“A principle is involved,” he said, “and that’s why we’re taking a hard line. The principle is just too important to undermine. As a result, we will not concede on that issue.”
This “principle is involved” negotiation move can be one of the most frustrating to address.
So what exactly does it mean, and how can you address it most effectively?
1. Determine whether it’s true “principle.”
In most cases, the “principle is involved” move signals:
A critical and bona fide principle really is involved.
The “principle” is a subterfuge intended to justify intransigence.
The “principle” is a bluff.
How do you evaluate which signal or combination of signals is involved?
First, find out as much as you can about the alleged principle involved. Especially focus on the actual principle and why it appears so important to your counterpart — that is, what is the true interest or objective standard involved?
The principle might be that your counterpart has publicly drawn a line in the sand on that issue, and conceding it would harm his reputation. This would be a personal reputation interest.
Or the principle might be consistency in treatment of similarly situated customers. Your counterpart might say, “If we gave in to you, all our other customers would want the same provision in their contracts.” Your counterpart’s interest here would be avoiding a precedent that could haunt them later.
Other principles might involve honesty, honor, trust or loyalty. Your counterpart might say, “I told Pat I would not give anyone else a better deal, and while it’s not legally binding, I feel honor-bound to stick with it.”
After finding out about the principle, evaluate how truly critical it is to your counterpart. In other words, engage in some strategic due diligence by contacting others who have negotiated with your counterpart in the past. Ask them if similar “principles” arose in their negotiations and how they played out. At the end of their negotiations, did they conclude it was a true principle, an attempt to justify intransigence, or a bluff? How did they address it?
Overall, in a lot of cases, your counterparts’ reputations will precede them and you won’t have to reinvent the wheel.
2. Independently reality-test the “principle.”
Assuming you don’t want to simply concede the issue — which, if you don’t care about it much, may be your best response — follow up on your initial evaluation by reality-testing the principle yourself.
You can do this by finding a way to satisfy their interest at little or no cost to you, suggesting that option and carefully gauging their response. For example, if they indicate their public reputation is at risk, suggest an airtight, enforceable confidentiality clause with a substantial penalty if it’s violated. If they still balk, their reputation principle more likely is a subterfuge or bluff.
And if their interest is in consistency, treating their similarly situated counterparts the same and avoiding bad precedent, suggest a “most favored nations” clause. This clause, which legally binds them to not give anyone else a better deal on that issue, will ensure they put their money where their mouth is.
Again, their possible reluctance will be telling.
You also can reality-test the principle by picking an independent, objective standard to explain your competing interest, then evaluating their potential willingness to concede as a result.
3. Evaluate the Plan B’s.
At the end of the day, find out if their Plan B — what they will do if they don’t do a deal with you — is better or worse than a deal with you involving their concession on that issue. If it’s better, and they will walk on that issue, it’s likely a true principle or a subterfuge. Either way, it’s not a bluff and their hard-line approach will not likely change.
And if their Plan B is worse than what you have put on the table, then they will most likely concede.
Bottom line for you: Is your Plan B better than conceding on their “principled” issue? If so, walk away. If not, concede, ask for a reciprocal concession and continue negotiating.
Of course, there are principles and there are “principles.” We can’t always be certain which is which. But we can take steps to assess their relative probabilities accurately. Doing so will increase the likelihood of getting your best possible deal.
Published May 2, 2008 The Business Journal