Trust: Coin of the Realm

Bargaining in Good Faith or "All Hat and No Cattle?"

On the subject of trust in negotiations and human interactions, former Secretary of State, George Schultz, wrote: “Trust is the coin of the realm. When trust was in the room, whatever room that was—the family room, the schoolroom, the locker room, the office room, the government room or the military room—good things happened. When trust was not in the room, good things did not happen. Everything else is details.”

You might remember that as Secretary of State, under President Ronald Reagan, Schultz famously brokered a nuclear arms reduction deal with the Soviets (Intermediate-Range Nuclear Forces Treaty) which changed history and was instrumental in opening the door to Reagan and Soviet Union President, Mikhail Gorbachev, to ultimately end the Cold War.

Bucking a common demonization of the Soviets in the US, Shultz said that he, "...respected [the Soviets] not only as able negotiators, but as people who could make a deal and stick to it.” He was able to see the Soviets as partners in the dealmaking process, at least as it pertained to nuclear arms, and fostered a condition of trust through which he could broker a durable agreement, as history proves, between the two wary superpowers.

While the word “trust” is often bandied about in highfalutin moral terms, it is also a very practical way of living and doing business...until it's not. For the most part, we humans need to trust each other on most things…and we do. It's a matter of mutual best interest that we behave in complementarily cooperative ways. It would be near impossible to get through your day if you could not trust most of your interactions with other humans.

I was thinking about that a few days ago, walking on the sidewalk along a busy highway. How dependent my life was on the presumption that the drivers were watching the road, not looking down at their phones, had tires on their cars that were not suddenly going to blowout, were healthy enough to not blackout in a given moment (that's probably more attributable to statistics and the fates than the drivers themselves), had the skill to stay in their designated lanes, and did not have nefarious intent to drive up on the sidewalk as an act of violence. I trusted, within certain limits, that my life was not in such danger that it wouldn’t be better for me not to walk along that road on my way to the store.

While we can easily be caught in lies and deception because of a human tendency Malcolm Gladwell calls a “Default to Truth,” in his book Talking to Strangers (drawing on Psychologist, Tim Levine’s, Truth/Default Theory), there is no such thing as a successful agreement which is not founded on the principle that both parties believe they are better off with an agreement than not. (Sometimes referred to as the Best Alternative to Negotiated Agreement: BATNA.) So somewhere, somehow, the negotiator needs to be in a position to take that “leap of faith” in order to achieve an agreement. At some point, negotiators need to be in a position of trust if they are ever going to strike a deal.

(I'm also reading concepts around "Epistemic Vigilance" which argues that humans are naturally equipped to detect lies and gauge the reliability of others as opposed to folks like John Shieber, whose "Nietzsche Thesis" contends that our true aim in conversation is self-presentation and social standing, more than truth-seeking, which leaves us vulnerable to lies we are content to abide through a certain default. (See Big Think, November 6, 2023 article.)

And so, how is trust established? In my own experience, one cannot insist on trust. Rather, it must be earned. There’s no mystery here. Adages like: Say what you mean and mean what you say, have been part of the wisdom for a long time. And there’s something to it. If I have reason to believe that you're going to bluff me on important facts in a negotiation, then I will need to force you to show your hand at every turn, which may bog down the scope of what can be achieved in a given negotiations.

A skilled negotiator must have a strong sense of the risks at stake in any deal, and be able to test and verify the terms of those risks before coming to an agreement. Just as important, a negotiator must have a firm grasp on the value of the terms being discussed at the table so they are confident enough to trade on value as part of the negotiations and take maximum advantage of what is to be gained. Negotiations, after all, could be described as a process in which parties determine how they will share and divide risk as part of the terms of a given deal. If parties spend all their time mistrusting the other side’s explanation of their interests, they are likely to leave value on the table because opportunities to trade on mutual interests are diminished. (See the two sisters and the orange story in Roger Fisher's, Getting to Yes.)

Federal Mediation and Conciliation Service Mediator, Moira Caruso, says In Episode III, In the Middle, “Trust is not as important as everyone makes it out to be, in my opinion. I walk into a lot of rooms, and when my foot crosses the threshold, hardly anyone trusts me or each other, to be quite frank. But we can still work together. I don't need your trust, day-one. I just need your cooperation. So, I kind of exchange trust for cooperation, as we go along. I think trust is a really important thing that someone, given the givens, would choose the option that is not going to disadvantage you, or harm you or your constituency. But we are people, and if I have Option A that's better for me, and Option B that's better for you, I'm probably going select Option A. And you might think that you can't trust me because of that, but I'm acting in my own self-interest. Hopefully we can create an option together that is good for everybody, but trust is a tricky thing...Have you ever lied?

