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 / Summer 2012 / Issue 67(originally published by Booz & Company)


Connections with Integrity

For example, I once met two partners in a startup software company who were negotiating a deal with a major company interested in licensing their technology. It was clearly in the startup’s interest to participate, though they would have to wait some time before they saw a direct financial return. One of the partners immediately understood that this represented a valuable opportunity, with potential strategic importance. The second partner kept asking: “Why would we do this? We have no interest in what they want us to do.” He saw no reason to take a risk without the iron-clad guarantee of a future payoff. In this way, the second partner revealed his own attitude about trust. He would extend himself for others only if compelled, and thus did not trust others to do the same for him.

If you do business with people who have this attitude, in which trust is limited and so are the kinds of alliances you can form with them, you need to ensure a stream of short-term rewards for them so they constantly feel they are getting something back. These kinds of alliances are inherently risky. The moment you run into problems and the rewards dry up, even temporarily, these people will seek an escape route. They are unwilling to share your pain. They will not invest in an authentic relationship with you. They do not trust you to honor that relationship in the future — because they themselves would not. The moment your interests no longer align with their interests, you will have problems.

2. “I’ll do something for you, but I’m keeping track of what you owe me.” Some people approach life as if it works on a tally system. When they do you a favor, you owe them something in return. Maybe not today or this month or even this year, but before too long, they expect you to pay them back in some manner. This attitude can rear its head at the very beginning of a business discussion. A prospective investment partner might say: “I’ll show you this deal, but I expect you to show me your next good deal.”

This attitude, too, is highly correlated with a form of risk aversion. These individuals are no less focused on reward than those in the previous category. They are simply willing to wait a little longer for it. In a way, this makes them even less attractive candidates for a professional partnership, because they are too focused on their mental scorecard to invest in the relationship in a meaningful manner. Furthermore, if you give them something, they’ll believe it’s only because you want something at least as valuable in return. That’s just the way their minds work.

This type of alliance can run into trouble when your allies’ tally systems — their way of accounting for costs and benefits — are different from your own. This happens more than you might expect, because of a subtle aspect of human nature: Even when people are well intentioned, they tend to overvalue their own contributions and undervalue those of others. If there is tacit disagreement about the value that has been exchanged, or if stress prevents you from fulfilling your part of the bargain in good time, the alliance may not bear the load. These people are likely to get fairly hostile if they feel that the score is uneven or that they’ve done something for you and you’re not giving them something that they specifically want in return.

3. “I’ll invest in this relationship, and I expect you to invest commensurately over time.” Unlike those who are always keeping score, tracking who did and gave what, these individuals often make alliances with the understanding that each side can be trusted to honor its commitments to the other. Each is expected to provide a reasonable level of return, at least in the long run. But these people don’t expect you to explicitly say what form that reciprocation will take, or to offer a deadline by which it must be provided. There’s a mutual understanding that the relationship itself is important — and that sometimes one party may do something very one-sided on behalf of the other, with the view that it helps the alliance and the relationship, and that all favors even out in the long run.

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