BATNA is an acronym popularised by Roger Fisher and William Ury which stands for ‘Best Alternative to a Negotiated Agreement’. BATNA answers the question: ‘What would you do if you weren’t able to agree a deal with your negotiation counterparty?’ Your BATNA is the alternative action you’ll take should your proposed agreement fail to materialize. Most business people simply use the phrase: ‘Best Alternative’.
Your BATNA options typically include:
- finding another counterparty to do business with,
- changing the specifications, requirements or formulation,
- not going ahead or at least pausing,
- creating the product, asset or service internally within your business.
Of course if you discover a more attractive alternative, you’ll start negotiating with your more attractive counterpart, and your first negotiation counterparty will become your BATNA (i.e. switching BATNA’s). Since your BATNA is your single greatest source of negotiation power, you need to at least figure out each party’s BATNA.
While almost all our clients understand what BATNA means, relatively few arrive on our sales negotiation courses with an understanding of how to leverage their BATNA (buyers tend to do better). Here’s some of the advice we share with our clients:
- Start researching early, as it usually takes more time than most expect to develop their BATNA to the stage where it becomes actionable.
- Don’t focus exclusively on your BATNA. Most don’t give enough thought or research into uncovering their counterparty’s BATNA.
- Focus on facts not posturing and biases. Most overestimate their batna and often grossly over or underestimate the other side’s BATNA.
- Work on affecting your counterparty’s perception of your BATNA. Best results are usually achieved in business negotiations by being indirect rather than direct about your BATNA, the effect is similar. Of course you need not lie about your BATNA.
- When developing your BATNA, involve your stakeholders or colleagues to move faster while also gaining more options and consensus.
Here’s a great article on BATNA.