{"id":73361,"date":"2022-07-17T12:35:00","date_gmt":"2022-07-17T16:35:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=73361"},"modified":"2022-07-28T13:35:12","modified_gmt":"2022-07-28T17:35:12","slug":"handshake-deals","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/handshake-deals\/","title":{"rendered":"Handshake Deals: Are They Realistic or Risky?"},"content":{"rendered":"\n<p>What is the meaning of a handshake deal? Are handshake deals a realistic way to conduct business, or are they too risky? <\/p>\n\n\n\n<p>Author and former CEO Stephen Covey wrote <em>The Speed of Trust<\/em> to illustrate the importance of building high-trust relationships in business and in your personal life. Covey&#8217;s great depth of experience lends credibility to his argument for trusting and using handshake deals in business. <\/p>\n\n\n\n<p>Read on to learn why Covey says handshake deals can be less risky than convoluted contracts.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Importance of Trust in Business<\/strong><\/h2>\n\n\n\n<p>Trust is a critical yet undervalued prerequisite for success in the modern world. Trust deepens relationships, creates opportunities, and improves the efficiency of interpersonal interactions. In <em>The Speed of Trust<\/em>, Stephen M.R. Covey argues that you\u2019ll be more successful in your personal and professional life when you make trust a top priority.<\/p>\n\n\n\n<p><a href=\"https:\/\/twitter.com\/StephenMRCovey\">Covey<\/a> is an expert on trust. He co-founded the <a href=\"https:\/\/www.speedoftrust.com\/\">FranklinCovey Global Speed of Trust Practice and CoveyLink<\/a>, which offers educational materials, training, and public speaking events to individuals and organizations looking to maximize their performance by building and leveraging trust. Before co-founding these businesses, Covey was the successful CEO of <a href=\"https:\/\/huntsman.usu.edu\/leadership\/index\">The Stephen R. Covey Leadership Center<\/a> at Utah State University.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-efficiency-of-handshake-deals\"><strong>The Efficiency of Handshake Deals&nbsp;<\/strong><\/h3>\n\n\n\n<p><strong>Trust helps you achieve outcomes more efficiently<\/strong>, hence the title <em>The <\/em><em>Speed<\/em><em> of Trust<\/em>. For example, say you are hiring a new babysitter. When she arrives, you spend 30 minutes going over rules, safety protocols, routines, and so on because you don\u2019t yet trust her to know how to care for your kids properly. Once she becomes a regular babysitter, you\u2019ll greet her at the door, tell everyone to have a great time, and leave. The trust you\u2019ve developed with the babysitter increases the efficiency of the exchange.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>\u201cHandshake Deals\u201d Encourage Trust and Efficiency<\/strong><br><br>As an example of the efficiency of trust, Covey recounts a $23 billion business transaction between Warren Buffet and Walmart that was resolved in the span of one meeting and a handshake. Because the companies trusted each other, a deal that could have taken months and millions of dollars took only two hours.&nbsp;<br><br>\u201cHandshake deals\u201d like the one described above may sound risky to many of us, but incomplete contracts like a handshake <a href=\"https:\/\/hbr.org\/2011\/03\/column-in-praise-of-the-handshake\">can be <em>less <\/em>risky than detailed and lengthy complete contracts<\/a>. Covey and the Harvard Business Review note that complete contracts are often long and elaborate to eliminate confusion and situations where either party could take advantage of the other. But even the most detailed contract can\u2019t cover every scenario. The impersonal nature of complete contracts can set a tone of mistrust, where both parties look for loopholes or omissions to take advantage of the other.&nbsp;<br><br>In contrast with complete contracts, handshake deals imply trust between parties and set the expectation that everyone will act with goodwill and respect. This expectation of honorable behavior can be an effective <a href=\"https:\/\/www.shortform.com\/blog\/what-is-incentive-meaning-and-definition-economics\/\">incentive<\/a> to uphold the spirit of a handshake and eliminate the need for a contract covering every possible scenario.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>What is the meaning of a handshake deal? Are handshake deals a realistic way to conduct business, or are they too risky? Author and former CEO Stephen Covey wrote The Speed of Trust to illustrate the importance of building high-trust relationships in business and in your personal life. Covey&#8217;s great depth of experience lends credibility to his argument for trusting and using handshake deals in business. Read on to learn why Covey says handshake deals can be less risky than convoluted contracts.<\/p>\n","protected":false},"author":19,"featured_media":73409,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,34,30],"tags":[696],"class_list":["post-73361","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-communication","category-work","tag-the-speed-of-trust","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Handshake Deals: Are They Realistic or Risky? - Shortform Books<\/title>\n<meta name=\"description\" content=\"What is a handshake deal in business? Should you trust a handshake deal, or is it too risky? 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Learn why Covey believes they&#039;re more efficient.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shortform.com\/blog\/handshake-deals\/\" \/>\n<meta property=\"og:site_name\" content=\"Shortform Books\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-17T16:35:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-28T17:35:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/s3.amazonaws.com\/wordpress.shortform.com\/blog\/wp-content\/uploads\/2022\/07\/handshake-deal-business.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1748\" \/>\n\t<meta property=\"og:image:height\" content=\"1174\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Emily Kitazawa\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Emily Kitazawa\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/\"},\"author\":{\"name\":\"Emily Kitazawa\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/e094024454c7d3334a149c0cf039bdeb\"},\"headline\":\"Handshake Deals: Are They Realistic or Risky?\",\"datePublished\":\"2022-07-17T16:35:00+00:00\",\"dateModified\":\"2022-07-28T17:35:12+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/\"},\"wordCount\":514,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2022\/07\/handshake-deal-business.jpg\",\"keywords\":[\"The Speed of Trust\"],\"articleSection\":[\"Business\",\"Communication\",\"Work\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.shortform.com\/blog\/handshake-deals\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/\",\"name\":\"Handshake Deals: Are They Realistic or Risky? - Shortform Books\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/handshake-deals\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2022\/07\/handshake-deal-business.jpg\",\"datePublished\":\"2022-07-17T16:35:00+00:00\",\"dateModified\":\"2022-07-28T17:35:12+00:00\",\"description\":\"What is a handshake deal in business? 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