction because one of the things that has been consistent in the last few years is inconsistency. There's a lot of change happening, happening all around the world and in our workplaces. It makes it really difficult. And so I know Liam has gone through some changes in his company. So what we're going to do is we're going to talk in general about what those changes were and then we're going to use this essentially as a case study to discuss how difficult, conversations, negotiations, played a role in making that successful. So, Liam, how about you just start us off by painting the picture for what was happening on your end?

Yeah. Excited for this disposition with attorney Kwame here today. I say jokingly, of course, background. So we're in the lending business, right? We, we give loans primarily. Our primary business is for real estate investors who are doing fix and flip type properties. So if you've watched HGTV and you see Chip and Joanna Gaines and you see Tarek and his girlfriend and you know, love it, hate it, all those shows where they're going in and they're fixing it up, typically they're using money from people like us to go and do that simultaneously. Over the last couple of years, we had launched a conventional mortgage business. And the idea being some of those people who are rehabbing the houses wanted to keep them for long term rentals or do Airbnb rentals or things like that. And we wanted the ability to essentially refinance them and create one cohesive experience for them. What we found as the market began to change, with interest rates on the rise, with decline in the overall stock market, some macroeconomic challenges that are creating a lot of volatility is that this business, the conventional side of the business, was always less profitable, but there was a lot of strain on that side of the business, on the supply side in terms of where we were getting the deals from and how many deals were available. And this is the conventional mortgage side that I'm talking about. So these are people who are buying houses or refinancing houses. Well, when interest rates go from 3% to 5%, no one wants to refinance. There's no need for them to refinance. Right. So a lot of those transactions essentially dry up. And then from the purchases, you're looking at Essentially new homeowners, people who want to go buy another home or second home. Well, as interest rates have rised, that's made it more expensive. And as the overall appreciation in the market has increased, it's made it harder and harder for people to purchase. You couple that with a market correction and the overall purchase volume, people who are looking for homes is starting to change. So the last several years we've been in a, a huge seller's market where there's been limited inventory and tons of buyers. Well, the buyer's numbers are starting to shrink. And that's making it putting more pressure on that side of the business in general, where you've got the same amount of people trying to do loans for maybe a quarter, maybe even, you know, 20% of what the volume was 18, 24 months ago. And it, it starts to put a huge strain on the business.

I know for people that I work with and clients and things like that, and even in our industry things, things change and they can change really quickly. Then as the leader of the company, it's your responsibility to figure out, well, what do I do as the, as the tides change. And that's one of the biggest challenges of leadership is making the tough decision a lot of the times. And so can you talk us through some of the. Actually before, actually we go into the tactical side. I think it'll be helpful if you paint the picture of the leadership structure too. Who else you have to talk to and get on board with these decisions before you actually move. Because if you are the sole owner, then you can make unilateral decisions, things like that. But if you have other people playing in the leadership positions too, we've got to include them. So let's paint that picture too.

Yeah, just paint that picture. I am the sole owner. A whole nother episode could be. I exited my partners earlier this year, so there was huge negotiations associated with that to become the sole owner, which then allowed me to make these decisions and move quickly when we needed to do that. So that part was a little bit easier in terms of org structure. Right. Essentially you've got me at the top and then I had the head of each of the business unit. We've got three kind of core business units and then support functions. How we look at the business, right? We had our investor side, the people's money that we're taking care of. We had the private loans that we're doing to the real estate investors, the fix and flippers, and then we had the conventional business, which was your everyday home purchases. And then support roles. And so that's kind of how we were structured there.

Yes. Okay. And so what's happening in my head right now, Liam, is the. I'm, I'm taming the lawyer in my brain that wants, that wants to investigate the exit of the partners. But you're right, that is a whole different episode. And so let's start off with a stakeholder analysis like you just did. Now we have an idea of who are the interested parties. And so these are the people who are going to be affected by the change. And now when we, we have simplified the process as the sole owner, but still, even though you, you have 100%, we still have to have these conversations, too. So let's now talk about some of the conversations you had to make as you were making these transitions and making these decisions.

