The_Essential_Manager_s_Handbook

DEVELOPING MUTUAL TRUST / 395

Building your reputation

One of the most important currencies

negotiators have is their reputation. It

may sometimes be tempting to maximize

short-term gains by overlooking the

long-term consequences, but

experienced negotiators know that

people prefer to do business with

those that they trust, and guard their

reputations fiercely.

Developing trust
Reciprocation is important for
building trust. When negotiators offer
information or concessions, they expect
the other party to reciprocate. Without
reciprocation, no further gestures
of goodwill will be offered. With
reciprocation, the negotiating parties
will be able to find ways to collaborate
and create value for both.
It is also important to be seen to be
fair. As fairness is a subjective matter,
however, make sure that you understand
the standard of fairness that your
counterpart adheres to. Past behavior
is often used as a predictor for future
behavior, so try to behave consistently.

In 1873, US financial

markets were in poor

shape and “king of steel”

Andrew Carnegie needed

to cash in a $50,000

investment with J.P.

Morgan. Expecting a

$10,000 profit, he asked

Morgan to send him

$60,000. Morgan sent

$70,000—the investment

had made a $20,000 profit.

When Henry Hollis sold the

Palmer House in Chicago to

Conrad Hilton, he shook

hands on Hilton’s first offer

of $19,385,000. Within a week

Hollis received several offers

more than a million dollars

higher. However, he never

wavered on his first

commitment to Hilton.

Examples of actions used by negotiators to build trust

US_394-395_Developing_mutual_trust.indd 395 30/05/16 3:06 pm