This Technique Can Reveal Someone's True Colours

Written by Dave Bailey

Gun in hand against colourful background

Imagine you’re CEO of a small company. Your sales director has a variable bonus linked to new sales. During the year, the business strategy changes to deal with unforeseen circumstances. The sales director will now have to refocus on retaining existing customers, rather than acquiring new ones.

At year end, it’s time for their annual review. Under the original agreement, their bonus should be zero. You want to keep them motivated, but you also need to look after your business. It’s your call — so what should you do?

Putting the gun in your opponent’s hands

You might take inspiration from Bruce Dunlevie, GP of Benchmark Capital. As legend has it, when he’s negotiating equity valuation with the founders of potential investments, he throws this line at them:

'You tell me what’s fair, and I’ll do it.’

Because he’s holding the money, Bruce has significant power in this negotiation — but with that one line he hands over power to the entrepreneur. He gives them the gun.

It turns out that when you ask this question from a well-respected and powerful position, the other party will often go out of their way to offer something fair. Some may go so far as to offer something slightly unfair to themselves. And if they ask for a little more than market, Bruce goes along with it — after all, he only works with the best. It’s a real demonstration of trust.

However, if the entrepreneur asks for something outrageous and ‘fires that gun’ at Bruce, he won’t work with them at all. That’s Bruce’s price for trusting them with the gun in the first place.

As CEO, you have positional power over your team. In other words, you have the final say. But if you want to create leaders in your team, you sometimes have to share your power with them.

If you give your leaders ownership, they’ll usually behave like owners. And if they don’t — well, it’s better you know sooner rather than later.


Originally published Feb 24, 2021, last updated Jun 1, 2021

psychology sales

About Dave Bailey

Hi, I’m Dave Bailey and I coach tech CEOs from Series A to pre-IPO. Join 20,000 entrepreneurs who receive my new essay every week. 

I will never sell your information, for any reason.

Trending essays

How to Use Nonviolent Communication at Work

All my biggest regrets as a founder are around not having difficult conversations sooner...

How to Coach Your Team and Get The Result You Want

If you’ve found it difficult to get the results you want from other people, try this simple technique...

How to Drive a Culture of Ownership

Do you wish your team took more ownership? Here’s how to trust them to get the job done without you...

10 Communication Techniques Used by Great Leaders

Whether you’re leading a meeting, a team, or a company, your ability to communicate can set you apart...

How to Ask Your Team The Right Questions

To improve your ability to ask great questions, it helps to understand the types of questions you can ask...

A Guide to Running Exceptional One-on-Ones

How effective are your one-on-ones? Here's a practical guide for managers and their direct reports...

Serious about levelling up as a CEO?

The Clarity Program is an accelerated coaching program that helps startup and scale-up CEOs communicate their customer need, strategy, and vision.

Learn about Clarity

Previously, Dave co-founded Delivery Hero and other scale-ups, and he's coached hundreds of scale-up CEOs across the US, Europe, Asia and Latin America.

Dave studied at Stanford Graduate School of Business and Oxford University. His writing has been featured in many of the world's top business publications. He has a passion for communication and strategy.

Learn more about Dave

©2023 Founder Coaching Limited. All Rights Reserved.
FOUNDER COACH® is a registered trademark of Founder Coaching Limited.