Yeah, the biggest decision and the toughest decision was actually getting out of my own way. And there were two things I had to get out of my own way on. Number one, as an entrepreneur, I have very high self confidence. And so I approach things by thinking I can take it on, I can figure it out. I'm Superman almost. That was something I wanted to be able to do, right? But in that space, you're competing against Rocket Mortgage, right, Which is owned by Quicken. You're competing against all your banks, you're competing against everything you see commercials on where they're spending millions of dollars on a declining market. And you kind of scratch your head and you're like, okay, you know, would I want to be in this business? And so that was a hard part for me as an entrepreneur to say, hey, I'm here, I can build it, I can fight, I can gain market share. When in reality, you know, one of my board members put it to me best was, you know, is this a business you would go buy? If you were to sell this business, how much do you think you could sell it for, right? And when those answers are, I'm not going to buy a business in today's market and I can't really sell this for a, any meaningful sum, right? The, the answer was pretty simple, right? Which was, why are you spending time here? And so that was the first one I had to get over. The second one was the people. We are a people first company. We want to take care of our folks. I want them to be successful, I want them to make tons of money, right? I want to be able to continue to offer more and more benefits as the company grows, etc. And to cut a whole division felt disingenuous to that. And again, it was another board conversation where it was, do you realize how you're holding these folks back? And when you change the frame to, no, I want to fight for them and keep them on to I'm holding them back, it was like, oh, right. And I knew the business wasn't as profitable as the other side. I knew there were market conditions that were impacting it. And as such, I wasn't investing as much of my time on that side of the business. I was kind of letting it do its own thing. And the people who are on that side of the business who wanted to grow and be successful in their careers, I effectively wasn't supporting anymore. I wasn't helping them drive process. I wasn't helping them create differentiation. I wasn't helping them be competitive in a. In a changing market and as such made it very difficult. Right. For them. If I was to go on the other side to be like, why would I be with this company? Right? This company isn't really supporting me in my goals or my objectives. And so when I flip that and say I'm holding them back, then that conversation became really easy. Right? And when you have to have conversations with those folks that you're inevitably letting go because it doesn't fit with the direction you're headed, you can do it genuinely and with a full heart, right? To essentially say, look, your goal is to be a conventional loan officer. You want to be great at it. You want to be able to offer those products to the widest range of people. We can't help you there anymore. Right? Like, I've held you back from that, and I'd love to be able to help you go find your next role with your next company where you can be successful in what you want to do. But unfortunately, it's not here anymore because we're headed in a different direction and still being able to support that person in a meaningful way to achieve their goals, right. With acknowledging that you're just not the best person for that anymore. Right? And it goes back to that hero savior mentality of being the entrepreneur that I have to fight with, right. To say, no, I'm going to be the best boss and everyone's better off with me. Well, that. That simply isn't the case. Right. And being honest and true with yourself to say, you know, hey, it probably makes sense for you to go a different road was conversations we had to have.

Does your company invest in professional development training? If you believe that your team would benefit from a negotiation workshop, all you need to do is go to our website, fill out the workshop request form, and then we'll set up a time to chat. These workshops are completely customizable, and we've done them all around the country. Negotiation and conflict resolution skills are beneficial across all professions, but they're especially useful in procurement, purchasing, sales, sourcing, and contract management. Our calendar is filling up quickly and we even have some workshops scheduled for next year if you think you might want one. I'd suggest reaching out soon so you don't miss out. Check out the link in the description to learn more and we will be right back after this. Oh, Liam, why did we not have this podcast like two years ago? This would have been very helpful. This would have been incredibly helpful for so many reasons. But I think one of the things here is just recognizing that some of the things that are the best part of you can be supreme liabilities in other areas. Because as an entrepreneur, you kind of have to have that edge on you. I'm willing to take on the world and I can do all these types of things. And you have that, and that's good. You have to have that little bit in you. But then that same mentality can make you believe that you can out think, outmaneuver your way out of an outmaneuverable situation. Right. You can't. I cannot win in an unwinnable situation. Right. And so what's fascinating to me about this story is that you needed help to see that in order for you to make the right decision. And that board helped you to change your perspective so you could do what needed to be done. And so can you tell us a little bit about your mindset before the board had these conversations with you and then your mindset after? Let's go deeper into that.

