Let's start with avoiding problems. The biggest concern of any negotiator should be to ensure that the agreed terms are carried out and produce the desired outcome. But if, after the fact, one side determines that the deal was not fair, all bets are off. As a species, we reject cooperation with those we feel have taken advantage of us.
Several years ago a fascinating story appeared in the science journal Nature.[6] A study had been made of monkeys—not the higher-order apes who have been taught to speak in sign language or to use computers, but little organ-grinder monkeys. The experiment showed that they, like humans, get really mad when they are offered what they feel is an unfair deal.
The monkeys in the study were trained to play a barter game with the human researchers. Whenever a monkey would hand over a small rock, a researcher would give it a slice of cucumber in exchange. Trading rocks for food seemed like a great deal to the monkeys, so they happily swapped their rocks and munched on their winnings. However, once the monkeys had mastered the game, the researchers changed the rules. While they continued to "pay" half of the monkeys in cucumber slices for their rocks, they began awarding the other half with grapes in exchange. The monkeys who got grapes were naturally very happy with their "raise"—grapes, in monkeys' eyes, being a higher-valued currency than cucumbers. The interesting response, though, came from the monkeys who were still getting cucumbers.
For the latter group, what had once seemed like a more than fair deal (cucumbers for rocks) now seemed grossly unfair ("They're getting grapes, and we're supposed to be content with cucumbers!?"). The monkeys who continued to be paid cucumbers went on strike, rebuffing all further dealings with the humans, refusing to eat the cucumbers they had been given, and in some cases hurling their cucumber slices back at the researchers.
What we learn from this experiment, beyond the fact that monkeys reasonably prefer grapes to cucumbers, is that fairness is not merely a nice word or perfect-world ideal. Quite the opposite. It's a constant emotional need, hardwired into our brains. Even monkeys demand it! And when we humans, like monkeys, feel that we have been treated unfairly, we cease cooperating and will often seek revenge.
The monkey study also shows what an avalanche of lawsuits and broken deals should have taught us long ago but still seems to get lost on hardball, win-lose negotiators: negotiation is not just about sealing the deal. The need for fairness does not evaporate with the drying of the ink on a contract. Fairness remains fluid, adjusting as circumstances change or as we gain more information. We can trick people or hide information to get a signed agreement, but once the other side finds out the truth, all bets are off on any but the briefest transactions being carried out as promised. New information causes us to recalculate the terms of what is fair. What had once seemed to the monkeys to be a winning trade of a useless rock for a juicy slice of cucumber was instantly recalculated into a losing bargain based on an insipid cucumber and a delectable grape. And with that recalculation, the concept of fairness shifted.
The monkey study teaches us five lessons about relationships, which we all know about ourselves but often forget to apply to others. Every good negotiation should take these to heart:
Everyone (not just ourselves) demands a sense of fairness.
We feel less obligated to honor contracts we feel are unfair.
Fairness is relative (it is affected by what others are getting).
The perception of fairness is unfixed (it changes with new information).
Technical fairness ("You freely accepted these terms") is not good enough.
Why are these crucial lessons for negotiators? Quite simply because fairness has a tremendous impact on the willingness of the parties to implement agreements. Most agreements that fall apart do so because one side—consisting of moral, conscientious, reasonable people in most cases—decides that in the original agreement it was treated unfairly.
Let's look at the case of a professor I will call Beth, who told me how she had felt "cheated" when she got her first job out of graduate school. During her doctoral studies, Beth had worked part-time as a research assistant for one of her professors. After graduation she was offered a job at a respected think tank. She described how thrilled she was to have landed her "dream job." She was so happy to get the offer that she put almost no thought into what she would be paid. So in her final interview, when one of the partners asked what salary she expected, she had to make a quick mental calculation to come up with a number that sounded fair and reasonable. Not knowing the market rate, she based her salary request on what she had been earning as a graduate student. Beth explained that she had been paid an hourly rate by her professor that came to an annual equivalent of $60,000, but she felt that with her PhD in hand she deserved a bit more. As the boss continued to look at her expectantly, she ventured somewhat nervously, "$75,000?" There was a long silence while the partner seemed to ponder whether the new hire was worth it. Then finally, to Beth's immense relief, he nodded and said, "Okay, I think we can do that," and she was hired.
