The Harvard Principled Negotiation Method, developed by Roger Fisher and William Ury of the Harvard Negotiation Project, is a strategy designed to reach “win-win” agreements.
Instead of traditional haggling (positional bargaining), this approach focuses on the merits of the issues and the needs of the parties involved.
It is built upon 4 fundamental pillars.
1. Separate the People from the Problem
Negotiations often stall because personal emotions and egos become entangled with the technical issues. Principled negotiation suggests that you should be “soft on the people, but hard on the problem.” By building a relationship of trust and mutual respect, you can attack the issue together rather than attacking each other.
Business Example: Renault-Nissan Alliance When Carlos Ghosn initially navigated the turnaround of Nissan, he had to manage deep-seated cultural differences between French and Japanese corporate styles. Rather than letting national pride or personal friction dictate the terms, the leadership focused on the shared “problem” of global competitiveness and debt, treating the cross-functional teams as partners against the crisis.
2. Focus on Interests, Not Positions
A position is what you say you want (e.g., “I want a 20% discount”). An interest is the underlying reason why you want it (e.g., “I need to keep my overhead costs within a specific quarterly budget”). By identifying interests, negotiators can often find creative solutions that satisfy both parties.
Business Example: Coca-Cola and its Bottlers In various international markets, Coca-Cola often enters into negotiations with local bottling partners. A bottler might take the position of wanting higher concentrate prices. However, the underlying interest is often long-term volume growth or infrastructure investment. By focusing on shared interests—increasing market share—they can structure deals involving marketing support or equipment subsidies rather than just fighting over a single price point.
3. Invent Options for Mutual Gain
This pillar encourages “expanding the pie” before dividing it. Instead of assuming there is a fixed amount of value, parties should brainstorm multiple options that provide value to both sides. This requires a shift from a competitive mindset to a collaborative, creative one.
Business Example: Apple and Samsung Despite being fierce competitors and frequent litigants in the smartphone market, the two companies maintain a massive supplier-buyer relationship. They “invent options” by separating their legal battles over patents from their supply chain agreements. Samsung provides high-end OLED displays and semiconductors to Apple because it benefits Samsung’s component division (revenue) and Apple’s product quality (market lead).
4. Insist on Using Objective Criteria
To avoid a battle of wills, the agreement should be based on independent standards. This could include market value, expert opinions, legal precedents, or industry benchmarks. Using objective data makes the result feel fair and easier to justify to stakeholders.
Business Example: Rio Tinto and Government Royalties When global mining giant Rio Tinto negotiates extraction rights with governments (such as in Australia or Mongolia), they rarely rely on arbitrary numbers. Instead, they use objective criteria like global commodity spot prices, independent environmental impact assessments, and standardized transparency frameworks to determine royalty rates and community investment obligations.
The BATNA Concept
A critical component of this method is the BATNA (Best Alternative to a Negotiated Agreement). This is your “walk-away” position. Knowing your BATNA prevents you from accepting a deal that is worse than your outside options and gives you the confidence to push for a principled result.
Draft a negotiation strategy for a specific business scenario using these four pillars.