Kelly: A thank-you note and a share of Berkshire Hathaway stock

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Posted: Monday, April 7, 2014 12:00 am

Imagine opening your mail and finding a share of Class A Berkshire Hathaway stock.

“I was momentarily slack-jawed,” said Robert Cialdini, author, psychology professor and “influence guru.”

Opening that envelope certainly influenced Cialdini, who said, “I really hadn't been an aficionado of the Berkshire Hathaway experience.”

The share of stock a decade or so ago, worth about $75,000, was a gift from Berkshire's vice chairman, Charles Munger. In his book, “Poor Charlie's Almanac,” he wrote that the gift to Cialdini was in thanks “for what he had done for me and the public.”

So what moved poor Charlie, worth a mere billions, to push the envelope of gratitude and send a share of Berkshire to a guy he didn't know?

It was Cialdini's best-selling book, “Influence: The Psychology of Persuasion,” copies of which Munger sent to his children.

It didn't take long for Cialdini to become a Berkshire Hathaway aficionado and to purchase shares on his own, now worth more than $185,000 each.

He has attended the past eight or nine shareholder meetings in Omaha, and this year will speak beforehand at a workshop sponsored by the Creighton University Business Institute.

Cialdini said Munger and his partner, Berkshire Chairman Warren Buffett, have succeeded at such a high level because they are “scrupulously honest” and understand the big picture.

“They read psychology books in their spare time,” he said. “They know that markets are not made up of econometric models. They're made up of people.”

To operate well in business, the author-professor said, you must understand basic human principles and what influences decisions and actions.

Behavioral science, he said, has shown that the most important factor in persuading others to buy your products or services, or to understand your point of view, is to be a “credible communicator.”

To gain credibility, he said, a person must display two main things — expertise and trustworthiness.

That may seem obvious, but people and businesses make simple mistakes in how they present themselves, Cialdini said.

An example is giving strong arguments first and then, for the laudable goal of transparency, stating weaknesses last — which emphasizes the negative.

Buffett disarms people in his widely read annual letter to shareholders, Cialdini said, by doing the reverse. Bad news first, then the good news. Buffett also gains trust, the author said, by not hiding or downplaying the negative. Some companies “bury the negative information in a footnote.”

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Columnists Michael Kelly, Erin Grace and Matthew Hansen write about people, places and events around Omaha. Read more of their work here.

The Berkshire annual meeting, attracting as many as 40,000 shareholders, will be May 3 at the CenturyLink Center.

Cialdini will give a keynote address May 2 on the Creighton campus at the Harper Center, home to the university's Heider College of Business. The workshop, which costs $195, is titled “Getting To We,” focusing on how to develop and engage in relationships for optimal working success.

According to Creighton University, the emphasis will be “on teams and innovation inspired by bringing ideas together from different spheres,” and on applying social psychology principles to “ethically persuade and gain agreement with others.”

On April 30 and May 1, Cialdini's colleague Gregory Neidert will teach “the science behind influence” in a workshop titled “Principles of Persuasion.” Those sessions will be based on Cialdini's book, which has sold more than 2 million copies.

The fee for that two-day workshop, aimed primarily at CEOs, business owners and other current or future leaders, is $1,650. (That also includes admission to the May 2 workshop.)

To register for the sessions, go to

Gisele Olney, director of the Creighton Business Institute, said this is the first time the institute has planned a workshop the week of the Berkshire shareholders meeting. The sessions, she said, aren't simply about how to close sales.

“They are about how to persuade folks to work together and communicate,” she said. “They can be a shortcut instead of just learning through the school of hard knocks.”

In the workshop, attendees will learn about Cialdini's six “weapons of persuasion,” such as being likable and consistent, and the importance of reciprocity and tiny favors.

Housekeepers and restaurant servers leave mints on pillows or tables because people appreciate the gesture, and studies have shown that the result is higher tips.

Cialdini said scientific studies show that people who meet for the first time and share personal information — hobbies or other interests, for example — become “more humanized” and find it easier to negotiate and reach agreement.

Another factor in persuasion might be called society's seal of approval. The British government got more delinquent taxpayers to pay up by using a different tactic. Rather than simply threatening people with fines, the government sent letters saying that most Brits pay their taxes on time. The peer pressure worked, and more people complied.

“I call it social proof,” Cialdini said. “You do what those around you are doing.”

A professor emeritus of psychology at Arizona State University and president of Influence at Work, his clients include such corporations and organizations as Google, Microsoft, Coca-Cola, IBM and NATO.

Understanding the principles of persuasion, he said, is important far beyond the world of business.

“That's why my phone rings so much. There isn't any arena of society in which persuasion can't be a key to success.”

The Omaha World-Herald is owned by Berkshire Hathaway Inc.

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