Elated at her new, exciting job, and higher salary, Beth threw herself into her work, putting in long hours on nights and weekends and quickly earning a reputation as an incisive researcher and analyst, sought after by project leaders. Simultaneously, she became close friends with the HR director, a woman a few years older than Beth with whom she would attend concerts and plays from time to time. When Beth's year-end review and salary discussion rolled around, the HR director called her into her office. Without a word the HR director placed two documents on her desk, within Beth's direct line of sight, then excused herself, saying she had to step out for a moment. Naturally, Beth leaned forward and glanced at the documents. Then she looked closer. They were the employment contracts of her fellow analysts, both hired around the same time as she, and both making $90,000–$100,000.
Beth was aghast. She was also embarrassed, hurt, and confused. But more than anything, she was mad. At first she was mad at herself for having asked for so little. "I knew on the one hand that the fault was mine for not having done my homework," she said. She admitted that the salary of $75,000 had been technically fair. That was the amount she had asked for; her boss had not lied to her or actively misled her in any way. Others had asked for more, so they had gotten more. All of that she accepted on an intellectual level. Yet, on a deeper, emotional level, she grew increasingly mad at her employer: for paying her less for the same work as others, for withholding information, and for "taking advantage" of her in order to save a few dollars, when she had been giving her all to the company. He may have honored the technical rules, but he had broken one of the fundamental rules of relationships—fairness—and in so doing had lost her trust.
As much as she tried to justify the difference in strict market or legal terms, she just wasn't able to get over the fact that she was being paid less than her colleagues for the same work—and that her boss had knowingly taken part in this unfairness. It became harder, she recalled, to put in the same long hours. She felt indignant whenever her boss praised her work. She resented the extra work thrown her way, which had once filled her with pride. Even when she demanded and won a substantial raise in her year-end review, her heart was no longer in the job. A couple of months later, when she got an offer to help start up a competing think tank at a nearby university, she left her job without looking back.
Beth's experience is hardly unique, but it is fascinating for the mixed responses it elicits. Many people to whom I've told the story respond by arguing that the deal was fair: Beth, they say, got what she asked for, and it would be unreasonable for an employer to give someone more than that. However—when they are asked to stop thinking of the story being about an anonymous "Beth" and instead imagine themselves, in their current jobs, discovering that every other employee at their level was earning 25–30 percent more than they were—virtually everyone admits that they would not feel it was fair and that they would probably look for another job.
While we all feel angry when we are treated unfairly, it's remarkable how many of us have trouble imagining that others would feel the same resentment if it happened to them. Note the number of people who felt Beth's situation to be fair when they considered it in the abstract, but utterly unfair were it to happen to them. Because they focused more on technical or legal definitions of fairness when the issue didn't apply to them personally, they were less able to predict a problem arising from Beth's deep emotional sense of unfairness.
In the same way, many negotiators take pride in outmaneuvering or openly beating the other side as if they were in a sports competition. They may even go out of their way to upset or bully their "opponent" to "put him off his game." All is fair, they argue, as long as you nominally play by the rules. A game is over when the closing bell rings (or a referee reaches a decision), so it doesn't matter if the other side likes you, trusts you, or agrees with the outcome. What they forget, however, is that most negotiations are just the beginning of a relationship, in which you need the cooperation of the other party to get the agreed result and to build or safeguard your reputation. Therefore, doubts about the fairness of the agreement or resentment over perceived ill-treatment during the negotiation can lead to a much less positive outcome than the one you thought you had won.
Why do we have to worry about feelings? The simple answer is that even the most hard-nosed among us act more on feelings than on logic or mathematical equations.[7] How many individuals or businesses spend small fortunes in court over disputes worth a fraction of the costs? Once we come to feel that someone has taken advantage of us, we will rarely make the cool, analytical calculations taught in game theory: "Am I still profiting from this deal?" Instead, like the businessman who walked out of the potentially lucrative deal because the lawyer on the other side didn't shake his hand, we will seek to balance the scales and at the same time to punish the person (or organization) who has made a fool of us, by ensuring that he or she no longer wins. Some may dismiss this as irrational, but it is only so if we confine our definition of interests to immediate financial gain. Punishing someone who has caused us intentional pain not only sends out a very sensible message—"Don't think you can do things like that to me and get away with it!"—but also activates the pleasure centers of our brains in much the same way as eating chocolate or having sex.
