The Importance of Being Honest
Negotiations concerning your business can be stressful and overwhelming. Many people are under the misconception that anything goes in negotiations, as long as it achieves the desired result. Bluffing, or bending the truth, has been a common tactic of many business owners and lawyers in these negotiations. For most people, fudging a few numbers is a necessary evil when conducting business because they feel it is effective. Turns out, that’s not the case. Research has shown that deception and a lack of ethics in negotiations are actually counterproductive.
Your reputation is just as valuable in your negotiations as your bargaining skills. According to Andrea Schneider in Shattering Negotiation Myths: Empirical Evidence of the Effectiveness of Negotiation Style, there are two types of effective negotiating styles: 1. problem solving and 2. adversarial. The study surveyed 2,500 lawyers to gain their perceptions of the most effective negotiating style.
The following attributes were associated with problem solving negotiators:
- Astute about the law, etc.
Adversarial negotiators were associated with these attributes:
- Bluffer, etc.
Essentially, lawyers associated with the problem solving attributes were considered to be more effective than lawyers with the adversarial attributes. Schneider also found that the problem solving negotiators focused on ethical conduct, maximizing the settlement, meeting the client’s needs, avoiding litigation, and a good use of legal skills. While the adversarial negotiators also wanted to maximize the settlement and meet their client’s needs, they also focused on outdoing the opposing counsel and obtaining a profitable fee.
The perception of the negotiator is important to the proceedings and effectiveness of that negotiator, so it’s important to care about the negotiating relationship as much as the outcome of the negotiation.
Therefore, if a group of lawyers can agree honesty and creating good negotiating relationships are more effective than bluffing and dishonesty, then perhaps that’s an approach that can benefit any business.
Ethical Negotiations add Value
All successful organizations understand the importance of networking to create strong and reliable partnerships. Owners, directors, and managers from all kinds of companies attend conventions and meetings in the hopes of creating relationships they can leverage in the future. That should absolutely be taken into consideration when you are negotiating. You never know when you’ll encounter someone you’re negotiating with again. In all practicality, if you’re selling your company, your buyer is more willing to accept your estimates and numbers if you tell the truth all of the time. Remember the importance of being honest (your lawyer, too), and you’ll get the results you want from your negotiations.