Best of Negotiations: Chris Voss

0:06I'm Ted Seides and this is Capital Allocators. For the second year, our summer series will share some of the best episodes of the past, curated from our favorites and yours. You can pull down many of the great ones on our Spotify playlists. This series pushes them to your regular listening feed. Our 2026 Summer Series focuses on improving the investment process. Over the next six weeks, we'll share 10 gems from interdisciplinary skill sets that will help you level up your investing across decision-making, interviewing, storytelling, negotiations, and habit formation. This week's Summer Series is another twofer, this time on negotiations.

0:52The first is with legendary former FBI hostage negotiator Chris Voss, the author of Never Split the Difference and founder of The Black Swan Group, where he teaches tactical empathy in negotiations. The second is with Yale professor Dalian Kane, who opened my eyes to the importance of walking away. Before we get to the interview, we're excited to introduce the next chapter of Capital Allocators University, an online on-demand curriculum with an annual in-person gathering for investment professionals committed to continuous learning. One of the great ironies of investing is that the skills that matter most over a long career are often the ones least formally taught.

1:33Things like decision-making, communication, leadership, time management, interviewing, and building relationships. That's why we've evolved Capital Allocators University into an online on-demand experience, making those lessons accessible to investment professionals everywhere. The best careers don't compound through knowledge alone. They compound through knowledge and relationships. If you'd like to explore the curriculum or someone on your team comes to mind, visit the link in our show notes or the university page on our website. Thanks so much for spreading the word about the next chapter of Capital Allocators University.

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5:22We use Alex and our team at Capital Allocators swears by it. Try Alex for yourself at the link in our show notes, tryalex.admiredleadership.com. Please enjoy my conversations with Chris Voss from 2022 and Dalian Cain from 2020. Chris, it's great to see you. Ted, great seeing you, man. And thank you for having me on. I thought it would be really fun to start with just a question of, hey, we're doing this podcast. If you wanted to catch someone's attention in a really short period of time, I know you've certainly had that situation come up in negotiations. How would you go about doing that? I'd make an observation.

6:05I'd do what we call a cold read. Take a look at their face, do a read, say, you look preoccupied. You look troubled. You look happy. You look like your thoughts are someplace else, just kind of whatever my gut instinct, intuition tells me is going on based on a look on their face, and that'll catch their attention. It's a little bit of a dance. You got to be Ginger Rogers, but as long as you're willing to be Ginger Rogers, it works out really well. Why don't we dive a little bit into your background without going through it? I read Never Split the Difference a couple of years ago and loved it.

6:37I know you've had this background in hostage negotiation, but how did you get from wherever you started through that to Black Swan Group today? Just sort of one thing out of left field after another. SWAT guy, switched to negotiations due to injury, working terrorism and hostage negotiations in New York, and it worked out great. I ended up being at several places at really zenith times. And when I was at the crisis negotiation unit run by Gary Nessner, from us all the way up to the director of the FBI, Louis Free, we couldn't have had more support. And no matter how good you are, you need the organization to be supportive of you.

7:17And that was really huge. The stars really lined up at the time. So I would love to spend as much time as we can trying to understand human nature. And maybe the way to start, I remember hearing you tell this story of being brought into a hostage negotiation and immediately having to figure out how are you going to engage someone because someone's life is on the line. What's the fastest hack in? You know, we used to still laughingly, but it's true, you know, a hostage negotiator is the ultimate cold caller and we're selling jail time and we got buyers. First of all, you can't start with predictable dialogue.

7:54Hostage negotiation, I got to get my name out there, just my first name, and then I want to trigger a response and catch them off guard. Like a hostage negotiator, a bad guy is going to assume that I want hostages out. A great way for me to catch that guy off guard is say, I'm Chris. Are you okay? And say in a way that I'm really interested. And we didn't even coach people to say, I am Chris, Voss, FBI, hostage negotiator, here to talk to you. That's too much. Like in every social interaction, you really just need to get your first name across to the other side, let them know you're genuinely interested in them.

8:32And that's exactly what a hostage negotiator needs to do. How do you think about setting the stage? So you're engaging with someone, whether it's a hostage negotiation, a business negotiation, just a conversation with someone that you want to engage with. What are the things you think about setting the stage so you can have that good conversation? The first thing really is everybody's got something to say. Now, the people that are most closed mouth and tight lipped are the guys and gals fed up with not being listened to. You set the stage, you create an environment right away that lets them know you're actually going to listen.

