This report is taken from the August 31, 2017, column by expert negotiator and trainer, Marty Latz. I have taken two trainings from Marty, both Texas Bar sponsored CLE events. If possible, please treat yourself to one of his seminars.
Credibility and trust issues raise critical problems that infuse and affect many negotiations. Some people do lie and cannot be trusted. Other people do not lie and can be trusted.
Why should you care about these issues? Because your and your counterparts’ trust, credibility, honesty, and reputation directly impact your negotiation results. We have had experience with untrustworthy opposing attorneys, who cause the cost of litigation and negotiation to skyrocket.
Studies show the extent that parties mutually trust each other leads to maximum success in many negotiations. Studies also show the opposite is true. Parties’ distrust leads to lack of information sharing (a crucial element of negotiation effectiveness), inefficiencies, wasted time, higher transaction costs, implementation problems and lost deals.
Without trust, the parties will not learn about each other’s mutual and competing interests. You may know each other’s positions, what each party wants, but you will not know why they want what they want. Without trust and credibility, the parties will be less willing to work with each other to satisfy their mutual and sometimes competing interests. The parties may not even engage, leaving them with a suboptimal resolution or no resolution to the problem the parties face.
Assume you have a home project, negotiate with the contractors and obtain three bids. One bid is the lowest by $10,000. However, you learn that the lowest bidder has a poor reputation for honesty, credibility, is not timely or is known for poor quality work. You will not do business with that contractor and will look to the next lowest bidder, because the cost difference is not worth the risk.
The absence of trust and credibility also disproportionately and negatively impact negotiations involving the parties expecting future relationships. Additionally, reputation-risking strategies rarely work long-term. Eventually these tactics come to light. People talk and bad acts become known. Reputations suffer.
Trust and credibility are not only about getting the best deals, but also about behaving morally and ethically. You will never regret doing the right thing in a negotiation.
Quote: Credibility is a basic survival tool. Rebecca Soinit