Negotiation research you can use: Should you brandish your BATNA?

When and how to reveal what you’ll do if you can’t reach a deal.

By on / BATNA

On August 23, the British government unveiled an initial set of contingency plans for exiting the European Union (E.U.) in the event the so-called Brexit negotiations end in impasse. Brexit negotiations have been slow and contentious, stymied most recently by infighting within factions of the British government about how closely to bind the nation’s economy to Europe.

Fears have risen among British citizens of a slowdown of imports at the border if the parties don’t reach agreement before the exit date of March 29, 2019. The chairman of the British Medical Association, Dr. Chaand Nagpaul, warned that a Brexit impasse could have a “catastrophic impact . . . on the nation’s health.” E.U. officials have warned companies across Europe that they could face supply-chain, travel, and shipping disruptions.

The contingency plans released by British prime minister Theresa May had two main goals: first, to assure the public that Great Britain will experience few significant disruptions if no agreement is reached; and second, to convey to E.U. negotiators that the United Kingdom is prepared to walk away from a deal that doesn’t meet its interests. Failure to reach agreement “wouldn’t be the end of the world,” May said, according to Sky News.

But the British government’s portrait of a sunny no-deal scenario risked conveying it was out of touch with reality. Keir Starmer, a member of Britain’s opposition Labour Party in Parliament, called the no-deal plan “thin on detail, thin on substance.” And Ireland’s foreign minister, Simon Coveney, told Reuters that Britain was merely posturing when it discussed leaving the European Union without an exit deal: “I think the chances of a no-deal Brexit are very slim.”

The British government’s decision to reveal what will happen if Brexit talks fail raises interesting questions for business negotiators about whether and when to reveal their BATNA, or best alternative to a negotiated agreement. In their best-selling book Getting to Yes: Negotiating Agreement Without Giving In, Roger Fisher, William Ury, and Bruce Patton (Penguin, 1991) introduced the concept of BATNA as “the standard against which any proposed agreement should be measured.” When you know what you’ll do if you don’t reach a deal, you can compare that possibility to whatever deal is on the table.

The better your BATNA, the greater your bargaining power, note Fisher, Ury, and Patton. If you’re already excited about one strong job offer, you can bargain hard in negotiations for another job without worrying about what will happen if the employer won’t meet your needs. 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.

Negotiators often wonder whether they should reveal their BATNA to their counterpart and, if so, when. The following six do’s and don’ts will help you manage information about your BATNA with confidence.

1. Don’t reveal a weak BATNA.

It’s Negotiation 101: 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.

2. 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.

What if you feel you need to reveal your BATNA to keep outside parties informed, or for some other reason? With the clock ticking down, forexample, May’s government had little choice but to begin outlining for a worried public what would happen if the two sides couldn’t bridge their impasse. In such cases, frame your BATNA as positively as you honestly can and avoid getting into the details, but be prepared for it to face the type of scrutiny that the British government’s no-deal contingency plans have faced.

3. 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 and hinder your ability to explore tradeoffs that could create value.

Moreover, if the other party doesn’t think your BATNA is as strong as you do, she might drive a harder bargain than she would if she didn’t know about your best alternative. The other party might even try to worsen your BATNA. For example, if you tell a potential employer about a great offer you have that’s due to expire in 24 hours, the employer might try to drag out talks to allow the deadline to pass.

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.

4. Do work to actively improve your BATNA.

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 means 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.

5. Don’t let them talk you out of your BATNA.

Suppose you’re thrilled with your BATNA and are eager to play it up: “I’ve got a great deal waiting for me at the Subaru dealership down the street, but I wanted to see what Honda had to offer first.” Don’t be surprised if your counterpart starts telling you about the unreliable Subaru he had 10 years ago and how he’d never buy one again.

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.

6. Do encourage them to share their BATNA.

Negotiators are sometimes reluctant to ask counterparts about their BATNA for fear of discovering that it’s impossible to compete with. In fact, this would be knowledge to seek out rather than to shy away from. If there’s no way you can give your counterpart what they can get from someone else, you would save everyone’s valuable time by revealing this fact and ending the negotiation. On the flip side, your queries about your counterpart’s BATNA could reveal that she has a terrible one—valuable information that will immediately put you in a stronger bargaining position.

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