What Is Best Alternative To A Negotiated Agreement or BATNA

When you are negotiating ANYTHING and your best option looks like it won’t happen, a BATNA will be your best alternative, or as it is formally defined, the acronym BATNA stands for, ‘your best alternative to a negotiated agreement’.

y preparing one and preferably more BATNAs (options), in advance of a negotiation, you empower yourself. Whether you are asking for a pay increase, buying a competitor company, or deciding with your partner where to go on vacation, when you prepare your BATNAs you give yourself choices you can feel good about because you’ve researched the pros and cons in advance. You can make good, informed decisions quickly, without regret because you’ve thought through alternatives. 

As Kenny Rogers sang in the song ‘The Gambler’ “You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run.” Little did Kenny know that when he first started singing “every hand’s a winner and every hand’s a loser”, that in 1981 Roger Fisher and William Ury would coin the term BATNA in their bestselling book, ‘Getting to Yes: Negotiating Without Giving In’. Fisher and Ury would define and idea that embodied preparing yourself to make good, informed decisions quickly. And I wonder if Kenny Rogers somehow inspired Roger Fisher and William Ury.

But thinking through your alternatives is only half of the process to determine your best choice. Imagine how empowering it would be to explore, as best you can, what the alternatives of the other person or business. For example, imagine you want to purchase a house and you’ve seen two that interest you. They both have similar pros, cons and pricing, but house A has just come on the market, and house B has been on the market for 45 days. The other difference is that house A is a 15-minute drive closer to your work than house B. While house A might be your preference, house B might be a good BATNA for you. And while a con is that house B means a longer drive to work, the owners of house B might be more motivated to negotiate price. How high house B sits on your priority list might include how price sensitive you are and how much of a demotivator it is to be 15-minutes further away from work.

Pros of BATNA

At a glance, the BATNA pros include:

• Provides an alternative if the primary negotiations fail.
• Empowers you or other negotiators to make the best decisions.
• You will know you don’t need to compromise as much when you know you have a good alternative.
• Your BATNA can keep you from getting caught up in the moment and accepting an offer that has fewer advantages.
• Reduces the impact of bias and emotion.
• Makes agreement more likely, as a well researched and fair BATNA is more likely to be acceptable by all.
• Reduces stress around negotiations, crucial conversations and potential difficult conversations.

How To Determine Your BATNA 

Since BATNA is the identification of alternative solutions in advance of a negotiation, it’s important to know how to determine your BATNA or BATNAs.

While a BATNA may not always be easy to identify, the following are several steps you can take:

1. List as many alternatives you can think of if your negotiations for your ideal option don’t work out.
2. Evaluate the pros and cons of your alternatives based on your values, goals and resources. Other criteria can be anything that is important to you / the project or your organization and can also include (but not limited to):
   • Affordability
   • Long and short-term market impact
   • Long and short-term job impact
   • Long and short-term earnings / profit
   • Which is most affordable and feasible?
   • Which will have the most impact in the shortest amount of time?
3. Prioritize your options as best you can based on their strengths and weaknesses. Be very clear about what your lowest-valued / bottom-line BATNA is. Remember, sometimes it is best to walk away.

And as I mentioned earlier, when you’re done identifying, evaluating and prioritizing your BATNA, be sure to explore the alternatives, pros and cons of your counterpart's BATNAs.

Conclusion:

To reach the best possible outcome, it’s important to do as much preparation as possible before entering into negotiations. While BATNA dramatically improves your chances of a satisfactory outcome, it is not a guarantee. Even your BATNAs might become unattainable, but it is far less likely if you are prepared in advance.

If I was able to ask my dad what a BATNA is, I imagine he would simply say, “Know what your alternatives are and when the cost [any cost] is too high. And then, as best you can, know the same for the other person.”  Dad always kept things simple.

Thank you for reading ‘What Is Best Alternative To A Negotiated Agreement’.  If you have any thoughts or questions, please let me know.