Whether you agree with their logic or not, the fact is that people who feel that they have been treated unfairly are much less willing to play by the rules in the future. Ethics are a two-way street. We all have an internal honor code that guides our conduct, but when we are treated dishonorably, that code tends to go out the window. A quick example: a study of organizational morale following employee pay cuts showed that internal company theft increased by an average of 500 percent if the employees felt the process had been handled unfairly or without sufficient consultation.[8]
Put yourself in Beth's shoes. Would you work as hard once you found out how much less you were getting than others at your level—or would you start clocking out at 5:00? Would you be as loyal to the company—or would you be looking for another job? Even if you got the pay raise, would you trust or seek to please your boss as much?
Your answers to these questions show why playing fair is important. You can make very profitable deals without it, but you are taking a big risk, especially over the long term. A used-car dealer can sell a lemon on the theory that it's a onetime transaction with a customer he'll never see again, because a new sucker is born every minute. However, Beth's employer's goals involved both sides working together over time. Had her employer thought more about his goals, he would have understood that his priorities were (1) to hire the best employee (2) at an affordable price, who would (3) get the company's work done well and swiftly, (4) please the clients, and (5) help build a more profitable business. His goals were not (or should not have been) to save $1,500 a month by hiring a short-term, disgruntled employee who would benefit from a year's worth of on-the-job training that she would then take to another firm—which is precisely what happened.
For something so basic to our emotional needs, "fairness" is an unusually fuzzy concept. Other fundamental needs—food, shelter, even love or recognition—have clear and universally understood meanings. Fairness, on the other hand, exists uniquely within the eye of the beholder. Dictionary definitions just send you in circles: "fair" means "equitable," which in turn means "just," which in turn means "properly due or merited," which leads us to "deserved," and from there to "right," and finally to complete frustration with the alternatives of "consistent with prevailing or accepted standards or circumstances" or "suitable for a particular person, condition, occasion, or place." In other words, "fair." Like pornography, fairness is one of those things that is harder to define in the abstract than the particular.
That said, we do know some things about how fairness is felt in the context of a negotiation. Broadly speaking, our need for fairness kicks in at three different stages in the negotiation and implementation process. It's a long, even daunting, list, but sidestepping any single item on it can break a deal:
Process fairness —the way the negotiation is conducted. For example, do all parties
Have a chance to voice their views and be listened to respectfully and empathetically?
Feel their concerns are being taken seriously?
Receive accurate and reasonably complete information?
Receive sufficient explanations to help them understand and accept arguments made to them?
Feel they have a role in the decision-making process?
Have sufficient time to make thoughtful decisions?
Equity —the sense of a win-win deal. For example, do all parties
Feel they have received a reasonable return for their contributions to the transaction?
Feel that everyone benefits to a degree comparable to what each has brought to the table (balanced against the realities of supply and demand)?
Feel that their benefits measure up to those received by others in equivalent positions?
In the cases where there are disparities understand and accept why the disparities are justified?
Conduct in accordance with expectations—how the agreement is implemented. For example,
Are promises kept?
Does the outcome of the deal more or less correspond to claims made during the negotiation?
Were mistakes corrected?
Have the partners sought to maintain the spirit as well as the letter of the agreement?
Do the parties continue to communicate openly and treat one another respectfully?
Is there reasonable flexibility in dealing with problems, new information, and unforeseen changes?
The third stage takes us beyond negotiation per se, but it underscores the vital point that negotiation and implementation—what we say and what we do—are inextricably linked. The first two stages fall directly within the realm of negotiation, so let's spend a little more time considering them.
A former client of mine, the "Tan family," owned and operated a company that provided cleaning and food services for a major airline. The airline was a $20 billion public company making over $1 billion a year in profits. The Tans were one of several vendors who serviced its planes between flights. Although they made a tidy income for a small family business—around a quarter of a million dollars a year—clearly there was a significant disparity in power and resources between the buyer and seller. This power disparity regularly spilled over into the negotiation process.
Negotiations between the parties were more of a monologue in which the airline's procurement team laid out the terms: "This is what we want, and so this is what you will do." At first the Tans were so excited to have this blue-ribbon customer that they brushed off the airline's aggressive style as just the way big companies talk. After all, they reasoned, their business was profitable, so what did it matter if their partners were bullies?
Over time, however, the Tans grew increasingly resentful that their interests and genuine concerns were never considered, especially as their partner's actions began to cut into their profits. Several times the airline fined them large sums for damages allegedly caused by their workers but refused to let them investigate the cause or question the damage assessment. And they changed contract terms by fiat. When the Tans warned the airline's contract management team that its new cost-cutting policy of reducing the number of workers cleaning each plane without increasing the turnaround time for cleaning between flights would inevitably reduce the quality of the job, the airline negotiators blew them off, saying, "You should be grateful we're offering you our business. We're not here to help you improve your internal operations. If you don't like the terms, we'll find someone else to do the work."