9:10You're not going to pretend to listen. You're not going to wait for your turn to talk. You're going to take an educated guess on state of affairs, their mental state, their business state, what they're up against. And then you're going to throw an educated guess out. The real critical thing that a lot of people are really scared of is being corrected. Being corrected is a superpower. And most people are horrified at being corrected when, in fact, when somebody corrects you, they're stepping to your side. I have been perusing your book, Capital Allocators. I like the quotes. I'm finding it really interesting.

9:43At the beginning of, I think, the interviewing chapter, you got a quote from Maya Angelou about the real impact on somebody is how you made them feel. Well, it feels so good to correct that a lot of people don't realize what an advantage it is to get corrected. They're horrified that the person doing the correcting is going to think that they're an idiot. In fact, correcting is such a satisfying thing to do that people that we train the black swan method, we get them used to being corrected periodically because it breaks down barriers faster. What's an example of something that you would tease out so that you get corrected?

10:18One of the students in Georgetown is in the middle of a commercial real estate transaction. The building that they're looking to buy, commercial mixed use in a historic area, commercial and residential, growing city, historical district as well. They ain't building any more of them. They can't knock this baby down. And it is a cash machine. It's got near 100 % occupancy. They got everything going for it possible. So this looks too good to be true. So he takes a shot. And he says this to the agent. Sounds like the seller's looking to sell a cash cow because they don't believe in the market fundamentals.

10:55Now, he was just articulating a read, which happened to be wrong. The agent immediately shoots back. They got problems in other buildings. They got to sell this one. Now, that's proprietary information. You should not be giving that stuff up. But not only is it a correction, people feel safe when they're correcting. It just feels so good to correct. Not only does it feel good in the moment, but the other thing about an intentional correction is they never regret it. Because again, like your Maya Angelou quote, what they remember is the feeling of the moment. It's one of the best ways to tease out, maybe not proprietary, but closely held because they don't trust you yet.

11:32Because not only do you need to get the information, but you also need them to not regret giving it to you, which is one of the problems of questions. I can question stuff out of you, but the chances of me getting closely held information diminish because nobody likes to be questioned. Even good open-ended questions can, in many cases, be hard to answer. But then the chances that if I get it out of you that I've backed you into a corner, pried you out of it, triggered it out of you by a question, chances that you're going to regret having told me that are very high. And the hostage negotiator realizes that I got to get the information and I've got to diminish, if not entirely, eliminate their regret because the execution of the deal for a hostage negotiation is completely voluntary, which in point of fact, all deals are.

12:16The threat to sue somebody is just not a great way to do business. Penalty clause is not a great way to do business. If you're putting penalty clauses in your contracts, that means you're not a good negotiator. So you want to get information, you want to get people to feel good about the process. So when it comes time to execute, they're happy to execute. What are some of those other triggers that in the context of listening to someone, you can gather more information? One of the things, again, you talk about mirroring in your book. Mirroring is a great trigger. We believe that a mirror is one to three words.

12:50Once you get north of five, that's too many words. Typically, you parrot it back to them word for word. You learn the skill based on the last one to three words I've just said. when you're really good at it, you can really guide a negotiation depending upon what you mirror. It's one of the really stealth, powerful methods to get people to talk. It's a great way to get people talking. The other thing that's nice about it, the reason why it's superior to a question, if I say, what did you mean by that? You'll probably repeat what you just said with the exact words, possibly even louder, sort of like an American overseas.

13:26If you repeat the exact words, latter, it automatically becomes more apparent. But a mirror, you'll never repeat the same words. You'll reword it. There's something about the mirror, the message comes across for me and it impacts you is, I heard what you said. For whatever reason, the words you used weren't exactly right for me. And it would be really helpful for me if you reworded the meaning of what you just said. All that is packed into the act of mirroring and the other person expanding, elaborating. Again, in many cases, a great way to get closely held information without the other side regretting it.

14:03So mirror is one of the great skills, minimal effort, tremendously elegant, ridiculously effective. So that elegant, effective mirror is just a way to get you to continue talking. Right. My son Brandon, the president of the company, refers to it as a connector. It tends to connect thinking. For whatever reason, maybe you need just a slight break. The amount of time it takes to mirror and to respond to mirror is probably about three seconds. I remember a long time ago, I was at a conference sponsored by the Gallup Poll and they said, how long is a moment? A moment is three seconds. But effective pause is often three seconds.

