The Law
Not every breakthrough in a negotiation comes from pressure. Sometimes it comes from an unexpected gesture.
Robert Greene’s twelfth law is one of his most manipulative. Use selective honesty and generosity to disarm your victim. Offer one sincere gesture, then use the trust it creates to gain advantage. Taken literally into M&A, that reading is unethical and fragile. Counterparties remember. Founders remember. Employees remember. Clients remember. A gesture used as a trap usually destroys the very trust it was meant to create.
The professional version keeps the mechanism and changes the intent. Trust can be unlocked by a voluntary act. A seller sharing difficult information before being forced to. A buyer preserving a founder’s legacy. A leader admitting uncertainty rather than hiding behind certainty. A bidder making a fair concession because the relationship matters beyond the last euro of value.
In M&A, trust is expensive to build and easy to destroy. Yet occasionally a small act of good faith changes the entire tone of a transaction because it tells the other side something a contract cannot: we are not here only to extract. We are here to align.
Manipulation seeks advantage. Stewardship seeks alignment.
Law 11 was about becoming indispensable through contribution. Law 12 is about building trust through conduct. The lesson is not to be naïve. The lesson is that fairness, used deliberately and authentically, can become a source of leverage because it lowers the emotional cost of cooperation.
The M&A Translation
The M&A translation of Law 12 is this: disarm with good faith, not with manipulation.
Most people believe M&A runs on contracts, financial models and negotiating leverage. Those matter. But experienced dealmakers know that some negotiations unlock only when one side voluntarily moves first. A difficult disclosure. A transition commitment. A retention arrangement. A fair process point. A name preserved. A founder reassured. A concession that was not legally required but was strategically wise.
Those gestures work because they answer a question the model cannot answer: can we trust the way this party behaves when it has room to choose?
Good faith is not softness. It is disciplined fairness used where trust has economic value. It does not mean giving away value carelessly, ignoring legal protection or avoiding hard negotiation. It means recognising that some value is created not by squeezing the other side, but by making future cooperation more likely.
A good-faith gesture is powerful only when it is voluntary, visible and connected to what the other side genuinely values.
Where This Shows Up in a Deal
Law 12 appears wherever legal obligations are not enough to create trust.
It appears in late-stage diligence, when the seller discovers a risk and has to decide whether to disclose it before being cornered. It appears in founder-led acquisitions, when the buyer has to show that legacy, identity and culture will not be casually erased. It appears in employee retention, when people need proof that leadership sees them as more than cost lines.
It appears in regulated sectors, where customers, regulators and public stakeholders need reassurance that continuity and fairness will be preserved. It appears in carve-outs, where the seller can make the transition easier or harder depending on how responsibly it supports the buyer after signing. It appears in advisory relationships, where a professional builds long-term trust by telling the difficult truth before being forced to.
In each setting, the question is not only what is required. The question is what good faith would add beyond the minimum.
The Deal Power Map
For Law 12, the power map is a good-faith map. The question is not only who has leverage. It is where trust is fragile, who needs reassurance and what voluntary act could change the tone of the deal.
Five Questions to Map Good-Faith Leverage
Before deciding whether to press for more or offer something voluntarily, map where trust has economic value.
- 1Where is trust fragile?
Look at late diligence issues, founder legacy, employee retention, customer continuity, regulator concern, transition services, cultural identity or post-close cooperation.
- 2Who needs reassurance?
The party needing reassurance may be the founder, seller, buyer, employees, management team, customers, regulators, lenders or integration leads.
- 3What is legally required?
Name the minimum obligation clearly: disclosure, contractual protection, remedy, warranty, transition support, consultation or formal communication.
- 4What would good faith add beyond the minimum?
Good faith may add early disclosure, fuller context, a fair concession, name preservation, transition help, retention support, symbolic fairness or proactive reassurance.
- 5Will the gesture build trust or only create theatre?
A good-faith act must be real enough to matter. If it is only decorative, the other side will eventually read it as manipulation.
Cases from the Deal Floor
These cases show good faith as strategy: respect shown voluntarily, value protected on the other side and fairness made visible enough to change behaviour.
Merck–Schering-Plough2009
Schering-Plough leadership and employees feared losing their identity.
Merck could have treated Schering-Plough as a straightforward absorption. It had the scale, the transaction structure and the authority to impose a conventional integration logic. But acquisitions involving established pharmaceutical organisations carry more than assets and pipelines. They carry identity, relationships and pride.
Merck’s approach placed emphasis on integration rather than conquest. Where identity mattered, it was respected. Where existing relationships needed continuity, the transition was handled with sensitivity. The buyer did not need to preserve everything to show respect. It needed to show that it understood what should not be casually erased.
That matters because employees can distinguish between integration and humiliation. A deal can ask people to change while still recognising the value of what they built before the buyer arrived.
Respect shown voluntarily, before anyone demands it, accelerates acceptance.
Respect shown voluntarily often accelerates acceptance.
