Honesty And Cooperation In Business Relationships
“If you tell the truth, you don’t have to remember anything.” - Mark Twain.
The simple logic of this famous line is the wise advice that good parents have offered to their little treasures for generations. But how important is honesty in building & maintaining valuable relationships? Is honesty always the best policy? And is it natural – or something we have to practice? The answers are far from simple and the truth may surprise you…
In the July issue of Scientific American, Martin Nowak, a Professor of Biology and Mathematics at Harvard who has studied the science of evolution and collaboration mirrors the famous work of Charles Darwin, when he says; “we have accomplished monumental feats by working together. Indeed, humans are the most cooperative of species – supercooperators, if you will”
Nowak has researched human cooperation, game theory and the paradox of The Prisoners Dilemma. In such game setups, results show that whilst individuals initially choose to reward themselves more rather than share with other players, over time the games witness the birth of cooperation, trust, mutual gain and generosity. This ability to cooperate is a vital trait of successful animals, tribes and individuals. Nowak points out that cooperation is achieved through direct and indirect reciprocity and an ability to make sacrifices and to think selflessly. In plain speech – you have to give up something to get something. And, it’s a case of you scratch my back, I will scratch yours and I may also scratch theirs too. Nowak points out that Toyota rose to dominate the motor industry when it started to cooperate more with suppliers. Success is a result of sharing, trust, being open and collaboration…
Writers such as Scott Berkun, Tom Kelley and Steven Johnson all reinforce the importance of partnerships and collaboration to successful innovation. I refer to their work in Myths of Innovation and The Partnership Paradox. The central element to effective business-to-business relationships is that the are managed by people with strong soft skills – an ability to show empathy, understand the other and listen. Of course you cannot avoid the need for a good plan and product. But it’s the superior soft skills that determine relationship success. So how important is honesty in this? And how honest are we?
Dan Ariely explored honesty in a recent lecture at The RSA. A frequent contributor to Harvard Business Review, Ariely is professor of psychology and behavioural economics at Duke University and the founder of The Center for Advanced Hindsight . He has extensively researched how honesty & lying affects our behaviour and studied how people actually behave in the consumer marketplace – as opposed to how they should or would perform if they were completely rational. He revealed that lying is universally common from the US to China, from Europe to the Middle East. Journalists, politicians and bankers are all good liars – with those that look after our cash slightly more likely to be more dishonest. But they are not alone. In a 10 minute conversation the average person will be ‘diplomatic with the truth’ – about three times. However, its a question of degrees. Not all these lies are horrendous Machiavellian porkies designed to achieve fraudulent advantage. The best story tellers stretch the truth and creative people are more likely to exaggerate. Crucially Ariely points out that lying is ‘domain specific’. We may feel it is OK to lie about certain things to retain friendship and refrain from speaking the brutal truth. As social actors we rationalize the truth based on our calculation of positive and negative outcomes; what is the risk? In high risk – high value business relationships honest, open and communicative conversation is good for business but its worth recognising that dishonesty may be part of our own behaviour – and that of others. However, it’s a matter of context. Stretching the truth about a late night out with the team may make for good comical effect and be socially acceptable at the right time. Whereas misleading a partner on key project delivery schedules is capable of permanently damaging a valuable and hard-won relationship and regaining the trust that is lost, may be difficult to do.
Our ability to maintain important business relationships is not simple. We are complex – and whilst we are inclined to cooperate we are also as likely to stretch the truth at times too. Understanding that consistently telling the truth can often be a weakness in ourselves and others – may just be the one essential truth that is hard to hide.
For further information on innovation, The CollaborativeEdge, MarketingCafes or partnership and relationship management consulting please contact Andrew Armour or visit Benchstone. Thanks to The RSA for another great event.