When people get hung up on trust, I ask them that question. And I don't think anyone can say no to that question. I think we've all lied. But my immediate next question is: “Okay, so why should I trust you?” And that causes you to think for a second. What do we mean when we say, trust. What trust to me means: Telling them what you're going to do...what you say you're going to do. And in those instances where you can't, or didn't do what you say, you are going to own it and then take measures to make it right. I don't think you can ask much more for people who are coming together in a traditional bargaining sense, where sometimes: better for me means not as good for you.”

Attorney James Haddow, in Episode I, The Voice of Reason, says “Especially in the context of a negotiation, trust is absolutely essential to arriving at a resolution. In a negotiation in which the negotiating parties do not trust one another, it's near impossible to arrive at a negotiated resolution. However contentious any particular dispute might be, however antagonistic the parties may be toward one another, if it's possible to find any scintilla of common ground, something that can begin the process of the parties having at least limited trust in each other, that's going to be the beginning of the path to a negotiated resolution.”

Even in the process of setting up the negotiation, being consistent, sticking to whatever commitments you might make as a party, to show up at a certain time, to provide information that's accurate, little things can be the beginning of building trust, even between parties who are extremely antagonistic toward one another, finding a way to build trust in those circumstances is really the only way to find a path to a resolution, if it's going to be a negotiated resolution….

That's one of those, not even small things, sort of fairly large things that parties, lawyers, can do with one another that begins to establish a kind of trust relationship around the dispute, whatever it might be. We disagree about how this case ought to come out, but we believe that each of us is behaving in good faith. We believe that everyone involved is complying with their obligations under the law. If you're able to establish that kind of trust, fulfilling your obligations under the law, and although there may be a legitimate disagreement about the outcome, we believe that everyone is being forthright. That can go a long way toward getting to a resolution. So, there are elements in the litigation process that are either conflict or cooperation. But they're not necessarily at odds with each other. In fact, they may very well be working symbiotically, if you will, to achieve a more just result.”

And I followed with the question: “I've heard a comment that says something like: ‘The process of arriving at an agreement moves at the speed of trust.’ I'm wondering, are there human affects, ways of communicating that keep you more on that path, the path of trust? And I know that in this process, this competitive/cooperative process, you have to be careful not to roll over.

Jim Haddow: “Absolutely. As a young lawyer, one of the hardest things for me to learn was how to be collegial with other lawyers and at the same time keep a firm position, not yield. So, it has to be possible, for example, to say to another lawyer, ‘I understand how you arrive at the position you arrive at. We're just going to have to leave that dispute for resolution a different day, whether that's going to be by a judge or by one of us persuading the other. But for now, we're not in agreement, and we'll work on something else.’

Part of it is affect, I think, as you suggest, using words to express respect for understanding of your opponent. Part of it is also just being calm, honestly—not being a fire breathing antagonistic person. There are simple things: I know there are lawyers I can call to talk about a case and we can have a frank conversation. I don't have to worry that the lawyer is going to take some snippet of the conversation we had and send it back to me in an email or a letter to try to push a point that they want to make.

There are other lawyers who will do that, so I have to be careful in talking with them. I can't be as frank in my assessment of my own case. But, that kind of mutual respect, where you can have a conversation with an opponent and, without giving up anything in terms of your obligation to your client, you can help move a case forward just because there's a certain amount of mutual respect. You can have a frank conversation and you don't have to worry about being exploited. A lot of elements in how trust gets built in the context of my work, anyway, it's partly the words; it's partly how they're spoken. You work with the same people a certain number of times, and just by virtue of the fact that you've gradually trusted them a little bit more and a little bit more over time, and each time they have proved worthy of that trust, you develop trust relationships with people.

It's pretty rare that you just say, ‘Okay, well I'm just going to be a hundred percent trusting without any evidence that that's justified.’ But, it always happens that it has to start someplace. You have to trust at least a little bit without any evidence, to begin with, in order to test the water and see if there is trustworthiness. The hard part is deciding to be the person who breaks that ice, be the first one to stick your neck out, even a little bit, in the hope that it will turn out that the person you're sticking your neck out to is not going to chop it off."