14:42Your brain can cover a lot of ground in three seconds. A mirror really creates that much time, slows the game down for you. The listener, it doesn't slow things down for the talker. So once you're past a mirror, you've talked about labeling as another technique that just allows people to gather information. I would love to hear what that means and how you go about doing it. Yeah, the labeling is like the MacGyver tool, like the ridiculous superpower. our label is it seems like it sounds like it looks like. You seem, you sound, you look, it feels like. And hostage negotiation was called an emotion label specifically designed to just label emotions.

15:24And when we're adapting the Black Swan method out of hostage negotiation in the earlier days, number one, I didn't think labels had really any use at all. And they turn out to be like our most effective skill. Our top tier people will only label. And we've gone from just labeling emotions and dynamics to types of labels. An asking label, it seems like you're uncertain versus what are you uncertain about? Now, the label is much more likely to get a solid stream of consciousness response. It's so much better than asking questions. Once you learn how to convert over, we've got clients that say labels unlock the floodgates of truth talk.

16:08They're vastly superior to questions of any type. Closed-in questions where you're fishing for a yes tend to be really bad. Intentionally fishing for a no. Are you against this? Is this a bad idea? Is this ridiculous? Have you given up on? Those are great ways to kick conversations into gear. There's also an issue of decision fatigue or maybe your ability to respond to questions. Like if I ask you a great what question or a how question anytime after three o 'clock in the afternoon, chances are your decision fatigue has gotten you to the point where you're just like, I don't know. Because the what and how questions trigger what Danny Kahneman would call slow thinking or in-depth thinking.

16:53You have to have enough gas in a tank to do that. Every human being alive has a limited number of decisions that they can make in a given day, whether you're Warren Buffett or whether you're Joe Biden or whether or not you're the guy in the corner that's selling newspapers. Limited decisions. So if I ask a great opening of question, it requires an in-depth, thoughtful answer for you. Anytime after 11 o 'clock in the morning, there are a whole bunch of biological things getting away. Circadian rhythm, diet, how much stress you had that day, what you had to eat, whether or not you've eaten at all.

17:28after 11 a.m. Labels, on the other hand, that's just not there. Let me give you an example. I'm coming back from overseas a couple of weeks ago. I shoot out a question via text to one of my colleagues. Now, getting the background behind the question is always much more important. So he could have responded to me with, what makes you ask, which is a great response when I have enough gas in a tank to answer. And I was tired. Instead, he shot back a label, seems like he got a reason for asking. And I was like, wow. And I just bang, bang, bang, bang, bang, knocked out and concise text messages, all my reasons for asking.

18:09And I know that if he had said, what makes you ask? I'd have been like, I don't know, answer the question. Don't ask me what makes me ask because I didn't have enough gas in a tank. So the labels end up being like this ridiculously versatile tool that's great at getting information out of people without making them feel cornered or interrogated, no matter how tired they are. We hear a lot about open-ended questions as a good thing compared to closed-end questions. So now you have the open-ended questions at certain times a day, and then you have labels maybe all day, but in particular other times a day.

18:43What are some of those other questioning tools that are effective in eliciting information? Well, really getting a no-oriented question. What I've also found is no matter how tired I am, I can answer. I can say no, and I can probably, having said no, throw in some more information. Guidance. I had an intern that I told, never ask me a question after two o 'clock in the afternoon, I can't answer with no. Do you want me to do this is much better than what do you want me to do? Because if I don't want them to do it, I go, no, don't do that, do this. Bang, bang, bang. And I'll give them immediate guidance right away.

19:18I think it's one of the reasons why it's very difficult for executives and companies. A friend of mine, Tom McCabe, is head of the DBS for the Americas. He was talking to me about how to thrive as an executive, is going to the boss, be willing to get shot down, take his feedback, and come back with a smarter idea. So boss got limited time. Walk in, make a proposal. If it isn't dead on, boss going to say no. Now you're going to be crushed. But instead of being crushed, the boss is probably going to give you some great guidance in a really short period of time, show them that you've learned and come back again, having gotten wiser as a result of the guidance who gave you after he said no.

19:56And we're seeing very consistently across the board that if you get somebody to say, no, are you against this? They'll say, no, I'm not against this, but here are the following problems. When you might ask a yes-oriented question, which would be a mistake, you might say, are you in favor of this? The problem with that is you'd love for them to say, well, I'm in favor of it, but the following problems are here. No one is comfortable referring to the following problems because they feel like everything they throw out is a commitment, is a trap, is a tie down, and nobody likes to get tied down. Having said no, you feel no obligation to continue you, even if you laid a whole bunch of stuff out.

