What is the difference between Honesty and Disclosure? And, what is my advice related to them? This is a question I am often asked by clients.
In my last blog entry, I discussed the pros and cons of disclosure, and strategies for managing the risks while increasing the returns. Connected to this point, many people have questions about how "honest" to be in negotiation. Here are my thoughts:
HONESTY IS NOT THE SAME AS FULL DISCLOSURE. This is the first important point to make here. Let's begin with some DEFINITIONS: HONESTY: Telling the truth; not misrepresenting the facts when asked about something. FULL DISCLOSURE: Disclosing everything there is to say about a certain subject, or your views, etc.
How much disclosure is appropriate?
This is a relative question. More disclosure is generally encouraged (especially in ongoing relationships), and, sometimes the line between the two can get very narrow in terms of its potential impact on trust, and therefore on your ability to produce good outcomes with each other. For me, there are two key questions to consider in deciding whether or not to disclose something:
- Could there be a negative impact on this person in the negotiation if I do not disclose it, and;
- Do I think the absence of the information would have a material impact on the person's choice.
If the answer to either one of these questions is "yes", then I think it is in your interest to disclose the information. Even if the moral argument for doing so is not compelling to you, I think it is worth your while even from a selfish perspective. Why? Because in many cases, the person will discover the information later. And, if either of the above conditions existed, your credibility and trustworthiness will be damaged, and thus, your ability to negotiate with them and produce good agreements, not to mention your very ability to be persuasive.
How honest should I be? Is telling the truth always a good idea?
Regarding Honesty: I recommend it strongly. Lying tends to come back to haunt you, and then carries a high cost. What you lose is (a) your ability to persuade – your credibility; and (b) your ability to produce ANY agreement is significantly reduced. Is telling the truth always a good idea? No, it isn't necessarily, because sometimes the truth can be hurtful to the other party, or can expose you to considerable risk. In that case, I recommend choosing not to disclose, rather than lying outright. It is better to say, "I am not comfortable disclosing that information", than to tell a lie.
Feel free to chime in with a comment if you'd like. Feedback is very helpful.