Agreeing principles right at the start of a negotiation can be transformational. A smart set of principles can tame powerful aggressors, create leverage where you have none and convert a competitive battle into a value creating collaboration.
Principles are not opening positions. On the contrary, they are absolutely non-negotiable. They are an objective description of what “a good outcome” would look like for both parties. Positions create conflict. Principles create trust.
In any negotiation where you don't have the balance of power, don't make any proposals until you have agreement on the principles that you want to define the success, style and scope of the talks to come.
Examples might be: “whatever we agree has to be profitable to both of us within this financial year”; or “any deal must not compromise our relationship with our European licensees”. They must be simple, genuine, reasonable, and specific enough to be used as a quick check for any proposal.
Getting agreement to a set of principles creates a powerful anchor to which you can always return. It means that your counterpart will be working to find solutions that you could accept, rather than sticking to an extreme or contrary position, and trying to break your resolve.
DO USE: When trust is low and stakes are high; when joint problem solving makes more sense than hard bargaining
DON'T USE: Principles as positional bargaining chips; or when you have an overwhelming balance of power