Pretty tough stuff. Some might even say with admiration that the airline knew how to drive a hard bargain. The problem is that the Tans got so fed up with being ignored, pushed around, demeaned, and bullied that they couldn't take it anymore. The money, in their minds, just wasn't worth the humiliation. Having reached their emotional limit, they announced to the airline that they were closing up shop immediately (easy enough to do when your main overhead is day laborers). Not coincidentally, the walkout took place at the very height of the travel season.
As the airline scrambled to deal with a crisis of dirty planes, the contract manager threatened the Tans' firm with a lawsuit. The Tans replied that because of the fines and the contract changes the airline had imposed, they were on the verge of bankruptcy in any case, so the airline could sue away. A couple of hours later, now desperate, the contract manager called back with an offer to forgive the fines and discuss better terms, if they would send their workers back. The family held a conference (in which they were clearly enjoying the chaos they had wreaked), then agreed, on the condition that they be consulted before any future fines or changes were imposed. The airline accepted.
Although the Tans' story is quite different from Beth's, they both express outrage over perceived unfairness in the negotiating process. The Tans felt browbeaten every time they negotiated with the airline. Beth, on the other hand, found her interview to be warm and respectful, her future boss asking her many questions and showing a keen interest in her ideas and work preferences, which only increased her sense of having been duped. She cringed with embarrassment in recalling how her boss had intentionally misled her: the long, calculated pause after she had stated her payment terms, while he seemed to weigh whether he could afford it. How could she have fallen for such an old ruse? Both Beth and the Tans recalled their negotiations as humiliating experiences—and both ultimately walked out as a result.
Process fairness is necessary not only for building a lasting deal. It's also central to creating value. People tend to clam up when they feel they are being ignored. We dig in our heels when we feel we are being coerced. And we lose creativity when our ideas are dismissed. None of these is conducive to achieving a deal that enhances value.
To return to the Tans' case, rather than belittling their concerns about the feasibility of cleaning a plane in fifteen minutes with a reduced team, the airline's contract manager could have created a much better outcome for his company, its customers, and its reputation had he inquired about the problems they foresaw and listened to their suggestions about how to solve them. If the airline's goal was to maintain top service levels within budget constraints, a "both/and" approach (exploring how to both reduce costs and maintain service levels) would have served its interests far better than the age-old "either/or" or "take it or leave it" approach it chose. The discussion would at the very least have made the Tans feel that the airline listened to their concerns. By working together, the parties might even have come up with better ways of deploying workers or taking advantage of work-saving technology.
The keys to process fairness are
Open, respectful, and honest communication
Active listening by all parties
Empathetic consideration of both sides' concerns
Giving sufficient time for the other side to question and understand
Comprehensive explanations of the reasons behind your positions
Openness to new ideas for resolving issues
Offering a choice rather than forcing an outcome
There is a significant difference between an agreement negotiated with respect and a deal that is forced. The former is far more likely to be honored. In fact, the same study that reported that employees were five times more likely to steal from an employer who cut their pay without fair process found that there was no significant increase in theft among employees whose pay was cut similarly but who felt the process had been fair, because they had been given an opportunity to ask questions and raise their concerns, had received full explanations, and were satisfied that the management had openly explored various means for resolving the problem before making its decision. The difference between the two groups, therefore, was not the result of the pay cut (which was the same in both cases) but of the process: the manner in which the issue was communicated and the extent to which they felt they had a voice in the matter.
A common error among negotiators is that they feel that in order to establish their negotiating power they need to start off by acting as if they are confronting public enemy number one. They scowl, posture, interrupt, and lie, and they openly insult their counterpart. Or they push their agenda so hard that the other party can't get a word in edgewise. Or they smile and say "win-win" while they make one-sided demands or hoard all but the most basic information as if it were their life savings. Then they are bemused when they get no deal—or a very bad deal—or their counterparts publicly announce that they will never do business with them again.
Yet how could they possibly think that they will "win" a negotiation by openly seeking an unfair advantage? Do they think that it will inspire the other side to want to work with them or help them make money?
Would it inspire you?
This is a hard pill for many negotiators to swallow, but here it comes: if one side is seen to profit disproportionately from the deal, the other side will look for an excuse to break it.
