I remember when I sold my first car. It was a 4 door, Lima-Bean, green, 1979 Plymouth Fury III. I bought it at a steal for $400 dollars and…pretty much…got my money’s worth. I drove back and forth to college many times, landed it in the ditch more than once, and had a lot of fun hauling my buddies around for a couple of years. But being back home with a newer car, it was time to let the Fury go.

I put an ad in the paper and sold it for what I was asking…$1000 dollars…to the first guy who called. He didn’t have the entire $1000 at the time, only $600, but promised to bring the remaining $400 in 2 weeks…when he got paid. Two weeks went by and no guy. I called a few times but he didn’t return my call…and after a while I decided to pay him a visit. My visit didn’t go so well…he slammed the door in my face and I walked away mad.

I wasn’t sure what step to take next. Should I call the cops, take him to court, or try and repo the car myself? I talked to my dad about what had happened and that’s where I got my first real lesson in defensive pessimism.

Now my father wasn’t long on words…and what he told me was not, at all, in keeping with what I’d learned…from seeing him in action. Because the truth is, most of the time, he was somewhat of a hothead. But the suggestion he gave me…that day…helped me to learn something I’ve used many times in my life. What he said was “forget about it.” It wasn’t one of those New Jersey “fuhgeddaboudit’s” which means…pretty much everything. It was sincere advice…meant for me to just…let it go.

Of course I wasn’t on board, at first… “That’s easy for you to say” I thought.. “It’s not your $400 dollars.”
You see…I had this inner turmoil going on inside my head…over what was right and what was wrong. I was determined to get everything, I believed I was due. Because of the fear of being….taken advantage of, I wouldn’t allow myself to see that I’d already gotten more for the car than I paid…plus I’d been able to drive it for more than 2 years.

Thankfully I was still young and impressionable and I took my father’s small suggestion. Because doing so freed me. It allowed me to think of the worst case scenario…not getting that extra $400…and exactly what that would mean. And it meant nothing to me. Sure having $400 would have been nice but I already had another car. So I just let it go and “forgot about it”.

In an article entitled “How to Instantly Increase Your Bargaining Power In Any Negotiation” the author, Al Pittampalli, tells a story about going car hunting when he was 16 and learning a similar lesson from his father.

Al found a 1994 Buick Skylark that he absolutely couldn’t live without. He loved everything about the car but didn’t have enough money to buy it. So he started out by asking the seller to come down on the price. Seeing how bad the young man wanted the car, the seller quickly refused . The teenager was devastated, and asked his dad to loan him the money. His dad said no but helped him in another way. He started out by reminding him of the other vehicles they’d seen that day. Saying “…they weren’t that bad right?” Al reluctantly agreed and said, “…the Honda wasn’t too bad…it had a good sound system”.

His dad then told him to go back to the seller of the Buick…but this time, he said, “Instead of being so concerned with how cool you’d look driving the car, focus on the worst case scenario…not being able to buy it. Picture yourself instead driving the Honda and listening to that sound system.” With this picture in mind, Al went back to the seller and confidently asked him to lower the price. The seller…seeing a difference in the young man, realized that he could either sell the car today, or lose a willing buyer…and gave in. Al got the car for 20% less than asking price.

In his article, Al explains that he was able to do this by using what’s called defensive pessimism. Defensive Pessimism is defined as embracing the worst case scenario and mentally rehearsing how it is you would cope if it were to happen. What this does is give you the power to walk away from any negotiation.

Defensive Pessimism could be useful when buying a truck, or purchasing real estate, but I think the concept can be expanded into other areas…say getting sales, handling customer complaints, and human resource matters.

Let’s take a look at how it could be used when dealing with employees.

Employee relations is an ongoing buying process, everyday you decide whether or not to continue buying labor from each person you employee.When you hire someone to do a job there’s an unwritten contract that states you’ll pay them on a certain scale, hourly, commission…whatever. And in return for this pay, the person you hire is required to do the job.

Picture two people sitting at a negotiating table going over a written agreement.

On the one side you have the employer, and he considers his wants to be fairly simple. When the work comes in, he wants someone who is competent to do it. The work must be performed in such a manner that the customer is happy, nothing gets damaged, and the bill gets paid. The employer expects the employee to do this job while getting along with other employees, the traveling public, and pretty much everyone he comes into contact with while wearing a company uniform. And if the employer is lucky he’ll find someone who can do all of this while bringing more business in the door.

Imagine this all written out in a nice one page document ready for the successful employee to sign.

On the other side of the table sits the hopeful employee. He looks over the agreement and thinks about what he wants from the relationship. He also considers his needs to be simple. He wants to know exactly what’s expected of him and that he’ll be paid on time and in accordance with the agreed rates. And…if and when…he goes above and beyond the employer’s expectations he expects to be rewarded with acknowledgment, raises, and other perks.

Everything looks in order to both parties…so they sign the paper, shake hands, and the relationship begins.

But what happens if somewhere along the line the relationship breaks down? Say the employee fails to follow through on certain aspects of the agreement?

When the relationship breaks down the employer may need to take corrective actions. And in the process of deciding how to respond many possible questions and scenarios run through the employers head. He begins to ask himself if the lack of follow-through is something that can be lived with? And other questions like: “Is the employee’s failure in this one area acceptable considering everything else he does?”…“Will correcting the employee bring about the desired result?”… “Do I have the manpower necessary to continue providing seamless service should a separation occur?” And then the dread of starting the hiring process over, once more, enters into the mix.

When the employer begins to question whether or not this bad behavior is something that can be lived…given his rationalized answers to the above questions…this then lowers the bar for the accepted norms. And before you know it the integrity of the entire business heads south.

Rather than accepting some bad behavior and using excuses like: “I’m keeping him on to keep the peace…so that things will run smoothly.” Instead try using defensive pessimism.

4 Steps to Using Defensive Pessimism To Maintain the Integrity of Your Business

1. Know what you want and Take care of your business first.

Your business must come first, everything else is ancillary. Without your business the conversation is over. And when a situation occurs where an employee correction is needed you must be able to walk away from the negotiating table and start over. Knowing what you want means understanding that everyone involved in the business is either a part of the solution or a part of the problem.

2. You must keep a clear picture in your mind of your ideal employee.

Although good employees are sometimes transitory and perfection my seem illusory, your ideal employee is out there. Your job is to find them, or create them…and fill your business with these high quality people. When correcting an employee who’s gone astray create a beautiful picture in your mind of your perfect employee…whatever that may be for you and hold it there throughout the conversation. And if you feel like you’re not getting your point across, try picturing yourself going back to the negotiation table with someone new.

3. Don’t trash the existing relationship…If it’s good.

The point of the story of Al and the Buick was that he was able to get what he wanted, the car, at his price. Unless the relationship is beyond repair, your goal is to use defensive pessimism to help get the employee back on track by keeping your bargaining power. If you go too far and relay the message that it will be easy for you to start over with someone new you may push away an existing employee who’s willing to learn and change.

4. Do it early

This is vitally important. The longer an employee is allowed to continue doing unacceptable behavior, the more he’ll believe that the behavior is acceptable. And left unchecked it will snow ball, making correction much more difficult.

To many…defensive pessimism may seem like the “my way or the highway” approach. But I believe that, rather than causing you to concentrate on what you fear you’ll never get from employees, it forces you to look at what’s really great about the alternatives and keeps you focused on the bigger picture.