BATNA

• This chapter explores a very important, and yet dangerous, element: alternatives
• Misunderstood or mishandled, alternatives invite win-lose moves and can undo much of our value negotiation effort
• Alternatives are an important part of a value negotiator's toolkit, just one that comes with a tag: "Handle with care!"
• BATNA


  Best Alternative to a Negotiated Agreement
• Alternatives


  • They are very powerful
  • They tempt us away from our value-focus into a power struggle
• Handling alternatives


  1. Understand if/why we need to have alternatives

  2. Manage a negotiation when they bring their alternatives in

  3. Manage our alternatives

  4. Decide whether to share them and how

  5. Bring them forward while keeping the win-win spirit
• Many salespeople have to give discounts to buyers to close deals due to quarterly sales quotas
• Buyers often call salespeople near quota deadlines and ask for discounts
• Salespeople sometimes give large discounts (up to 90%) to close deals near quota deadlines
• Alternatives


  The emergency exits, the safety net, the insurance policies that prevent us from being hostages in our own negotiations
• The paradox with alternatives is that most people are quick to talk about, but reluctant to prepare, them
• Preparing alternatives


  1. Consider the consequences of no deal being reached to understand the parties' alternatives and potential BATNAs

  2. Improve on our alternatives or build more of them
• Expanding our knowledge about alternatives improves our ability to manage our BATNA and theirs
• Handling their BATNA


  Productively managing the negotiation whenever they mention their BATNA, avoiding a win-lose power struggle
• When they mention their BATNA


  1. Reality test their statement to understand the true impact

  2. Redirect the conversation towards value
• If their BATNA statement is a genuine concern

  They will often collaborate to improve the BOPOT
• If their BATNA statement is a bluff or threat


  They are more likely to resist sharing information
• Redirecting the conversation towards value


  1. Relearn interests and tailor better options to increase our BOPOT's value

  2. Legitimize the added value of our BOPOT
• To avoid offering concessions, we can frame the value pursuit as a collaborative exercise
• Without trying to corner them, we should insist on reality testing towards value, instead of accepting a power play
• Once our reality testing has clarified the differences between our BOpoT and their BATNA

  1. We can redirect the conversation towards value

  2. If they lean towards their BATNA, we need to relearn interests and tailor better options to increase our BOPOT's value

  3. If our BOpoT is already better, but they do not see this, we need to legitimize its added value
• To avoid offering concessions and unilaterally rewarding their BATNA statement, we can frame the value pursuit as a collaborative exercise
• If we improve the BOpoT for them, they should be ready to do the same for us
• If our BOpoT is worse than their BATNA


  There is little we can do, it would make little sense for them to close a deal with us
• Acknowledging their right to walk away can strengthen the future of the relationship and weaken potential threats
• External BATNA

  An alternative that a party can pursue if they walk away from the negotiation, i.e., they seek resources external to the negotiation
• Internal BATNA

  An alternative where a party walks away from the negotiation as it is intended. It happens in multi-party negotiations, or when decisions are shared by more than one person on each side
• If the other side has a threatening BATNA, we cannot just try to handle it once it is brought inside the negotiation
• We need to also look and manage around the negotiation
• Whenever legitimate, we can try to reduce the power of their BATNA
• Rewarding good behavior (sharing data) + learning further

  Detailed differences between BATNA and BOPOT
• Confused about interests priorities + BATNA (are they equally reliable?)

  Acknowledge interests and checking for potential perception of unfair pricing + legitimacy on reliability
• Afraid of BATNA-bashing

  Being specific on the advantage of the BOpoT over BATNA + presenting legitimacy to clarify perception of added value
• Ghassan called the next day to close the deal without further asking for a discount


  Tali had reduced the power of Ghassan's BATNA by preparing her boss, making it useless for Ghassan to go over her head
• Like every move to an alternative, despite our best win-win intentions, our efforts to reduce their BATNA's power can be seen as win-lose
• We prefer to avoid unilateral power moves, since they risk ruining the relationship if identified or misinterpreted
• Ubiratan realized he had no alternatives


  He then decided to change strategies
• Ubiratan started to search for other places while negotiating an option to stay at their current location for another three months
• Though the search didn't lead to a better place, the extension option was accepted
• Linda accepted the 30% lower rent