What is a BATNA in negotiation? In their bestseller Getting to Yes: Negotiating Agreement Without Giving In, Roger Fisher, William Ury, and Bruce Patton (Penguin, 1991) described BATNA, or best alternative to a negotiated agreement, as the path you’ll follow if you don’t reach agreement in your current negotiation.
Awareness of your BATNA will keep you from accepting a worse outcome than you could get elsewhere—and, conversely, from rejecting an agreement that’s better than your BATNA. If you’re excited about a strong job offer, for example, you can bargain hard in negotiations for another job.
Should you reveal your BATNA to your counterpart, and if so, when? BATNA examples in the news shed light on this difficult question. Consider British prime minister Theresa May’s decision back in August 2018 to unveil an initial set of contingency plans for exiting the European Union (E.U.) if the so-called Brexit negotiations ended in impasse.
May’s contingency plans were intended to quell the public’s fears that an impasse would lead to chaos, as well as to convey to E.U. negotiators that the United Kingdom was prepared to walk away from a deal that didn’t meet its interests. Failure to reach agreement “wouldn’t be the end of the world,” May said, according to Sky News.
The British government’s decision to reveal what will happen if Brexit talks fail raises interesting questions regarding the role of BATNA in business negotiation strategies. The following five do’s and don’ts will help you manage your BATNA with confidence.
- Don’t Reveal a Weak BATNA.
Never share your BATNA with the other party if it is hopelessly weak. A bad BATNA is also known as a WATNA, or worst alternative to a negotiated agreement. Telling a supplier, for example, that you dumped your last partner and are desperate to do a new deal is a surefire way to ensure the supplier will highball you on price and resist compromising. You will also want to be careful to avoid appearing to be in a hurry, seeming stressed, or revealing that you have a wide-open schedule—all potential “tells” that you don’t have much else going on and may be ready to close a deal on your counterpart’s terms.
- Don’t Bluff about Your BATNA.
What if the other side asks you about your BATNA directly? Explain (truthfully) that you are working on various possibilities but want to concentrate on the deal on the table for the time being. Resist the urge to embellish or fabricate a BATNA to try to boost your bargaining power. You’ll sacrifice not only your ethics but perhaps also your reputation if you’re caught in an exaggeration, misrepresentation of facts, or lie.
- Don’t Reveal Your BATNA Too Early.
When you open up about a great BATNA to your counterpart early in the game, the information could come across as a threat: “If you can’t give me an even better deal than the one I just outlined, I’m out of here.” Threats foster a competitive atmosphere when making business deals and hinder your ability to explore tradeoffs that could create value. Even if you’re certain your BATNA is rock solid, hold off on revealing it. It could prove to be a useful bargaining chip during the final stages of a negotiation after you’ve exhausted all other strategies.
- Do Work to Actively Improve Your BATNA.
As BATNA examples such as the Brexit negotiations demonstrate, it’s not enough to simply talk about your BATNA. Rather, you need to do everything you can to try to improve it. For Prime Minister May, that meant asking government agencies and private companies to prepare for an orderly transition in case there is no deal. For a job seeker, that might mean continuing to seek leads in your network or thinking about other paths, such as going back to school.
- Don’t Let Them Talk You out of Your BATNA.
When a counterpart disparages your BATNA, he is obviously hoping to taint it in your eyes. Don’t fall for this tired, old ploy. Of course, it’s smart to investigate any potentially legitimate claims the person makes about your BATNA, but recognize that he has very real incentives to convince you that your outside options are not as good as you’d like to believe.
What BATNA examples can you share that shed light on when to reveal or conceal?
Thank you very much, Harvard. Useful.