Making your counterpart trust you is key to successful negotiation. The more confidence your counterpart has in your honesty, integrity, and reliability, the easier you will find it to negotiate a win-win outcome. If, for whatever reason, your counterpart considers you untrustworthy, you will find it difficult to obtain even minor concessions. Think about it. If you were interacting with someone you didn’t trust, wouldn’t you proceed very cautiously, and compromise very reluctantly, for fear of being victimized?

In this issue, we'll pick up where we left off last month and share the final ten building blocks of trust.  Then, you'll read some real life examples showing the importance of trust in any negotiation.

Remember, almost everything in life is negotiable.

Peter B. Stark

1. Go beyond the conventional relationship. Recently we were involved in a contract negotiation. Because we were unfamiliar with the type of contract we were negotiating, we asked our counterpart if we could have more time to study the contract. His response was, “Of course.” He then went on to ask us whether we would like samples of some of his competitors’ contracts so we could compare them with what he was offering. By providing these contracts to help educate us, he went well beyond the conventional relationship. Our trust in this counterpart went up quickly.

2. Listen. Listening openly to your counterpart’s ideas, regardless of whether you agree with his position, will provide you with a greater opportunity to build trust. Encourage your counterpart to exchange ideas. Get complete information before expressing your opinion. Also, recognize that your counterpart’s opinions and positions might change as the negotiation progresses.

3. Overcommunicate. When negotiations get tough, the natural tendency is to communicate less. Resist that tendency! Open, honest communication breeds trust.

4. Discuss the undiscussables. Many negotiations or conflicts have issues that are difficult to address. Salary is one example. When people discuss their performance with their boss, they often find it difficult to bring up the subject of salary. But discussing these types of issues helps build trust and eliminate future problems.

5. Provide accurate information, without any hidden agenda. Many negotiators think it is wise to provide their counterparts with as little information as possible. We disagree. To build a win-win relationship, each counterpart has to have enough information to make good decisions that meet both negotiators’ goals. We also think it is a good idea to give your counterpart information on both sides of an issue, not just the side you prefer. (Note how the negotiator who supplied us with his competitors’ contracts inspired our trust.) Finally, when you do not have all the answers, admit it. To build a lifelong relationship based on trust, you need to communicate accurately and openly.

6. Be honest—even when it costs you something. If your counterpart has made a mistake in adding his figures, tell him. A client recently called and told us we had billed him less than we had quoted. This was true, because the client had switched the program we were doing from two half days to one full day, for which we charge less. When we explained this to the client, he replied, “You didn’t have to do that. It wasn’t that much difference.” Our response was, “You didn’t have to call us. Maybe that’s why we work well together.” On the other hand, if you make a mistake in your calculations or decision making, admit it. Doing so goes a long way toward building your credibility.

7. Be patient. No one likes to negotiate with the fast-talking salesperson who insists an immediate decision is necessary. Patience breeds trust—and better decisions.

8. Safeguard for fairness. It is your responsibility to ensure that your counterpart gets a fair outcome. If the outcome is unfair, will your counterpart be open to negotiating with you again? If you make sure everyone goes away happy, your reputation as a negotiator will take care of itself.

9. Negotiate for abundance, not scarcity. When negotiating, most people concentrate on cutting the existing pie into sections and then dividing up those sections. To build trust, focus on creating a bigger pie. As someone once said, “Why waste time fighting over one loaf of bread if you can bake two or three?” If your counterpart in a negotiation wants you to lower the price of your product or service, for example, rather than simply refusing, consider agreeing to lower the price if she will buy more products or extend the length of the service contract. (See below)

10. Take calculated risks. One of the fastest ways to build trust in a relationship is to be willing to take calculated risks. (See below)
 

Negotiation in Action

Negotiate for abundance, not scarcity

The philosophy of abundance was successfully employed in 1996 by the executives at Boeing Aircraft in a negotiation with the company’s suppliers. In an effort to make the production of the 717 a profitable endeavor, Boeing asked its suppliers to cut their prices 20 to 30 percent. This was a bold move, since the suppliers’ prices were already competitive. Although not all the suppliers were enthusiastic about the proposition, almost everyone agreed that if the plane could not be produced profitably, everyone, including the suppliers, would lose. In return for lower prices, Boeing promised to outsource as much work as possible to the suppliers and do more business with each of them in the future. In effect, Boeing enlarged the pie, allowing everyone involved to get a bigger piece.

Take calculated risks

A great example is the union-management agreement reached between Southwest Airlines and its pilots in January 1995, which resulted in a ten-year contract for the pilots. This was unprecedented in the airline industry, where the typical contract lasted only three or four years. In exchange for the long-term contract, the pilots agreed to freeze their wages for the first five years in return for stock options. This negotiation, which involved a calculated risk for both parties, built trust between them. It resulted in a successful outcome for everyone, especially the pilots, many of whom became millionaires when the stock increased in value.
 

 Ask the Negotiator

Dear Peter,

An employee recently walked into my office and said, "I have some problems and I need your help.  I have recently gone through a divorce, my rent has just increased, and my oldest child is now going to college.  I really like working for you and this company.  Is there anything you can do to help me earn a higher income here so I don't need to go looking for a higher-paying job?"

I really value this employee and would like to keep her but don't want to set a dangerous precedent.  What should I do?

Sincerely,

Gary

Dear Gary,

You have just seen the tactic of "Appealing to Mother Teresa" at work.  And, it is very difficult to resist, without feeling like a rat.  You have several options:

1) You could simply say "no"

2) You could issue a Conditional No by stating, "I cannot give you a raise today, but I will consider it in three months when we start the next fiscal year."

3) Utilizing There is More Than One Way to Skin a Cat, you could suggest, "Although I cannot give you a raise in your current position, we could talk about other positions in the company that pay more money."

Whichever tactic you choose, you should empathize with the employee, and show your concern for the difficult situation they are facing.
 

Sincerely,

Peter
 

Are you involved in a negotiation and not sure what strategies or tactics to use?  Send in your toughest negotiation challenge and our team of expert negotiators will outline a specific plan to ensure your success.  Please send your negotiation challenge to info@negotiatingguide.com.  If your challenge gets published, we'll send you an autographed copy of The Only Negotiating Guide You'll Ever Need, by Peter Stark and Jane Flaherty ($14.95 retail) WOW!!        

To view last month's issue of The Master Negotiator, the premiere on-line newsletter for negotiators, follow this link:

The Master Negotiator, Volume 2, Number 9 Dealing with the Untrustworthy Counterpart

To view previous Negotiating Tactics of the Week, follow this link:

Negotiating Tactics of the Week

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