Principled Negotiation: How To Find Common Ground Without Compromising
Show me a disagreement, and I’ll show you a negotiation.
Negotiation happens every day. You see this in corporate boardrooms where you have lawyers trying to settle a complex claim. But negotiation also takes place whenever you decide with your friends where you should go for dinner. Or which movie you should catch.
As Roger Fisher and William Ury tell us in Getting to Yes:
“Like it or not, you are a negotiator. Negotiation is a fact of life.”
We typically see negotiations as a formal process where people on different sides fight to get what they want. In our minds, negotiation is adversarial. That’s why we don’t view minor disagreements with friends and family as negotiations even though we are essentially trying to get them to adopt our view and the option we propose. We don’t want anyone to get hurt.
It doesn’t have to be this way.
As co-founders of the Harvard Negotiation Project, Fisher and Ury have studied conflict resolution and negotiation since 1977. Through their years, they’ve developed an approach known as principled negotiation.
No tricks, no intimidation, and no bad faith. Now you get to resolve a dispute while maintaining your relationships.
Let’s see what we can learn.
1. Separate The People From The Problem
The first thing to realise is that we never really deal with a problem in a vacuum during negotiations.
Every negotiator is a person first. That means that whenever we sit at the negotiating table, we don’t come alone. We bring our emotions, values, and cognitive biases with us. It’s easy to forget that in daily life, much less in a high-pressure situation where everyone’s on the edge.
As Fisher and Ury tell us, there are two kinds of interests at play in every negotiation: the substance and the relationship. Those who fail to recognise this often end up with failed negotiations because they allow the relationship to become entangled with the problem.
It’s tempting to hold the other side responsible for your problem. Maybe it’s even justified. But as most of us have experienced, pointing fingers only puts people on the defensive. People cease to listen and sometimes strike back with an accusation of their own. The blame game is how the person gets entangled with the problem.
What can we do then? Separating the people from the problem begins by listening to the other side and acknowledging their concerns. It doesn’t mean you have to agree with what the other side thinks. What it does mean is that there is a common ground to build consensus on. When that happens, both sides can come together to collaborate and stop being adversaries.
Be hard on the problem, soft on the person.
2. Think Interests, Not Positions
Imagine you’re a parent. You walk into a room only to find your son and your daughter fighting over an orange. What’s the best way to resolve this dispute?
The easiest way appears to be splitting the orange into halves. Some might think of this as a teachable moment and take the orange away so the kids might learn how to cooperate. Both methods seem like good ideas.
But here’s the twist in the story – both children can have their needs met if only the parent knew why they were asking for the orange. The son wants the orange for the flesh, but the daughter wants the orange only for its peel as an ingredient for a recipe. Both sides would have had their needs met if they knew why each wanted the orange.
This is why we should focus on interests, and not positions. Here’s what Fisher and Ury have to say in Getting to Yes:
“Interests define the problem. The basic problem in a negotiation lies not in conflicting positions, but in the conflict between each side’s needs, desires, concerns and fears.”
They go on to explain the difference between the two:
“Interests motivate people; they are the silent movers behind the hubbub of positions. Your position is something you have decided upon. Your interests are what caused you to so decide.”
The impact of this is that not every person who takes an opposing position wants an outcome that conflicts with our own goals. Sure, sometimes there are conflicting interests, but there are also shared and compatible ones. It’s your job as a negotiator to make sure you know what these interests are. Of course, it’s not always possible to do that, but it’s safe to start with our basic human needs when considering interests. For instance:
- Financial security
- A sense of belonging
Besides finding out what your counterpart might be interested in, you’ll also want to make sure that he’s aware of your interests. After all, the purpose of negotiating is to meet your interests. The other side can’t do that if you don’t make your interests come alive.
3. Bigger Pie, Not Bigger Slice
We naturally assume that there is a fixed pie in most situations. One slice for you is one less slice for me. It’s unsurprising then that negotiations are often adversarial with each trying to outdo the other.
Yet as Fisher and Ury tell us, this is rarely true. Here’s a quick example:
“First of all, both sides can always be worse off than they are now. Chess looks like a zero-sum game; if one loses, the other wins - until a dog trots by and knocks over the table, spills the beer, and leaves you both worse off than before.”
The idea is that there are always shared interests that lie latent in every negotiation. It’s just that such interests are not explicit and often taken for granted, as though it doesn’t matter. Yet when shared interests are stressed, negotiation often becomes smoother and more amicable because people realise that they are all on the same side.