Yeah. So headed into the board conversation, in the back of my mind, I knew something wasn't right. Right. And there was an element where the business was, you know, hovering around break even profitable, some months unprofitable, other months. When you're looking at it in a silo, we changed some of the leadership positions to hopefully get someone new in there who could deliver on process, deliver on business building to be competitive. And it just, it wasn't working. Right. And the idea of bringing someone in there was so that I wouldn't have to invest the time because that's not where my focus was. So there was something back of mind with me that was always like, I'm holding on to something that is holding me back almost. Right. But it was the people and it was myself. And so going into the board meeting, right, I essentially had a conversation of like, hey, you know, this is something I think maybe we should do. And, you know, here's what a tentative transaction plan, a transition plan looks like. And the board basically looked at me, and they're like, you know what you have to do? You just need to do it, right? And they walked me through a couple questions, and, you know, one board member was like, he asked a couple questions, and then he goes, okay, it's a done deal. We all agree, like, you need to just go do this. And it was like, two minutes, right? Like, no more conversation needed. You just need to go. And it was like, huh? Right? And so the challenge for me in the entrepreneurial side, right, is it's lonely at the top, and there's no one to help act as that sounding board. And so I created a board to effectively be that sounding board. And that's exactly how that dynamic worked out, right, in terms of helping me understand some of these reframes of what's holding me back and keeping me and the company at mediocrity, keeping others at mediocrity, where I'm holding them back from what they want to achieve, and really aligning and going, you know, where we can be most successful. So the conversation with the board, I've prepped them to be brutal and honest, right? There's no benefit to me for them to sugarcoat things. And so that's where they come back, and essentially in two minutes, say, you need to cut an entire division, and how quick can you do it?

Wow, this is incredible. And so I heard this great saying last year. They said, the universe whispers before it yells. And I had breakfast with a buddy, Lance Tyson, who was a guest on the podcast this morning, who was a guest on the podcast a few months ago, and he said, yeah, I have a board. And he described essentially the same scenario, like, a similar scenario that you did. Like, hey, this helps me to think better. Like, think more thoroughly. And now you're saying it. So I'm like, okay, so the American Negotiation Institute will get aboard. I think it's settled. So thank you for this. And, listeners, no, I haven't forgotten about you. I will be your advocate, but I'm taking my coaching right now, okay? And the other thing, too. Now, let's make this actionable for everybody else. When it comes to being really persuasive, one of the things that I've realized is that you need to be persuadable. You need to be willing and Open to be persuaded. And I love the fact that you, even though you have that entrepreneurial edge where you believe in yourself, you also believe in your own limitations as a regular mortal should. Right? And that's why you have the board. You have them there for a purpose, to give you hard truths and then they gave you the hard truths and you were humble enough to accept it and. And then move on. And I think this is something that is kind of. People brush over this a lot. Hey, you get good advice, listen to it. But it's really not that simple. And I know for me, I'll just speak for myself here. I know there were times in my life where people would give me good advice, but I would resist. And I had to grow a little bit more in order to accept that advice, even though it didn't feel good and then make the decision. And so for you, can you tell us a little bit about what helped you to get into that mentality where you could accept hard truths and then. And make the necessary adjustments?

For me, that goes all the way back to childhood and part of my upbringing. My dad was born and raised in Hong Kong and brought very much a, if you've heard of Tiger mom type of Persona to how I grew up. I've got two younger brothers who grew up in the same kind of environment and we just pushed each other all the time. And so there. There was no place for weakness, there was no place for failure. There was no place for. You couldn't hide. So if you came up with an excuse or you came up with any self pity, you were berated and you were driven until you actually made a change or you acknowledged that you know something in this was for you. For me, we didn't talk a lot about the background, but I played soccer at a very high level growing up, represented the US over in Europe in a couple tournaments and down in South America representing youth national kind of interest. And then decided I went to Yale for economics. And so you see the tiger component that's coming out, right? Like only the best in you will be successful and achieving, you know, acceptance from my. My parents as well as my reaching my personal best were always first and foremost. And that allowed and instilled in me this element of coachability where I'm really bright and I'm really smart in a lot of areas, but I can't be that person everywhere. So how do I take the knowledge and learning from everyone else and. And bring it all together, right. And know that someone else might have something to offer? In fact, I have a sticky note that was on my desk for a long time, right, which was like, find the nugget that everyone has to offer you. I try to take away something in every conversation, right. Regardless of walk of life, where they're coming from, there's something you can gain from all of that. And when you take that perspective in, you're constantly looking at ways to improve yourself. That coupled with religious background for me. And so as a Christian, I'm imperfect. And when you acknowledge that you're imperfect and you, there's only one way to continue to improve, right? And setting the baseline effectively low and saying, hey, I'm going to build up from there has been very successful for me. I grew up in the corporate world. I worked at Nestle Pepsi T Mobile. In order to be successful in the team, you've got to be. You've got to know how to negotiate your way around politics. You've got to know how to maneuver and take feedback. You've got to know which one to be actionable upon, which one to leave at the wayside. And so had a lot of training to prepare myself for that decision going into the board, right? And that conversation with the board and even going back right in the board selection and the conversations with the board, they're looking for that coachability too, right? Because these are guys who are giving their time, primarily their time. That's their most valuable resource, right. And their experience to you. And if you are not open to the suggestions they're giving, they're not going to be there. There's no reason for them to be there. Right. If you think you've got it all figured out or you're, you've. You're good and you don't take the feedback and you don't honestly and authentically try to take it to heart, you're not going to have a board that's actually going to be successful for you. And so that's how I was able to get the members on the board in the first place, right? Was to be able to say, you know, this is how I think, you know, I fit in. This is where my limitations are. This is where your expertise is, where I think you can add a ton of value that I want to tap into and creating this mutual situation where they can learn and they can be part of an amazing company who's growing really fast and be rewarded for that. And on the flip side, I get to tap into their time and experience.

