Principled Negotiation

Principled Negotiation is a problem-solving approach that seeks fair agreements while protecting participants from those who might take advantage of trust. Developed at the Harvard Negotiation Project, this method focuses on deciding issues based on merits rather than through positional bargaining. It enables negotiators to be both fair and effective by separating people from problems, focusing on interests over positions, generating options for mutual gain, and insisting on objective criteria.

Historical Development

Principled Negotiation was formally introduced by Roger Fisher and William Ury in their groundbreaking 1981 book "Getting to Yes: Negotiating Agreement Without Giving In." The approach emerged from the Harvard Negotiation Project, which was established in 1979 to improve the theory and practice of conflict resolution and negotiation.

The method was developed in response to the limitations of traditional positional bargaining, which often led to inefficient agreements, damaged relationships, and stalemates. Fisher and Ury sought to create an alternative that would produce wise agreements while maintaining positive relationships between negotiating parties.

Since its introduction, Principled Negotiation has been refined through subsequent works, including "Getting Past No" by William Ury (1991) and "Difficult Conversations" by Douglas Stone, Bruce Patton, and Sheila Heen (1999). The approach has been widely adopted in business, diplomacy, law, and conflict resolution.

The Four Core Principles

Principled Negotiation is built on four fundamental elements:

1. Separate the People from the Problem

This principle recognizes that negotiators are people with emotions, values, backgrounds, and viewpoints. By disentangling relationship issues from substantive problems, negotiators can:

• Address emotions directly without letting them drive decisions
• Improve communication through active listening and acknowledgment
• Build working relationships based on trust and understanding
• Deal with the problem, not the personalities

2. Focus on Interests, Not Positions

Positions are the concrete things negotiators say they want, while interests are the underlying motivations, concerns, and needs that drive those positions. This principle encourages:

• Asking "why?" to uncover the interests behind stated positions
• Recognizing that each side has multiple interests, not just opposing ones
• Acknowledging interests as legitimate, even when disagreeing with positions
• Looking for shared and compatible interests as foundations for agreement

3. Invent Options for Mutual Gain

This principle addresses the challenge of creating value in negotiations through creative problem-solving. It involves:

• Separating invention from evaluation to encourage creativity
• Broadening options rather than looking for a single answer
• Identifying shared interests and dovetailing different interests
• Making decisions easy for the other party by addressing their concerns

4. Insist on Using Objective Criteria

This principle focuses on basing agreements on fair standards independent of either party's will. It includes:

• Framing issues as a joint search for objective criteria
• Using standards like market value, expert opinion, custom, or law
• Reasoning and remaining open to reason about which standards apply
• Never yielding to pressure, only to principle

The Concept of BATNA

A crucial element of Principled Negotiation is the concept of BATNA (Best Alternative To a Negotiated Agreement). Understanding your BATNA:

• Provides a standard against which any proposed agreement should be measured
• Determines your reservation value—the worst acceptable deal
• Gives you confidence to walk away from unfavorable proposals
• Shifts focus from what happens if you agree to what happens if you don't

Fisher and Ury emphasize that developing your BATNA is more important than identifying your bottom line, as it provides a more dynamic and realistic measure of negotiating power.

Implementation Process

1. Preparation: Identify interests, develop your BATNA, research objective criteria
2. Relationship building: Establish rapport and separate people from the problem
3. Interest exploration: Uncover underlying interests through questioning and listening
4. Option generation: Brainstorm possibilities without immediate evaluation
5. Criteria development: Identify and agree on objective standards for evaluation
6. Proposal evaluation: Assess options against interests and objective criteria
7. Agreement crafting: Develop solutions that satisfy key interests and meet fair standards
8. Implementation planning: Create clear procedures for carrying out the agreement

Business Applications

Principled Negotiation is particularly valuable in:

• Contract negotiations: Creating sustainable agreements with suppliers and customers
• Dispute resolution: Addressing conflicts without damaging important relationships
• Strategic partnerships: Developing alliances that serve all parties' interests
• Employment negotiations: Designing compensation and role packages
• Cross-cultural business: Navigating different negotiation norms and expectations
• Internal decision-making: Resolving competing priorities within organizations
• Change management: Gaining buy-in for organizational transformations

Case Examples

Example 1: Software Contract Negotiation

A software vendor and enterprise client apply principled negotiation by:

• Separating relationship issues from contract terms
• Exploring interests beyond price (implementation timeline, training needs, customization)
• Creating options like phased implementation, performance-based pricing, and extended support
• Using industry benchmarks and third-party evaluations as objective criteria
• Developing a joint implementation committee to address future issues

Example 2: Joint Venture Formation

Two companies forming a joint venture use principled negotiation by:

• Acknowledging concerns about control and intellectual property protection
• Identifying shared interests in market expansion and cost sharing
• Generating multiple governance models with different decision rights
• Using industry standards for valuing contributions and distributing returns
• Creating contingent agreements for different performance scenarios
• Establishing clear dispute resolution mechanisms

Challenges and Limitations

While powerful, Principled Negotiation faces several challenges:

• Power imbalances: When one party has significantly more leverage
• Bad faith actors: When counterparts use deceptive or manipulative tactics
• Cultural differences: When negotiation norms vary across cultures
• Emotional intensity: When strong feelings override rational approaches
• Time pressure: When urgent decisions limit thorough exploration
• Complexity: When multiple parties and issues create coordination challenges
• Implementation: When agreements face practical execution difficulties

Addressing Difficult Situations

Fisher and Ury propose several strategies for challenging scenarios:

• When they're more powerful: Focus on developing your BATNA
• When they won't play: Use negotiation jujitsu—redirect competitive energy
• When they use dirty tricks: Name and negotiate about the tactic itself
• When emotions run high: Acknowledge feelings and separate venting from problem-solving
• When communication breaks down: Use active listening and reframing