Admittedly, there will be differences as well, but that doesn’t mean we’ve reached a dead end. The mix of shared and differing interests are the enabling factors behind a fruitful negotiation. Here’re Fisher and Ury again:
“Agreement is often based on disagreement. […] A satisfactory agreement is made possible because each side wants different things. People generally assume that differences between two parties create the solution. Yet differences can also lead to a solution.”
The effectiveness of a solution is limited only by one’s creativity. Fisher and Ury suggest that the first step is to broaden your options and consider any method that may possibly meet both parties’ interests. At this point, all ideas are equally valid.
Deciding comes at the next stage.
4. Use Objective Criteria
It’s not hard to imagine a scenario where two people sit across a table and one person says, “this is what I can offer, take it or leave it”.
This is typical of positional bargaining, where one side makes a demand that has a degree of finality in it. The hope is that one’s force of personality and bargaining power compels the other side to give in to this demand. But as you can imagine, that often doesn’t work out well.
Nobody likes being threatened or forced to accept a concession. In positional bargaining, the negotiation process comes down to a battle of wills. It’s a battle of who blinks first and who can afford to walk away. It may work for short-term transactions, but not for long-term ones because the relationship is strained regardless of what agreement you’ve reached.
What then, can we do? From Getting To Yes:
“If trying to settle differences of interest on the basis of will has such high costs, the solution is to negotiate on some basis independent of the will of either side - that is, on the basis of objective criteria.”
No amount of “win-win” talk can change the fact that a landlord always wants a higher rent while the tenant wants a lower rent. That is the reality of how interests would often differ. But if you’ve done your job right, it’s likely that both you and your counterpart would be willing to jointly search for a fair result that meets both your needs.
Such criteria would differ from situation to situation, but there are three points worth remembering:
- Agree first on principles – decide which standards are applicable and relevant for the purposes of evaluation.
- Reason and be open to reason – one standard of legitimacy does not necessarily preclude the existence of others; you have to reason and determine which is the fairer standard to be applied. Just as how the substantive issue should not be settled on the basis of will, neither should the question of which standard should be used.
- Never yield to pressure – commit to negotiating on the basis of principle alone; this makes it easier for you to resist making an arbitrary concession.
Of course, this is easier said than done. There are some situations where the power dynamics make it infinitely difficult to negotiate solely on principle.
Which brings us to our last point.
5. What Happens If You Walk Away?
People enter negotiations because there is something to be gained from the other side. If that wasn’t the case, you’d be better off not negotiating, much less coming to an agreement that hurts your interests.
This is why it’s important to understand a concept Fisher and Ury call your Best Alternative To A Negotiated Agreement (BATNA). Your BATNA is what you’d be left with if you don’t reach an agreement. It’s the standard against which any proposed agreement should be measured.
Negotiating your salary during a job interview? It doesn’t matter that your prospective employer doesn’t give you what you want because you have two other offers waiting for you. But if you’re walking in empty-handed, you’d probably be willing to take a lower offer.
Having a strong BATNA gives you greater negotiating power. This is the work that must be done before the negotiation even begins. Your job during the negotiation is to uncover the other side’s BATNA. Knowing their alternatives, you can realistically estimate what you can expect from the negotiation.
That’s not to say that you shouldn’t always disclose your BATNA. Sure, if your BATNA is weaker than what the other side thinks, disclosing this will only weaken your hand. But if you have one that is stronger than what the other side has contemplated, you’ll be better off letting them know. The fact that you’re operating with imperfect information may sometimes mean that you don’t get the best possible offer, but it’s important to remember that you would have succeeded if you got a better offer than your BATNA.
And if both sides have extremely attractive BATNAs? The best outcome may well be not to reach an agreement. In such cases, a successful negotiation would be one in which the relationship is preserved as both sides learn that the best way to advance their interests is through another avenue.
Come in with the intention and aim of getting a favourable agreement, but don’t be afraid to walk away.
What makes the teachings of Fisher and Ury so fascinating is that they are principles and not tactics. They work regardless of whether the other side is aware of these lessons. In fact, you’re more likely to have a favourable outcome from the negotiation.
It’s worth remembering that the aim of negotiation isn’t to win and do better than the other side. Angel investor Naval Ravikant sums it up well:
“Smart partners negotiate fair deals because they know that lopsided deals are fragile and that most value accumulates in long-term trust relationships. You can tell a lot about a potential partner by their opening offer.”
Getting what you want doesn’t mean someone else must lose.