Sunday 5 March 2017

The Power of the BATNA

Recently I have been working with a few people preparing for forthcoming negotiations. As always, I lean heavily on the wisdom of the Harvard Negotiating Project, as captured in the seminal book, Getting To Yes. 

Once again, I have been struck by the simplicity, power and simple rightness of the approach. In particular, the power of the BATNA.

The BATNA is the Best Alternative to a Negotiated Agreement. It provides the final criterion to judge whether or not you should accept a potential agreement. If the agreement is better than your BATNA, then you would be wise to accept it; if your BATNA is preferable, then refuse the agreement, and implement your BATNA.

It sounds simple, and it is; yet people rarely negotiate like that. Too often, people have a 'bottom line' approach to evaluating an agreement. But that is fraught with problems, particularly in a situation which is changing in live-time, or where there are many factors to consider.

But the other thing about the BATNA is that it tells you where the power lies in the negotiation. It is easy to believe that the power lies with the party with most wealth, resource, influence etc. Yet that is not the case. The power actually lies with the party who can walk away from the negotiation most easily; that is, the person with the best BATNA.

From that it follows that there are two key things to do before negotiating, if you can. One is to develop the most attractive BATNA you can for yourself: not because you necessarily want to adopt it, but because you will negotiate with more power if you have it available to you. It is like going to a job interview with another attractive job offer already made: it affects your performance. The second thing to do is to understand the other party's BATNA. If it is unattractive, then you have more power; if it is very attractive, you have less. Knowing that is very valuable.

For more on this, the book, Getting to Yes is highly recommended. And I also comment on it in relation to my book Shifting Stories, over on the Shifting Stories website.

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