Tuesday, September 27, 2011

Transactional Trust

“Five, six, seven…” Verdi was counting as he looked over a list. Tyler Gitou stopped in the hall as he passed Verdi’s office.

“What are you doing, Verdi?” Tyler asked.

“I’m counting my concessions,” Verdi said. “I want to make sure I haven’t given the other party more than he has given me in this negotiation.”

Tyler laughed. “You’re kidding, right?”

Verdi appeared annoyed. “What else am I supposed to do? This guy is a classic positional negotiator. The only way I can get him to move is if I move. But I don’t want to move too much and find out in the end I lost by giving more than I got.”

“And how is your deal coming along? Are you happy with the outcomes from all these moves and concessions?” Tyler asked.

“Gosh, I have no idea. I’ve been so focused on making sure I don’t give too much that I don’t even know what we’re delivering anymore.”

“That’s what I was afraid of, Verdi. The problem with positional negotiators is they get so focused on tactics and ‘winning’ that they don’t realize until the contract is signed what a lousy deal they negotiated. Issues are handled in isolation rather than taking an integrated approach.”

“That’s what’s happened to us,” Verdi said. “He takes an extreme position, I take an extreme position and we focus on how we’re going to get to the middle.”

“Is the middle the answer?” Tyler asked.

“Not necessarily. But he’s a veteran negotiator and he keeps telling me we have to compromise and we’ll both walk away equally dissatisfied. That’s how deals get done.”

“Simply put, Verdi, he’s wrong. He may be a veteran negotiator, but that doesn’t mean he’s a good one. In fact, he sounds like he has no idea what he is doing.”

Verdi looked dejected. “Have you ever dealt with someone like this?”

“Yes,” Tyler said. “Hundreds of times. Dealing with positional negotiators and producing a mutually beneficial outcome is what being a Deal Whisperer is all about.”

Verdi crumpled up his list. “So how does the Deal Whisperer handle this?”

Tyler sat down. “Go back to the basics. What have I told you is the basis for every decision in a negotiation?”

“Trust,” Verdi said. “You told me that people make decisions when they trust they are making the right decision.”

Tyler waved his hand. “No no, I said they make decisions when they trust they are not making the wrong decision.”

“What’s the difference?” Verdi asked.

“All the difference in the world,” Tyler said. “Most business people fear criticism of their decisions more than anything else. Making the wrong decision can end a career. So the process most people follow when making a decision is to look for signs that it won’t be the wrong decision. Even a positional negotiator won’t make a decision until they trust it is not the wrong decision.”

“So how do I build a trusting relationship with a positional negotiator I just met to try and close a good deal.”

“You don’t need a trusting relationship,” Tyler said. “You need transactional trust.”

“Transactional trust? OK, you’re going to have to walk me through this one.”

“I’d be delighted,” Tyler said. “Give me that pad so I can draw you some pictures.”

SEE: "Transactional Trust Part 2."

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