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Trust in Negotiation

Bob asked:

Roger Fisher has written that the less an agreement depends on trust, the more likely it is to be implemented. Is this a part of his universal principles?

Our Answer:

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Nowadays it is difficult to make a deal if there is no trust between counterparts. Even if one manages to make such a deal it will be very challenging to implement it. Trust is absolutely essential in any meaningful long-term relationship, regardless of whether youre selling, buying, resolving conflict - etc. Every single deal, even one-time deals has consequences in the future.

What then makes trust a reality?

The most important element is the authority of your word and the credibility of your actions. Its better to say what you know than not know what youre saying. Agreements are difficult in the absence of mutual respect and reliability. Both private and business life is full of examples where the future depends on the quality of relationships. For instance, marriage is a relationship, which with no trust, respect and faith in our partner is nothing else but an empty agreement.

There are interesting situations like hostage negotiations, where the negotiator will use sincerity and reliability as the building blocks of trust. As a hostage negotiator, you can not let yourself play a dominant, aggressive guy, who controls the situation - rather you need to become an ally, who shares the situation with other side.

Many unexpected situations may arise and trust may be the only link to resolve the issue. Given the choice of negotiating with an untrustworthy party, people with other alternatives will exercise these alternatives. Building trust requires time and even some risk, especially when we start a new partnership, business or relationship. If you dont fully trust each other, find ways to minimize your vulnerability and thus avoid the defensiveness that constrains value creation. There are some ways to secure agreements in the absence of trust like setting up monitoring regimes, creating guarantees and proceeding incrementally. There is a need for trust to facilitate sharing information with the other side. The most value-creating agreements are those in which both sides openly share data. The result of recent studies by the consulting firm A.T Kearney showed that trust in high-level business alliances is of particular significance. A direct correlation exists between trust and profit. It means that if you consistently share data with customers, not only will trust go up, but so too will the quality of your agreements and your profits. It may take several negotiations to develop this trust, but it will definitely pay off. Developing trust has become a key source of sustainable competitive advantage. Once trust is built, keep in mind that it is much easier to spoil it than create it.

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