Guy Hands’ View

17 November 2016

Compromise is Not a Dirty Word. Donald Trump and the UK Government Must Recognise This.

With the election of Donald Trump to the White House, we have now experienced political earthquakes on both sides of the Atlantic. Trump’s triumph and the UK’s Brexit vote confirm we have moved into a new and much more uncertain political era.

Millions of words have now been written in the UK, in America and in Europe, which is buffeted by the same forces, of how the established parties must respond to this populist outcry. But there are also lessons – including, I believe, from business – for those who have ridden these same forces to power.

There are, of course, many differences between politics and business. But in my experience, politicians and those successful in business and deal-making share many characteristics, including a strong – at times almost unshakeable – belief in themselves and their views. It is a powerful driver of their success. But the danger is that it can fuel a winner-takes-all attitude.

It was an approach which was very common in the Anglo-Saxon world in the 1980s when I cut my teeth as a trader at Goldman Sachs. Winning the battle was what mattered. The interests of those on the losing side were often simply dismissed.

But when I moved to Nomura, the Japanese bank, I found a very different culture and approach. Riding rough-shod over those on the other side of the table was seen as bad business. Far more was to be gained in the long-term by compromise and respect.

It is a lesson that has served me well. I have come to realise that it is often better to back off, even when in a position of strength, and be ready to listen and negotiate. Compromise can build something more long-term, get everyone working together and put relationships on a stronger footing for the future.

It does not always work out that way. I have also been involved in deals where neither side will concede an inch. But while you might be proved right and get your way, all too often the result of such a dogmatic approach is, in the long term, negative for everyone.

What is true in deal-making is even truer when it comes to running a business. And in politics, where you don’t have all the levers to command, and you need to bring people together, it is vital.

This is not to question, as some disappointed Remain supporters and Clinton supporters continue to do, the result at the ballot box. Those who campaigned for Britain to leave the European Union succeeded in the referendum just as Mr Trump has pulled off a stunning victory under the US electoral system.  These democratic decisions must be accepted.

But the victors in both cases also need to remember the large number of people who did not support them. By being magnanimous and conciliatory, by showing respect, they will achieve more and achieve it quicker. They also reduce the risk of seeing all their hard work undone in the future.

Perhaps it is Mr Trump’s experience as a businessman which explains why there are signs that he understands this. In his acceptance speech, early interviews and policy hints, he has struck a tone very different from his confrontational campaign which so alarmed America’s partners and widened the already-huge rifts in the US. It won’t be easy to heal such a disunited country or rein back his supporters, but if the new President, and indeed the United States, are to be successful, he must try.

My own experience of Mr Trump, who I met along with his eldest son and daughter on a development deal, suggests he will. Though in the end we never did business together, I found him, whilst a larger than life character, also a pragmatist. He expressed himself very strongly but he also listened and was prepared to change his views if needed.

There is less sign of such pragmatism from the UK government where the 48 per cent who wanted Britain to remain in the EU find their views dismissed. This is a mistake, as many of the concerns they raised were legitimate, and any successful post-Brexit deal needs to address them in the long-term interests of the country and future prosperity. Instead, senior judges find themselves under sustained attack for simply interpreting the law, with little support from ministers.

On both sides of the Atlantic, there is a desperate need to bring people together and replace confrontation with conciliation. With so many huge domestic and international challenges facing both the US and the UK, we need to hope our leaders recognise that respect and compromise are not dirty words. It is something that President-elect Trump has had to accept in order to succeed in business over the past 50 years.

This article appeared in City A.M. on 15 November 2016.

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