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173. Rene Rodriguez: Unleashing Voluntary Energy Via Influence

How do we change others’ behavior? In business, it’s a challenge we face every moment. Can we persuade a customer to switch to our brand or service? Can we get the board or the C-Suite to approve our proposal? Can we convince a VC to fund our startup? The common denominator across all these tasks is influence. How do we make the case with sufficient influence? The solution lies in using tools informed by Neuroscience. Economics For Business talks with Rene Rodriguez about his book Amplify Your Influence (Mises.org/E4B_173_Book), and his research into the neuroscience behind influential interpersonal communication.

Key Takeaways and Actionable Insights.

Influence is a determinant of business success.

In the past, there was a classification distinction between “soft skills” in business management and the more highly respected quantitative capabilities of finance and strategic planning. Today, that is no longer the case. The ability to harness communication to change others’ behavior is fundamental to making progress in the business world, and an inability in this area means an executive or manager will be perceived as ineffective. Setting out a vision that no-one follows is fatal.

Influence is also the way to help people make better choices for themselves.

Influence can be considered by some to be manipulation, but there is absolutely no need for that perspective. Influence may be exerted to help people better evaluate the choices and options open to them. Influence is providing information that may not otherwise have been available to the audience, or that had not been considered in the most appropriate light. Influence unleashes what Rene Rodriguez terms “voluntary energy”; they are pleased and delighted to be offered a better decision-making path.

There is hard science behind the soft skills of influence.

Influence is applied neuroscience. Neuroscience explains how and why humans resist change. It’s a threat. The first reaction to any new information is often resistance. We don’t like to question what we believe we know, or abandon the guidelines on which we’ve been operating, or change the heuristics we use. It’s a common, shared trait.

That’s why influence is the “how” of leadership: influencing behavior change when the natural response is to resist it. It’s also the goal of marketing, teaching, managing, selling, and communicating.

It pays to learn a little bit about neuroscience for each of these actions.

The power to influence can be amplified by using three techniques.

As with any business tool, there are techniques that can be perfected to improve the performance in use. Rene highlighted three:

Sequencing: The brain processes information in certain sequences. First, it looks for threats (like “change” or “new ideas”) in order to sort between danger and safety. If it perceives a threat, it shuts down – no influential communication will get through, Next it seeks value – feelings of being valued, being engaged, being inspired. The right sequence of message delivery starts with a communication of positive value (so that the brain can believe it is in a safe place), followed by communication of caring, active engagement and inspiration.

Framing: people perceive their own reality through their own framing. If your frame of reference for pizza is high calories, excessive cheesy fat and too many carbohydrates, it doesn’t matter how delicious the pizza recipe Pizza Hut presents to you, you are going to be unreceptive. In the battle for attention and shared meaning, an influencer must set and claim the frame in advance of any message presentation. Communicators and innovators practice framing and reframing to improve their skills. For example, creative innovators always create the frame of solving a problem for others, requiring them to see the problem as others see it and experience it, and enabling the future communication of the solution as a relief of unease or removal of dissatisfaction or discomfort. Framing is based on empathy – seeing from others’ perspectives and aligning with their values. That’s why the Economics For Business value proposition design tool starts from “Who is the customer?” and “What is their need?”.

The tie-down: There needs to be a close. Our target audience’s brains are flooded with information from all directions at all times. We need to make our message stick. The tie-down is a tool to make sure the audience has the chance to understand what our information will mean to them, what value it can add to their lives, and how it will help them achieve their goals.

To ensure execution of the tie-down, Rene recommends that we all have an Influence Objective in mind: the specific action, thought or behavior we are aiming to influence. The tie-down is often a summary or emphasis of benefits, or a powerful takeaway or a “magic phrase”. It ties down our message in the audience’s brain.

The art of influence lies in storytelling.

Brain scans show that when we are caught up in a story told by a skilled storyteller, we stop daydreaming and become fully present. We become focused. We narrow our attention to what the storyteller is saying. There’s a response in positive brain chemistry, as well as empathy and trust — a neural coupling between the storyteller and the audience.

Stories help us organize data, discern value, and make better decisions. Influencers work hard at becoming good storytellers. Rene left us with a 10-step guide, which we provide as a free pdf.