This is a great answer. And I'll synthesize why it's Such a great answer in just one sentence. It was learned. It was learned. I would have hated for you to have said, I've just always been this way. I'm like, liam, what good are you? But, yes, really, what you're demonstrating is through your experience, your various life experiences, you learned that this is the key to success, and it really is. You know, and when we are vulnerable enough and humble enough to actually accept what other people say, especially in a difficult conversation, it sets us up to be more persuasive down the road, because we're essentially showing them how they should interact with us. At some point, maybe not today, I will say something of value.

And I.

Hope you respond the same way. So, Liam, I love this answer. This is really good.

Yeah. And for me, it's about failure. Right. I embrace and I love failure because failure leads to the learning. Right. And without the failure, you don't learn because you think you're doing everything right. And so I find those moments of uncomfortableness and failure so that I can grow and develop. Right. It's the only way that I can develop the skills that have gotten me to where I am and will get me to that next level.

Absolutely. And you know what's funny about this? And we'll. We'll see what the. Where the rest of the conversation goes to, because I. I did not expect it to go this way. Right. You know, talking about the ability to be persuaded, the like, the humility and learning and listening, like, that's so critical. I didn't expect it to go this way, but I'm really appreciative that it did because it's necessary. And also, it shows us this. This really important fact, because. But if we were to think about this just as a. Almost like, let's use it as a case study. Back at Yale, when you're in business school, if you were to analyze this case study and say, what is the decision that this entrepreneur, this unnamed entrepreneur should make in this moment? It would be probably pretty easy to analyze and say, yeah, we need to cut this division, focus on the parts of the business that are profitable. But when you are that person, it's very difficult to make that assessment because you're so close and you have those emotional connections. Then when you had that conversation, it opened you up to it. You were willing to do it. And now we have these conversations with the people on the team that you care about that are difficult but not necessarily strategically challenging. Can you talk about your mindset going into it, how you felt emotionally and how the Conversations went, yeah, for me.