There are dozens of highly publicized cases of this, especially in cross-border contracts. One of the most famous is Enron's Dabhol Power fiasco, which dragged on for a decade from 1992 to 2001. The bare bones of the case are these: In 1992 the Indian state of Maharashtra, whose capital is Mumbai, was desperate to bring in foreign investors to develop its increasingly inadequate power grid. However, because India had a history of nationalizing foreign companies, virtually no international energy company was willing to touch the deal. Enron, always ready to take gambles for potentially big profits, was the sole exception.
As the only company willing to take on the Dabhol Power Plant project, Enron International enjoyed—and exercised—disproportionate muscle in the negotiations. In a series of closed-door negotiations marked by threats, walkouts, and total disregard for normal rules of the competitive bidding process, Enron's negotiators pushed through what (on paper) looked like an incredible deal. Enron International and its consortium would build, own, and operate the Dabhol Power Company (DPC), a 2,000- 2,400-megawatt power plant near Mumbai. Instead of using coal, which was cheaply available in the region, the DPC plant would run on liquefied natural gas (LNG). Although this would more than double the price of energy for the consumer, it had a distinct advantage to Enron, since the fuel would be bought from an LNG facility Enron International was then developing in Qatar. Win-win, Enron-style: we win, then we win again. In fact, it was even more heavily weighted in Enron's favor, since the deal was made virtually risk-free. The Maharashtra State Electricity Board was contractually obligated to buy the electrical power produced by the plant, regardless of actual consumer use, and the DPC was even exempted from paying tax on the earnings.[9]
Realizing that the lopsidedness of the deal created some potential for political risk (the World Bank had openly condemned the plant's production capacity as excessive, forcing the residents of Maharashtra to pay for far more kilowatts of electricity than they could possibly consume), Enron International sought to protect itself from any future lack of cooperation on the Indian side by sealing the agreement within a "water-tight" contract. Enron International's spokesman crowed that the contract they drafted and pushed through had it all: "a strong security structure, for instance, letter of credit, an escrow mechanism, a Maharashtra-government guarantee for the entire project and a partial government of India guarantee."[10] Specifically, the twenty-year contract included a guarantee by the Maharashtra State Electricity Board to purchase a minimum of 90 percent of the plant's monthly output (which exceeded actual demand by nearly 50 percent), backed up by a 100 percent payment guarantee from the Maharashtra state government and a counter-guarantee (in case both the electricity board and the state should default) from the central Indian government.
The only problem was that once the electricity plant was up and running, no one—not the citizens of Mumbai, the state of Maharashtra, or the Indian government—was willing to pay the high prices the DPC was charging.
It didn't matter that everyone originally had agreed to the terms. The Indian under-secretary of economic affairs admitted so openly: "When we read the fine print of the power purchase agreement, we realized that perhaps the mistake was on our side as to why did we agree to such exorbitant tariff rates." But regardless of where the initial blame lay, he said, the bottom line was that the price and other terms were unreasonable.[11] From the minute the contract terms were announced, the unfairness had begun to stick in the losing side's craw, manifesting itself in charges of corruption and backroom dealing. Price riots followed. Once a new government was elected in Maharashtra state (on the platform of throwing Enron into the sea), the deal was dead in the water.
Enron sued, of course. Maharashtra state countersued. Calling on the dispute resolution mechanisms in the contract, Enron International initiated arbitration proceedings in London. Maharashtra refused to show up. Eventually, beaten by the sheer force of Indian resistance, Enron conceded more generous terms, but by then it was too late. Just months after the power plant finally became operational, in 2000, the Indians defaulted on the deal. In a last bid to make something out of its $3 billion investment, Enron got the White House involved. As luck would have it, the day before President George Bush was to speak with Indian prime minister Vajpayee on Enron's behalf, the company collapsed under the weight of its greed.
After the debacle, the Enron spokesman, who had earlier gloated over the perfect contract, reported that he had learned a valuable lesson. Contracts, he said, needed even stronger security mechanisms and more-binding remedial clauses. As usual, the powers at Enron had missed the point. The problem wasn't that the contract was less than perfect (no contract is perfect, as any good litigator will tell you) but that the agreement was patently unfair.
We see smaller cases of this "fairness restoration" impulse every day—especially in times of economic stress. I am not arguing that people shouldn't honor agreements they deem to be unfair. My point is merely a warning. People who feel, in retrospect, that they didn't get a fair deal very often don't keep their promises—regardless of the fact that they signed a contract. If that happens to you, then all of your hard bargaining has gone to waste. It just doesn't pay to be seen as coming out too far ahead.