Additional Resources

Amplify Your Influence: Transform How You Communicate and Lead by Rene Rodriguez: Mises.org/E4B_173_Book

“10 Steps to Amplify Your Influence” (PDF): Mises.org/E4B_173_PDF

86. Allan Branch: Entrepreneurs Are Authors Writing Their Own Story

Key Takeaways and Actionable Insights

Entrepreneurship is a way of life that can be learned around the dinner table.

Allan’s parents were entrepreneurs, although it would never have occurred to him to call them that. They were in the service business, including restaurants and car washes. As a kid, Allan would help around the car wash, everything from washing down cars to emptying the trash to accounting. He internalized the idea that entrepreneurship was always doing two jobs, such as running one car wash while getting another ready for opening. The “two jobs” metaphor stayed with him.

Around the dinner table, the family would talk about how the businesses were going. It wasn’t so much a lesson in entrepreneurship as immersion in a lifestyle.

Entrepreneurship can be the source of a sense of control over one’s destiny.

Following this childhood immersion, Allan quickly realized his felt need to control his own destiny. Being an employee would not achieve that goal. He did not want to await permission to try new pathways. He studied design in college and took on clients for design work, and quickly found out that he had a taste for business. He found out that print design work was not profitable and in declining demand as design shifted to the web. From web design, he migrated to internet software design and production. He calls this pathway “slowly adapting to what I find interesting”, which has been his story for 20 years.

Allan applied his “two jobs” mentality to launching a SaaS accounting software business.

Allan developed a software design and consulting firm, which generated cash flow. He and his business partner poured the cash into developing a superior SaaS accounting software. They worked on it on nights and weekends — doing two jobs. He describes juggling the clients and leads and sales and payroll of the consulting company with the development of a new business with different customers, leads, sales and payroll. The “two jobs” mindset is typical for entrepreneurs as they grow and ideate and innovate.

Agility is a more effective and productive pathway than planning.

Allan tells us that he never had an official roadmap or business plan for the SaaS software company, with known milestones a year or two years or more in the future. Entrepreneurial management lies more in knowing how to be nimble, how to move fast, how to make decisions quickly. The hardest part is knowing what features to work on, when to work on them and how long to work on them.

Orchestration is the entrepreneur’s organizational skill.

To be an entrepreneur, and to build a business around you, it is necessary to attract talent, motivate talent and keep talent. It’s like being a conductor in an orchestra. You may not be the best violin player, but you know what another great violin player sounds like. You know how to assemble a team of players and blend them in a harmonious way.

And the attitude of the employees is as important, if not more important than the talent. Churn in employees is typically a business killer. It’s important to be able to recognize both talent and the right attitude. Allan ascribes success to transparent and continuous communication about the company’s mission and values — these will attract the right talented people.

The journey is strewn with mistakes all the way to its successful conclusion.

Allan built and steadily grew his SaaS software company over a ten year period and then sold it. His analogy is that of the duck that looks like it is gliding smoothly over the water, while kicking like crazy underneath the surface. Self-doubt along the way is normal. Errors and mistakes that require correction are normal. For entrepreneurs, it’s important to become comfortable with being uncomfortable.

Entrepreneurs are in the human reaction business. The measurement of success is making people smile.

All businesses are human reaction businesses. The goal is to make an emotional bond with the customer: they enjoy the experience you make possible for them, whether it is managing their own accounting using your software over a long period of time, or whether it is finding out about one new feature that they discover and find works well for them. Entrepreneurs strive for those moments of understanding. Making people smile is the metaphor — but in software, it’s hard to see them smile, so it’s necessary to find the right KPI’s that will be a proxy for smiling. Empathy is the skill of being able to feel when invisible customers are smiling.

Allan advanced into real estate and other ventures — but sees it all as storytelling.

After selling his SaaS business, Allan continued in software design and consulting for clients. He also involved himself in real estate, including a brewery in his home town. The brewery is a platform for telling the stories that make up the history of the town. And it is storytelling that Allan makes the overall metaphor of the entrepreneurial life. You are writing the story that your grandkids will tell about you in the future. What is the story you want to write? What is the story you want to tell about your business to attract and engage customers? The great brands and great businesses tell great stories. Entrepreneurship is a story told about life.

Free Downloads & Extras From The Episode

Allan Branch’s Entrepreneurial Journey (PDF): Download PDF

Hunter Hastings mentioned effectuation theory in his prologue to the conversation with Allan Branch. For those interested to learn more, refer to the useful definitional academic paper by Saras D. Sarasvathy, “Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency” (PDF): Download PDF

“The Austrian Business Model” (video): https://e4epod.com/model

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