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Mastering Principled Negotiation: A Guide for Business Leaders

A Critical Skill for Buyers

Negotiation is a critical skill that every business leader needs to master to achieve their goals efficiently and amicably. In today's world, success in business negotiations can be the difference between a thriving enterprise and a struggling one. But how do you negotiate with intelligence, integrity, and fairness? Enter principled negotiation, which turns engagements into a problem that needs to be collaboratively solved. In this blog post, we will explore the four elements of principled negotiation and how you can use them to position yourself to get more from your org.



Separate the people from the problem:

The problem is not the person, but their interests, needs, and concerns. This is the cornerstone of principled negotiation. By separating people from the problem, you can focus on solving the problem and not get bogged down by emotions, biases, and stereotypes. Start by acknowledging the other party's emotions, perceptions, and viewpoints, and keep the conversation respectful and honest. Strive to understand their interests and concerns, and communicate yours. This will create a foundation for mutually beneficial solutions that preserve the relationship.


Focus on interests, not positions:

People often approach negotiations with fixed positions that don't leave room for creative problem-solving. For instance, if you're negotiating a salary with a new employee, you may get stuck on a fixed number instead of exploring other options, like benefit packages. Principled negotiators focus on interests, not positions, by exploring the underlying needs and aspirations of both parties. This leads to the invention of many more solutions that benefit everyone involved. Ask open-ended questions and actively listen to uncover their interests. Share your interests candidly and seek mutually beneficial solutions that maximize gains for both parties.


Invent options for mutual gain:

Options and flexibility are key to wise outcomes in principled negotiation. By generating many possible solutions, you increase the chances of finding one that benefits everyone. Be open to brainstorming, ideation, and creativity. Don't evaluate or judge the options until all the possibilities are laid out on the table. Look for trade-offs, complementary interests, and innovative solutions that create mutual gain. Consider the other party's interests as you evaluate the options. If you put yourself in their shoes, you may discover creative solutions that may not be immediately apparent.


Insist on using objective criteria:

Objective criteria is a robust way to anchor negotiations in objective standards, principles, or norms that are not easily manipulated. For instance, if you’re negotiating the price of a product, you may use market prices, competition, or industry standards as objective criteria. Using objective criteria levels the playing field, reduces bias, and provides a solid yardstick for evaluating the options. It also provides a basis for independent third-party dispute resolution if negotiations fail. Be open to using multiple objective criteria so that you can structure a more robust negotiation.



Don't Forget your BATNA!

Separating the people from the problem, focusing on interests, inventing options for mutual gain, and insisting on using objective criteria are the four elements that constitute principled negotiation. Moreover, don't forget the importance of establishing a BATNA, which is critical in determining your negotiating power and alternatives. By mastering these principles, you can become a principled negotiator who achieves success by finding solutions that benefit everyone. So next time you face a negotiation, remember to approach it with intelligence, integrity, and fairness, and open yourself to conversation.

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