How To Build Trust In Negotiations

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Trust is an essential part of negotiations for knowledge workers. It is so important, that it may even be considered the true goal of the 8 principles I describe in Extreme Contracts!

In 2011 I had a horrifying “clients from hell” experience that pushed me to investigate how I could craft better agreements with my customers. I had already spent months fighting a battle to bring home a web development project for a large Italian non-profit. Requirements were very volatile, the product owner—the person in charge of defining them and their priority—was declared candidly “I don’t understand anything about the web.” In general, in that organisation, getting even the slightest focus on the project they had assigned to us seemed impossible.

We had set up an iterative development agreement to deliver working software every two weeks so that we could use it as an effective measure of progress. Iteration by iteration, we had tried to make sense out of the mess of requirements that kept emerging from the product owner and other random users, all the while hoping to converge on a successful conclusion of the project within the planned deadline. We had signed a fixed price agreement with a fixed delivery date. That meant—now I know—only one thing: they had the upper hand, and had no incentive to reduce the ever-growing volatility in their requirements. Unsurprisingly, the project ended up delayed, and the down payment we received at the start was not enough to cover our costs.

“How can I avoid this in the future?” was the question I had to answer…

When it seemed the product owner was ready to reach the end of the project, it sounded like a blessing to us. We were so happy. The nightmare was finally over and we were free to pursue other projects with other customers. Above all, it was finally time to get paid! The fixed-price contract had us starving until the very end of that project.

When the product owner accepted the delivery and we sent the final invoice, though, we had a bad surprise. The boss of the product owner, who had shown no interest up to that point, all of a sudden decided to take a brief look at the website we had developed. Despite the product owner’s acceptance, he decided unilaterally and irrevocably to halt the payment and started asking for more features he thought were missing as well as changes to the existing ones. Unfortunately, he was the only one with the authority to press the big red “APPROVE TRANSFER” button, so we were hostages to his requirements.

It was too much. I couldn’t take it anymore! In a burst of anger, I decided to quit. Even if it meant walking away from the money. I had to cut my losses!

No negotiator is an island

What happened in the story above is perfectly described in Ury’s book “Getting to Yes“: you never negotiate with just one person. You always negotiate with a system, and the person you are talking to is probably just the touchpoint, or one of the possible touchpoints, within that system. No negotiator is alone.

So, for example, if you are to negotiate the release of some hostages from a hijacked airplane, you have to take into account not only the hijackers’ interests, but also:

  • the hijackers’ leader
  • the community the hijackers are representing
  • the global audience watching them
  • the hostages’ families
  • and so on…

This is called a system of interests.

My friend experienced the same “negotiating with the system” situation. She is an architect and had to re-design a kitchen. Initially, she thought that the property owner was the only decision maker. However she soon realised her mistake! Even something as simple as a kitchen remodel is a system of interests: the needs of a whole family are involved. That includes the owner, his partner and the children even.

Each family member was lobbying to get their wishes included in the final project – in spite of the fact that the architect only had one point of contact. She managed to solve the puzzle when she understood that the liason was himself confused and trying to piece together several different, sometimes inconsistent needs.

It gets even more messed up when you end up negotiating with the person who has the least power to make decisions! Nassim N. Taleb once wrote:

Never trust the words of a man who is not free. https://twitter.com/nntaleb/status/931514819701698560

And he’s right! A person whose decisions can be overridden by their boss cannot truly keep their word. If they commit to decisions that can be later changed by someone with higher authority, then those promises are just either denial or betrayal of trust. Your trust.

Because of this understanding, Extreme Contracts practitioners make sure every promise is made by the only person who can break them: “the grinder”. We want to talk with those who call the shots. 

The expression Talk to the grinder, not the monkey” means we want to deal with the grinder playing the organ at the corner street, and not to the monkey performing the tricks and holding the cup to collect the offers.

Negotiation is between organisations. Trust is between people.

The real aim of a successful negotiation should be building trust as quickly as possible. Trust is necessary to achieve positive results in a collaboration between organisation. During one of our countless conversations on how teams of knowledge workers organize their work, Alberto @ziobrando Brandolini once said:

“Trust among organisations doesn’t exist. Trust among people exists. The higher the stakes in a collaboration between two organizations, the more fragile is trust as a concept. I may look my customer in their eyes, but if in six months they will be gone working for another company, all our trust, all our capital, all our preferential relationship will be worth less than zero.”

Trust is at the core of successful collaborations in knowledge work, so Zio Brando’s insight is critical. If trusting the person we are negotiating with is crucial -to the point of making it the real goal of the whole negotiation- can we really trust someone who is negotiating with no decision-making authority? The answer is no.

After the bad ending of the project with the big Italian non-profit, I started broadening the conversation to all the key decision-makers from the very beginning of the negotiation. This allows for every voice to be listened to, for every nuance to be considered, and for every perception of the problem to be acknowledged. And you know what? When people feel listened to, considered and acknowledged, trust kicks in.

And since I am the one speaking to everyone involved in the decision making, the responsibility of delivering a clear and honest message falls on me and me only! When we allow an intermediary without decision-making authority to be our counterpart in the negotiation we allow our message to be:

  1. distorted by our counterpart’s personal perceptions and private agenda;
  2. simplified by badly written summaries;
  3. reduced to something very close to our competitors’, the death of the so-called unique selling proposition.

We shouldn’t ruin our chances of success. Our negotiation should always be escalated as soon as possible, to as high as possible. We should always test the true authority of the person we are negotiating with—more on that in a future article. We should kindly-but-firmly escalate the issue up to the first manager able to make final and clear decisions quickly to avoid having a blow up in our hands later.

In Extreme Contracts, we call this principle “Talk to the Grinder”. If you’re interested in reading one chapter of the English edition of Extreme Contracts for free, head to this page.

*this article originally appeared on Scrum Master Toolbox, run by my friend Vasco Duarte. This is a lightly edited version for clarity.

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