BATNA: Best Alternative To Negotiated Agreement

Sometimes it becomes necessary to walk away from a negotiation. When faced with mutually exclusive goals or hostile opposition, the best move can be to leave the table. Knowing when to walk away from a negotiation is an important part of principled negotiations, and part of preparing for a negotiation is finding your best alternative to a negotiated agreement.

Selling a Couch

Benefits of a BATNA

Unlike a “bottom line”, which only sets a limit on a negotiation, your BATNA provides alternatives. It is the safety net in place if negotiations collapse or an ideal outcome is not achievable. In this way, your BATNA (and that of your fellow negotiators) provides a floor for the negotiation, but does not enforce it. If the other negotiator has a bottom line that is less preferable than your BATNA, you can always walk away, if you choose.

A prepared negotiator can leverage their BATNA into a better outcome by threatening to let the negotiation collapse. So long as their best alternative is no worse than the other side’s bottom line, this party can safely withhold cooperation. While this may not always be the best course of action (there are often relationship and time costs to failed negotiations), it is a source of negotiating power.

BATNA Contrast

A Strong BATNA

As an important component of negotiation preparation, finding your best alternative to negotiated agreement may take some work, but will pay off in the end, even if it is never used.

 

To build a strong BATNA

Generate a set of actions that you could take if no negotiation is reached.

  • Imagine what would happen if the negotiation failed.
  • Brainstorm courses of action you could take in these circumstances.
  • What are your options if you can’t come to an agreement?
  • Generate a set of actions.

 

Develop the more promising actions into tangible plans.

  • From all of the possible alternatives, select a few that seem most promising.
  • Which options can you most realistically implement?
  • What has the biggest upside?
  • Develop the actions from the first step into concrete plans.

 

Evaluate the likely results of these plans.

  • What is the likely result of each plan?
  • What metrics can be used to measure success?
  • How speculative are these estimates?
  • Evaluate the results of each plan based on these questions, so that they can be compared to each other.

 

Select the plan with the best result.

  • Compare the evaluations of the plans you have developed.
  • Which one is best, based on various metrics?
  • Select the one that has the best result overall.
  • This is your Best Alternative to a Negotiated Agreement, your BATNA.

 

What this looks like in practice:

  • With a spider map (like the one below) you can rapidly generate ideas and complete some light development as you brainstorm.
  • Once you have a some ideas recorded, let the spider map sit overnight and review the alternatives with fresh eyes the next day.
  • Find a trusted advisor, mentor, or coworker, and look at the options you think are best.
  • If some of the ideas are still vague, develop them further, otherwise pick the cell on your spider map that is the best.

 

Remember: it is important to be prepared for negotiations, but a strong is only one component. A graphic organizer, like a spider map, is a great way to effectively compress the process by quickly producing and communicating creative solutions.

In this example, a local widget startup considers its alternatives if they can’t renew their current manufacturing contract.

BATNA Spider Map

BATNAs in Action

Let’s see how BATNAs affect a negotiation. In the following negotiating salary example, both negotiators are thinking about their BATNA, guessing the BATNA of the other participant, and trying to strengthen their own position. Chris currently makes $3500 a month, but would like a raise. Her boss, Vishal, is willing to give Chris a raise because she is a strong employee, but due to budget constraints, Vishal would like to minimize the increase.

BATNA in Action

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