Really level headed, right? Because at the end of the day I knew it was in the best interest of the person that I was talking to. And I don't approach a conversation until I realize what's in the best interest of that person. And once you establish that it's in the best interest of that person not to be with your company, it's very easy to have the conversation to say, you know, this probably isn't the right place for you and how do I support you to get where you want to go? What does that look like? Do you know what? If you know where you want to be, let me help you. I've got a very vast network, I know a ton of people I can help support you to get you where you want to go. And so those are easy conversations to essentially have a strategically because you've aligned on where the value is for them and for you. And then emotionally you're approaching it as very grounded and very heartfelt, coming with the best interest of that person in mind. One of those conversations was led by a manager who didn't quite feel that peace, felt like he could still save the person and wanted that person to still be here. That conversation did not go well because they didn't realize that the value where that fit and hadn't come to grips personally with having that conversation. And so then once you start getting asked, questioned from the person you're having that difficult conversation with, you don't have a foundation for which to respond in any meaningful way and the conversation deteriorates rapidly. But when you're, you're there, right? And you know, one of the people asked me, they were like, you mean I need to find a different job? And I'm like, you get to find a different job with a company that's going to best support you. And I'd love to help you, right? If you want to stay in that area, I've got three or four recommendations that I can make for you and get you set up, right? You're strong performer and want you to continue to, to succeed. And so transitioning it to them realizing it's their best interest is huge and helps them feel it helps ease the transition. Right now, they don't all go smoothly, right? People don't like the idea of someone telling them that they're not worth it, right. At the end of the day, I think that's what it boils down to, right. We strive to be worth it. So we do a lot of things to gain favor from people or positive impression that take us in different directions. And I think on the other side, when you hear something that you feel is like you're not worth it or you are being let go or this job is no longer here is really tough. And I think it's just an acknowledgment that you're delivering tough news and people need time to process and people process information very differently. And so you can't approach the conversation the same way. For every single person, it's got to be tailor made to how they're going to respond. Right. And so that emotional or defensive person, great, we need to deliver the news and then we need to have a follow up conversation. Right. To, to help them understand and see and give them some time to process all of it. Right. And that's very different than the analytical person who you can probably walk through how this is going to be better for them on that call and they walk away being like, makes perfect sense. When do I go? Right. Different. Right? So I think, but it's being grounded. If I was to synthesize, be grounded in, you know, you're doing the best thing for them and what that looks like. Right. And even people who aren't performing right, eventually I get to that spot of this is the best thing for them. Right. Either they're not addressing things in their home life or their professional life that need to be addressed and they're using this as a crutch. Well, if I continue to be that crutch for them and allow them to continue on accepting mediocrity, how does that benefit them? Right. How is their self worth ever increased? Right. How are they ever going to resolve the problems? Right. And it's not my job to solve the problem for them, but I sure certainly shouldn't be enabling them with a problem that, you know, I've been able to identify or see.

Oh man, this is so good. I feel like this has turned into a therapy session for me. This is hitting home in ways you have no idea. This is great. This is great. And I know a lot of the listeners are having that same kind of revelation because you've simplified it. Because what's interesting about this is that a lot of times people come to the content to the TED Talk, the books, whatever, and they're looking for a silver bullet like how do I have this conversation? How do I have the conversation? How do I have the conversation? And the, what they're looking for is an answer that they want to hear. They're looking for the solution that they want, but the Solution that they want doesn't exist, because what they're looking for is really something that predominantly and primarily assuages their emotional discomfort. I know I need to have this difficult conversation. I know exactly what decision I need to make. I know exactly how this needs to end. But I am terrified of this conversation, and I'm afraid of how they're going to respond, and I don't want to put them in distress. So, Kwame, can you come up with a solution that makes me emotionally okay with whatever happens and the other person respond really well to it? No, I can't do that. And you articulated it really well, because these conversations, strategically speaking, are not that complex. They're just emotionally very, very heavy. You have to tailor it to the person who's in front of you. Different people will respond differently, but there's no way to make this palatable and enjoyable for the people involved. And once we come to terms with that, then we can do what we need to do. And then I love this point, focusing on what is best for both parties. You have to protect your interests, of course, but then you realize that even though they might not like the decision you're making in the moment, you can still sleep well at night knowing that in the long run, this is the best decision for them, too. I think this is a. A brilliant approach, Liam.

Yeah. When you come from. When you come to the conversation from a place of power. Right. Meaning you have clarity on what you're doing, why you're doing it, why it fits, what. How they fit in. Their reaction is not a input into that consideration set. Right. Because you don't control their actions. Right. From a place of power. It's. They will react the way that they will react. And yes, there's a way I'd prefer them to react, but at the end of the day, I'm very confident in why I've made the decision, how I'm making it, that I'm looking out for them. And if they don't see that, that's unfortunate. But I feel really good about how I've approached it.

Oh, I love this, Liam, brother, this is good. This is very, very good. And I know listeners are saying, man, it stinks that Liam has to go. I wish he had a podcast or something. Can you remind him about the business, how they can get in touch with you and about the show? Of course.

Yeah. So to listen to my podcast, you can go to the ProsperityPerspective.com and find the podcast there where we're talking with successful entrepreneurs to give tips to those entrepreneurs who are going through something similar or early stages themselves to get in touch with me. You can reach out to me on the show there or you can send me an email at Liam Leonard mlcap.com Kwame can put that into the show notes for you so you can get it there. But happy to chat with people who want to know more or if I can help in any way enrich your lives, would be happy to do so.

Liam, I appreciate it. This is great. You have a good one.

Thanks for me. Take care.

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