Last Year We Lost $3.77 Billion. But…

Imagine having to stand in front of your shareholders and say: “Last year we lost $3.77 billion.” That was the situation Warren Buffett faced after Berkshire Hathaway’s difficult 2001.

I first heard this story from Robert Cialdini in 2004, when he spoke at several State Auto agency partner meetings. He used Buffett’s situation to illustrate something most of us overlook: The order in which we present information can dramatically change how people receive it.

Buffett had some very bad news to deliver. Berkshire Hathaway’s value had declined by billions. But there was also important context. From 1965 through 2001, the S&P 500 had produced an overall gain of 4,742%. Not bad but during that same period, Berkshire Hathaway’s gain in per-share book value was an astounding 194,938%!

Think about that for a moment. If you had invested $1 in the S&P 500 in 1965, it would have grown to roughly $48 by the end of 2001. A dollar invested in Berkshire Hathaway would have grown to about $1,950.

So, how should Buffett frame the bad news? Consider these two approaches:

“I’d like to remind you that the management team at Berkshire Hathaway has dramatically outperformed the S&P 500 over the past 36 years. However, last year the value of your company went down by $3.77 billion.”

Now reverse it:

“Last year the value of your company went down by $3.77 billion. However, I’d like to remind you that the management team at Berkshire Hathaway has dramatically outperformed the S&P 500 over the past 36 years.”

Same facts. Same words. Different order. Very different feeling.

In the first version, you’re left thinking, They lost $3.77 billion! In the second, your attention ends up on decades of incredible performance. Small change, big difference. That’s the power of a small word like “but” or “however.” What follows those words often receives greater attention, while what came before can feel discounted.

You’ve probably experienced this yourself:

• “You did a great job on the presentation, but…”
• “I really like your proposal, however…”
• “Honey, I love you, but…”

Once we hear that transition, we brace ourselves. Whatever came first suddenly feels less important. That makes this more than an interesting communication trick. It’s something to think about whenever you’re delivering feedback, presenting an idea, selling, negotiating, leading a team, or having a difficult conversation.

Before you speak, ask yourself: What do I want this person focused on when I’m finished?

Sometimes you want the negative information to stand out because change is needed. Other times, you want people to keep a setback in perspective by focusing on the larger positive picture.

Neither approach requires hiding facts or manipulating people. Ethical influence isn’t about changing the truth. It’s about communicating the truth in a way that helps people understand what matters most.

So, the next time you find yourself about to say “but” or “however,” pay attention to what comes next because everything you say may be true, but what you say last might change how everything else is heard. And yes, I chose that order on purpose.

Edited by ChatGPT

Brian Ahearn

Brian Ahearn is the Chief Influence Officer at Influence PEOPLE and a faculty member at the Cialdini Institute. An author, TEDx presenter, international speaker, coach, and consultant, Brian helps clients apply influence in everyday situations to boost results.

As one of only a dozen Cialdini Method Certified Trainers in the world, Brian was personally trained and endorsed by Robert Cialdini, Ph.D., the most cited living social psychologist on the science of ethical influence.

Brian’s first book, Influence PEOPLE, was named one of the 100 Best Influence Books of All Time by Book Authority. Persuasive Selling and Influenced from Above were Amazon new release bestsellers. His LinkedIn courses on persuasive selling and coaching have been viewed by over 850,000 people around the world and his TEDx Talk on pre-suasion has more than a million views!