Google–YouTube2006
Google could have absorbed YouTube completely.
When Google acquired YouTube, the simple corporate move would have been to fold the platform deeply into Google and make the parent brand dominant. Google did the opposite. YouTube kept its identity, brand and product energy.
This was not sentimental. It was strategic good faith. Google recognised that the value of YouTube sat not only in technology or traffic, but in community, creator behaviour, product identity and the trust users placed in the platform as its own thing.
By protecting what the other side valued most, Google sent a signal to founders, employees and users that the acquisition was not an erasure. That trust gave the platform room to keep growing inside a much larger owner.
Generosity toward what people value most is rarely forgotten.
Generosity toward what people value most builds trust.
IBM–Lenovo2005
IBM transferred not just assets, but the means to succeed with them.
When IBM sold its PC business to Lenovo, it did not simply hand over a bare collection of assets and walk away. The transaction included brand usage rights, support mechanisms and transition arrangements that helped the buyer inherit confidence as well as capability.
That matters because sellers often underestimate how much their legacy depends on the buyer succeeding after close. A disorderly handover can damage customers, employees and the memory of the business the seller built. A thoughtful transition protects both sides.
IBM’s approach gave Lenovo a stronger platform from which to operate and reduced uncertainty around the transfer. Helping the other side succeed was not charity. It was stewardship of the value being transferred.
Good faith in a carve-out or divestiture often means giving the buyer enough support to make the asset work after it leaves your hands.
Helping the other side succeed can protect your own legacy.
SAP–Qualtrics2018
SAP allowed Qualtrics to keep its entrepreneurial culture and leadership autonomy.
A large enterprise software company acquiring a fast-moving company can easily smother the very energy it paid for. The temptation is control: integrate systems, impose reporting, centralise decisions and make the target fit the parent.
SAP’s treatment of Qualtrics reflected a different posture. By allowing meaningful leadership autonomy and protecting the entrepreneurial culture, SAP showed that preservation was part of the value thesis, not a temporary concession.
Employees in acquired companies watch for this very closely. They do not only listen to what the buyer says. They study what the buyer interferes with. Respect becomes visible through the areas leadership chooses not to over-control.
Preservation, offered deliberately, is itself a form of generosity.
Preservation can be a form of generosity.
CVS–Aetna2018
CVS invested heavily in communicating healthcare continuity.
Healthcare combinations create a special kind of anxiety. Customers, providers, regulators and communities worry not only about economics, but about continuity of care, access and whether the deal will make a personal service feel less reliable.
CVS understood that reassurance could not wait until concerns had hardened. The company made visible efforts to explain continuity, strategic rationale and stakeholder benefit. The communication did not remove every concern, but it treated those concerns as legitimate rather than peripheral.
That is a good-faith act in itself. When a deal affects people’s access to essential services, proactive reassurance is not public relations alone. It is part of responsible transaction stewardship.
Trust often has to be offered first, through clear and proactive reassurance, rather than demanded later.
Trust often requires proactive reassurance.
PSA–Fiat Chrysler2021
Leadership roles were balanced and governance reflected genuine compromise.
The formation of Stellantis required more than financial combination. PSA and Fiat Chrysler each brought history, geography, brands, unions, national identity and internal pride. A structure that made one side look conquered would have created resistance before the new company even began operating.
The governance and leadership design gave both sides visible representation. That symbolic fairness mattered because people inside both organisations needed to see themselves in the future company.
Symbolic fairness is easy to dismiss as cosmetic, but in mergers it often carries real operational weight. People cooperate more readily when they believe the new structure recognises their dignity.
In integrations of equals, perceived fairness can be as important as economic fairness.
Symbolic fairness matters as much as economic fairness.
The Due Diligence Surprise
Late-stage diligence. The seller discovers a customer-concentration risk. The buyer has not asked about it, and disclosure is not immediately required.
Two paths open. Path A is to say nothing and hope the issue stays buried until the legal obligation becomes unavoidable. It preserves short-term negotiating comfort, but it creates a future trust problem. If the buyer discovers the issue later, every other disclosure becomes suspect.
Path B is to disclose proactively. The seller explains the issue, shares the mitigation plan and accepts the short-term discomfort. The buyer may still ask for protection, adjust terms or require more diligence. But the tone of the conversation changes because the seller has demonstrated good faith before being forced to.
The seller has not become weak. The seller has become credible. The buyer now has a reason to believe that the uncomfortable facts will not be hidden until the last possible moment.
The willingness to be transparent before obligation exists often defines the quality of the relationship that follows.
The willingness to be transparent before obligation exists often defines the quality of the relationship that follows.
The Pattern Behind the Cases
Across these cases, good faith works when it is visible, voluntary and connected to what the other side genuinely values.
Google protected YouTube’s identity. IBM supported Lenovo’s transition. SAP preserved Qualtrics’ entrepreneurial energy. PSA and Fiat Chrysler made symbolic fairness visible in governance. The due diligence surprise shows how early disclosure can change the quality of a negotiation before the legal obligation arrives.