So what can negotiators do to avoid this outcome? Some, like the infamous used-car salesman, will try to paper over bad deals with small giveaways at the end. However, it is far more effective in longer-term deals to control your desire to take your future business partner to the cleaners, keep your eyes on the ultimate goal, and give clear and convincing reasons for everything you ask for and all perceived imbalances from the outset. Explanations made after you have been "caught" are never as effective.
Thus, an employer who starts a new hire at a lower salary than his or her predecessor would be better off not disguising the fact but rather explaining the reasons for the salary offered, such as that the new hire is coming in with fewer specific skills or weaker overall experience than the norm. The airline negotiators could have explained to the Tans that they do not like cutting costs but that they are being forced to by rising fuel prices and an increasingly competitive airline market, thanks to the large influx of discount airlines; and they could have asked the Tans for their ideas on how to manage costs. Enron International could have followed due process and had open dialogue with the relevant Indian interest groups to explain (and modify) their position before throwing billions into building a power plant that would never earn them a penny.
Remember that fairness cuts both ways. One of the most effective tools for deflecting demands for special favors is to explain that you treat all customers (or all who fall within a certain category) equally, and that for you to give preferential treatment to one would be unfair to the others. It's a difficult argument to resist. Few of us like to say we oppose fairness. More practically, even though your counterparts may not care in the least whether others are treated fairly, they have a strong interest in ensuring that they are, so they would have a hard time pressing you to become less transparent, which could come back to bite them next time.
Here is a final personal story to illustrate this point. Years ago I coached a Thai business school team that took part in an international business case competition. To everyone's delight, they qualified for the finals. Then the problem hit: there were insufficient funds to attend the weeklong championship rounds to be held in Montreal. Never quitters, the students scrambled for money, coming up with a corporate donation system with three categories of funding—donor (below $1,000), silver circle ($1,000–1,999), and gold circle ($2,000 and above)—each with an increasing set of advertising and public relations benefits. The students did an amazing job of publicizing their cause and pulling in donations. By the time the competition was just a week away, they had raised nearly all they needed, short by only $1,500 or so. They had resigned themselves to paying the remainder out of their own pockets, when the fateful call came in. A local company had read in the newspaper about the students' success and wanted to make a donation of $1,000. The students were elated. Problem solved! Well, problem almost solved. The only condition was that the company wanted to be listed as a gold-circle donor. New problem.
Knowing that I might be killing the goose that was about to give us a silver egg, I patiently explained to the woman on the phone that only companies who contributed $2,000 or more qualified for the gold circle. "The other companies in the gold circle each gave at least $2,000," I said. "It would be unfair if, after requiring that level of donation from them, we then let in another company that contributed only half that amount. It is important to us to respect all of our donors—and to keep all of our promises."
"But we are helping you out by bringing you money late in the day, when you desperately need it," the woman replied.
"That's true," I said, "and we're extremely grateful for whatever you can donate. We do understand that you've missed out on some publicity by helping us at this late stage, so we're happy to give you additional benefits beyond the usual silver-circle category to make up for it, such as a special PR event. We're open to any suggestions you might have. That said, we simply cannot break our word to the gold-circle donors who were there for us from the start by changing the rules they had to honor. I hope you will understand."
The caller said she would have to discuss this with her boss and hung up. I then faced some very annoyed students. They might lose the donation because of my insistence on fairness, they grumbled. "Perhaps," I replied, "but why should that happen? We have welcomed their help, been fully transparent, and offered them other options. They will see us as fair and trustworthy. At the least, even if we lose this donor, we will ensure the loyalty of our current donors if we need to call on them in subsequent years."
Half an hour later the phone rang. "My boss has decided to donate $2,000," the voice said. That is the power of fairness.
Fairness doesn't require a Marxist society in which each gives according to his ability and collects according to his needs. Nor does it mean giving up on your goals or giving away the store. It merely means being open, honest, and reasonable; offering explanations, legitimacy, and objective evidence; behaving in a way that is justifiable; and understanding your own value as well as the value that other parties bring to the table. It means considering the relationship over time, not just how much you can squeeze out of the immediate transaction.
It is quite straightforward, really. A fair employer negotiates a pay package with his or her employees according to a set scale or their personal contribution to the company. A fair business partner seeks a deal that balances risk and creates reasonable (not necessarily equal) profit for both sides. A fair negotiator listens, explains, and responds insofar as possible to the concerns of the other side. And the result is an agreement that not only looks good on paper but keeps looking good in practice.