BATNA: Best Alternative to a Negotiated Agreement

What You'll Learn
  • BATNA, a best alternative to a negotiated agreement, is your ability to walk away from a negotiations where the concessions given are not as good as your plan B.
  • BATNAs give you power and leverage in negotiations, making your opening and your concession pattern stronger.
  • A BATNA that you aren't willing and able to execute is not a BATNA - it's a Bluff.

Your Best Alternative To a Negotiated Agreement is a well conceived plan that you are willing and able to execute if no agreement can be reached.

The Prepare stage is when you plan what are you going to do if no agreement is reached. You also guess at your counterpart's BATNA. 

In the Exchange stage, you need to test your assumptions and learn more about your counterpart's contingency plans, or BATNAs.

  • The more you know, the more accurate assessment you can make about the relative strength of your BATNA compared to your counterpart's BATNA.
  • In Exchange, you will also hint at your BATNAs if they are indeed strong. You want the other side to perceive you have the power to walk away from this agreement if necessary (assuming you do; bluffs are always risky).
  • If you determine you don't trust the other side, or find they have been deceitful, this is a good time to got to BATNA.

In the Bargaining stage, it is the strength of your BATNA (and theirs) that supports the assertiveness of opening positions.

  • The stronger the BATNA, the more assertive the opening position. You may think their opening is ridiculous and they are playing hardball (trying to anchor you); consider whether they simply have a very strong BATNA.
  • When they say 'No' in Bargaining to your proposal or ideas, reassess the strength of their BATNA and whether you can beat their BATNA.

Here are some tips on leveraging BATNAs:

  • The BATNA is a unilateral option that does not depend on the consent of the other party.
  • The more BATNAs you have and the more willing and ready you are to execute one, the less likely you will need a BATNA.
  • Consider short-term and long-term BATNAs. Sometimes you don’t have a BATNA and must reach agreement. Be sure to continue working on a long-term BATNA for future use.
  • Having well thought-out BATNAs that you are willing to execute provides you with a tremendous amount of power during negotiations.
  • You want to find a graceful way to ensure the other side knows you have BATNAs and will execute.
  • Start to let the other side know you have BATNAs during the Exchange stage, although not necessarily what they are. In Bargaining, you will decide if and when to reveal your BATNAs.
  • If you are having trouble learning and assessing your counterpart's BATNA, this may indicate you need to build more trust before probing further.
  • BATNAs can be used as an advisory or a threat. Threats damage relationships; advisories strengthen them.
  • Misreading the strength of your counterpart's BATNA can result in impasse after extensive time has already been invested in bargaining.
  • Ideal time to execute BATNAs: If you have fairly assessed the parties' BATNAs, yours and theirs, you might choose to execute your BATNA before entering the Bargaining stage. You certainly don't want to spend time in Bargaining only to get to the Conclude stage and have to execute your BATNA. 
  • Misreading the strength of your counterpart's BATNA can result in ipasse after extensive time has already been invested in bargaining.
  • If you have all the power in a negotiation, it is wise not to talk about your BATNA. When parties with power flaunt their BATNA, the less powerful counterpart builds an offensive. (i.e., your competitors all need this product and we have limited capacity; we can get this from any number of suppliers; there are 7 others who want this same location, etc.)
  • Renegotiations discussions almost always involve a battle of BATNAs. 
  • A BATNA that you aren't willing and able to execute is a Bluff.