None of these gestures required the parties to abandon commercial discipline. They did not stop negotiating. They did not ignore economics. They did not remove legal protections. They simply recognised that trust was part of the value equation.
The pattern is clear. The best dealmakers do not give away value randomly. They place good-faith gestures where the relationship, integration or future cooperation needs them most.
Good faith is most powerful when it protects what the other side fears losing.
Four Diagnostic Questions
Before treating a negotiation as pure concession extraction, ask four questions.
The Four Questions That Protect Good Faith
These questions help separate disciplined fairness from naivety.
- 11. Where could one act of good faith change the tone of this deal?
Look for the moment where trust is blocked by fear, legacy, identity, disclosure, continuity or perceived unfairness.
- 22. Am I trying to win every concession, or build future value?
The last concession extracted can be expensive if it damages the relationship needed to deliver the deal after close.
- 33. What difficult truth could I share before I am obligated to?
Voluntary disclosure is one of the strongest trust signals because it shows how you behave when you still have choice.
- 44. Am I treating this as a transaction that closes once, or a relationship that opens many doors?
Some deals end at signing. The best relationships create future transactions, referrals, cooperation and reputation value.
The Four Acts of Good Faith
Good faith is not naivety. It is a deliberate practice built from four acts that answer one question: how do you build trust without being taken advantage of?
- 1Transparency
Share difficult truths early, before you are forced to. Voluntary disclosure is the strongest trust signal there is.
- 2Respect
Protect what the other side values, whether that is a name, a culture, a founder legacy, a team identity or a customer relationship.
- 3Fairness
Resist the urge to win every concession. The last point extracted often costs more than it is worth.
- 4Stewardship
Think beyond closing day. The deal closes once; the relationship can keep paying out for years.
How to Apply This at Your Level
Role Lens: Senior, Mid-Level and Junior
If you are a CEO, founder, partner, managing director, board member or investor, people judge fairness by your actions, not your speeches. The concessions you choose to make, especially the ones you did not have to, shape post-deal commitment more than any town hall. Decide deliberately what good faith you will extend.
At every level, Law 12 asks for the same discipline: be commercially sharp without becoming relationally careless.
The Trap
The trap of Law 12 is mistaking good faith for weakness.
Some professionals hear the word generosity and immediately think of lost leverage. They assume good faith means giving away economics, trusting blindly, avoiding hard negotiation or making concessions without protection. That is not good faith. That is poor deal discipline.
Good faith does not mean you stop negotiating. It does not mean you ignore risk. It does not mean you abandon legal protections. It does not mean you disclose carelessly or concede whenever the other side applies pressure.
Good faith means you act fairly where fairness creates value. You disclose the issue before it becomes a breach of trust. You preserve the name when identity matters. You support the transition when failure would damage both sides. You make the concession that preserves the relationship when the incremental economic win is not worth the long-term cost.
The mature version of Law 12 is disciplined generosity. It is not softness. It is fairness deployed where trust has economic consequences.
Good faith is not the opposite of leverage. Used well, it is a form of leverage.
The Paradox at the End of Law 12
The paradox of Law 12 is that the side determined to maximise every advantage often wins the negotiation and loses the relationship.
This happens because not every cost appears in the purchase agreement. A seller who feels exploited may comply with the contract but give no more than required. A founder who feels disrespected may stay through the earn-out but stop building with conviction. Employees who feel ignored may remain on payroll but withdraw discretionary effort. A counterparty who feels trapped may never return with another opportunity.
The side willing to show selective generosity often builds trust that creates greater value later. A fair concession can reduce post-close resistance. Early transparency can prevent future disputes. Respect for identity can protect the asset being bought. Stewardship can turn a one-time deal into a long-term reputation advantage.
The most memorable moments in transactions are rarely written into the purchase agreement. They happen in the spaces between the clauses. When someone discloses a difficult truth before being forced to. When a buyer protects a founder’s legacy. When leaders choose fairness over opportunism. These gestures are often small, yet they reveal character, and character shapes trust.
The irony is that generosity is often mistaken for weakness, when the strongest dealmakers know that trust built voluntarily is one of the few advantages that compounds across a career.
Contracts establish obligations. Goodwill determines whether people go beyond them.
Disarm with Good Faith
In M&A, small acts of good faith often unlock negotiations that logic alone cannot. Trust is expensive to build, easy to destroy, and one of the few advantages that compounds.
Because in the end, people rarely remember who won every concession. They remember who negotiated in good faith.
Before your next meeting on a live deal, ask yourself:
- 1.Where could one act of good faith, beyond what is required, change the entire tone of this deal?
- 2.Am I trying to win every concession, or build a relationship that creates future value?
- 3.What difficult truth could I share before I am obligated to?
- 4.Am I treating this as a transaction that closes once, or a relationship that opens many doors?