August 25th, 2020
What is BATNA? What would you do if you just couldn’t reach a negotiated agreement? You’ve tried every one of the negotiating tips we’ve written about, every technique, every strategy and you’re still not at a settlement or you’re still not at the goal you wanted to achieve. This is where you need a BATNA. What is BATNA?
What is BATNA?
Negotiating, like most disciplines, seem to have its own language. A case in point is the BATNA. That stands for “Best Alternative To a Negotiating Agreement“.
Let’s make things simple. Know that every negotiator, going into a bargaining session, needs to have a BATNA. Put in other terms, good negotiators have already considered, “What are my options if we can’t reach a negotiated agreement?”
What is BATNA? Well what if…
- We don’t sell the house?*
- I can’t get this job?
- They won’t agree to my price?
- My proposal isn’t accepted?
Rather than be surprised at these unsavory possibilities and feeling the need to cave in, wouldn’t it be wise to consider beforehand what could be done in such cases? *This is a question all sellers should ask themselves BEFORE even interviewing a real estate agent
What is BATNA?
“Negotiating is a very tricky task, especially when you have something crucial at stake. You can find yourself struggling when the negotiation starts to favor the other side. In such cases, you have three options: accept the deal without further negotiations, walk away from the deal, or present a better alternative to the negotiation. While the first two options are self-explanatory, the third is key to turning a negotiation in your favor. BATNA—Best Alternative To a Negotiated Agreement—is your trump card when the negotiation starts to turn unfavorable.” ~ karrass.com
Now don’t confuse BATNA with one’s “bottom line position”. The bottom line is a position which describes the worst possible outcome that a negotiator could accept. Notice they “could accept” it, even though it would be painful.
The BATNA is the alternative when there is no possible acceptable agreement. The deal just isn’t going to work. Now what? The answer to that is one’s BATNA.
If there is no BATNA and a deal “has to” go together, concessions will have to be made regardless of how compromising they are. Such situations are rare. There is typically an alternative to be considered, such as – no deal!
Here’s the key. Most amateur negotiators won’t consider a BATNA because they are so emotionally committed to putting a deal together. They ignore the ‘no deal’ possibility and miss tapping the power of the BATNA.
When creating a BATNA, a negotiator should:
- Brainstorm all available alternatives that might be considered if the bargaining fails to end in agreement;
- Select the most promising alternatives and develop them into practical and attainable alternatives;
- Keep it in reserve as a fallback during the negotiation.
Of all the negotiating mistakes or failed strategies encountered, none is more profound than failing to PREPARE for a negotiation. Such preparation is incomplete without also determining the BATNA.
Good negotiators tap the amazing power of the BATNA. This is one of the negotiating tips most difficult for me to grasp and to implement because BATNA is a place we really don’t want to go. Having a BATNA before you start negotiating allows you to make greater demands of the other side, as you have a viable alternative available. As a result, you will have an easier time walking away if the negotiations are favoring the other side.
You always, always, always want to have your BATNA figured out before you start a negotiation because if the other party understands that you have a better option, they may be forced to match it or do better