20:39Because I never said I was going to agree, but here are the problems. Solve them and maybe we'll talk about it. There's just so much more freedom after having said no that you want the other person to feel safe in proceeding. You don't want her to feel trapped. And getting out of the yes business entirely is a really smart move. What are some of those cues for the no type questions that lead into that opening? Typically, if you feel like you want to close or you want to offer ideas, you want to proceed in some way. I may hear you out and then I may say, are you against me sharing some thoughts with you?

21:15It's a bit of a temperature check. You may say, no, I'm not against you sharing thoughts, but I got seven minutes. Can you do it in seven minutes? I may suddenly know there may be a time deadline I didn't know about. No, I'm not against you sharing some thoughts, but I got a few more things to say. Nobody can listen to you until they feel heard. Basically, debris they have in their brain. So an oriental question is typically what we use as a close or a test to see if it's okay for us to throw some ideas out. So you said no one can listen to you until they feel heard. Now, we've talked about some of those techniques.

21:52Are all of those techniques ways of allowing someone to feel heard? Definitely part of it. Paraphrasing. Typically, you really want to make sure you got it right. You're going to throw the labeling and the paraphrasing together and bundle it all up and summarize. If you're going to summarize the other person's perspective, it's a combination of what happened and how they feel about it, which is actually how we structure teaching people to summarize. So far, you've told me X. As a result, you feel Y. If you've done a really good job. What you're driving for is a that's right. That's right is what people say when they feel heard, when they feel that what's been repeated back to them is true.

22:33If you got a full-on summary and you get like a that's right out of the other side, and possibly even add some insights based on what they've said, what you trigger in them is an epiphany. You're trying to trigger an epiphany in the other side or bonding moment of some sort. Bonding moments come from oxytocin. Oxytocin is a bonding drug. Interestingly enough, well, we've always talked about oxytocin as a bonding neurochemical. Listening to Andrew Huberman, my favorite podcaster, a couple of podcasts back, he talks about oxytocin also increases the chances you'll tell the truth. So when people feel heard, they bond to you and the likelihood that they will be honest with you increases dramatically, which is what you want from the negotiation.

23:20You want to feel attached, so you want to tell you the truth. How else when you're approaching someone, whether it's a negotiation or day-to-day interaction, do you engage with people so that they feel safe? It's an effort which becomes smoother with practice, but frequently it's just something as simple as practice and throwing out a cold read label on somebody just because it's a perishable skill. There's no way around the fact that negotiations is a perishable skill. There just isn't. And anybody, if you're not working at your communication skills, you're keeping your emotional intelligence up, it goes dormant.

23:56It doesn't go away, but it does go dormant. I get a charge out of people that say, yeah, I'm a great negotiator. And I tell you about a deal that they're really proud of, which was years ago. I can always tell right away. They're not keeping up on their skills and they're picking up bad habits. And every now and then a bad habit, we'll hit a home run. You can stand improperly and swing the bat improperly enough times you're bound to hit one out of the park, but that's the one you're going to remember. So the selection bias, people remember their victories and they forget how few and far between they are.

24:29So you got to work at it on a daily basis just to keep your instinct up. So let's dive into the negotiation side. When you're approaching a negotiation, How do you think about preparing? I'm going to want to summarize what they've got against the deal. The issue of preparation versus over-preparation. If you're interviewing, you're in a negotiation. The most dangerous negotiation is one you don't know you're right. You're starting to interview somebody, you are negotiating. And while you're interviewing, you're gathering information. Ideally, you're not diminishing the relationship simultaneously.

25:03People are going to tell you stuff faster the sooner you engage. the information that you're trying to gather on somebody is pretty much like looking at their dating profile. It's not a bad starting point, but if you have looked at somebody's dating profile and assume you got a good bead on that person, you're in for a surprise. Several years ago, a millennial was talking to me about using a black swan method to great success. And by the way, my comment on generations, millennials versus Gen X, Gen Z, baby boomers, whatever. Top performers are all alike across the generations. It doesn't matter what generation they're a part of.

25:46The top one to 5%, they're all curious, they're all ambitious, they're all learners. When you start talking about difference in generations, you're talking about the middle of the bell curve, the C students, the C to the B minus students. You're in business, you're interested in the top performers. It doesn't matter how old they are. They want to learn, they want to get better. So this millennial is talking to me about using a black swan method and his job at his company was to get a second meeting. He's the cold caller. It's his job to set up the second meeting. So I said, I love what you're doing here.