We all know the key to success in negotiation is preparation.
But what is often overlooked is the question “what happens if the negotiations do not go as planned?” Should you try again, give in, source elsewhere?
Knowing your best fall-back position informs your negotiating stance and can strengthen your hand.
This is called your BATNA (Best Alternative to Negotiated Agreement).
The BATNA concept was introduced in the book “Getting to Yes” from the Program on Negotiating at Harvard.
Your BATNA is even more important when negotiating from a position of weakness. Examples of this may be:
Having to sell your house quickly due to divorce or job relocation.
Selling goods or services to companies who know you really need the work.
Negotiating with a company that has previously identified as preferred supplier.
Negotiating a side agreement with a company that has a long contract with you.
Negotiating for a product in short supply or where there is a sole supplier.
Your BATNA can:
Increase your confidence
Increase your negotiating power
Give you the ability to say no
You may already use a BATNA, perhaps you call it ‘Plan B’ or ‘A letter in your back pocket’. If so great but remember to review it before you use it. Things change fast in today’s world.
How do we formulate a BATNA?
Clearly specify the proposal and aims of the negotiation.
Assess the impact / importance of the negotiation to your business.
Brainstorm proposal with all persons with meaningful input to the proposal.
Look at ALL the possible alternatives and these can be as wide ranging as redesign product to walk away. Every negotiation will have a unique set of alternatives.
Assess the alternatives and pick the one which best fits your companies needs and priorities.
You now have a raw BATNA.
Strengthening your BATNA
Back your BATNA with facts from the internet, trade fairs, competitors brochures, research, financial analysis etc. If in extreme circumstances you need to reveal your BATNA during negotiation it must stand up.
Should I reveal My BATNA when negotiating?
Discussing the fact you have a BATNA will improve your negotiating position, but revealing it entirely may give your counterparts more material to find fault. Subtle references to your BATNA, an occasionally revealed brochure from competing firms or a glimpse of a sheet of market analysis may prove much more helpful.
Where can I find out more?
The construction of a strong BATNA is covered in our course “The Fundamentals of Negotiation” where we go into far greater detail giving useful examples and detailed guidance as well as covering all other aspects of negotiating. You will find full details on our website: www hawkinsconsulting.com Link to the course online .
In the meantime, feel free to download our pdf guide (PDF) link to download (longer) file on developing a BATNA.