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Use this model to frame and inform your negotiation strategy.
Best Alternative to a Negotiated Agreement or BATNA is the best you can do if talks break down and therefore is your bottom line in negotiations.
WALK AWAY POINT.
Your BATNA represents your bottom line or ‘walk away point’ because sinking below your BATNA in a negotiation makes the negotiation pointless. By the same token, the opposing party will also not accept a negotiated settlement below their BATNA.
ZONE OF POSSIBLE AGREEMENT.
The range between your and the opposing party’s respective BATNAs is known as the ZOPA, or Zone of Possible Agreement — it is the range where a negotiated settlement might land.
IN YOUR LATTICEWORK.
BATNA is a fundamental mental model in negotiation theory.
An aligned model includes Opportunity Cost, which is very similar though not just related to negotiations. The Anchoring Heuristic is also a useful model to frame and influence negotiations and, in different ways, so is Cialdini's Six Principles of Persuasion.
- Know your exact BATNA.
Create a list of actions you can take if no agreement is reached and choose the most acceptable alternative. Not having a BATNA gives more bargaining power to your negotiation partner.
- Strive to discover your opponent's BATNA.
Consider the likely BATNA of your opponent. If you establish this, correlating your own BATNA with theirs gives you a zone of possible agreement (ZOPA) - the overlap between the two parties' settlement ranges. The challenge is to obtain a negotiation result that is closer to their BATNA than yours.
- Be honest about the power balance.
Understanding the respective BATNA between yourself and the other party will provide insight into where the current negotiation power lies. It serves as a reality check to guide your approach.
- Consider how to (ethically) weaken your opponent's BATNA.
Methods for weakening the other party's BATNA include asking for exclusive negotiation periods, changing the pace of negotiation, and limiting the area of negotiation. At the same time, try (ethically) affecting your counterparty’s perception of your BATNA.
Your BATNA's strength can easily be affected by unexpected changes in conditions. At the same time, determining BATNAs for you and your counterparty is difficult due to subjectivity, as we have a tendency to overestimate the strength of our BATNA and to underestimate the strength of the other side's BATNA.
Other factors influencing BATNA, like relationship value and the likelihood of the other party maintaining their side of the bargain are also difficult to value and measure in a quantifiable manner.
Finally, using BATNA as a mental model to assist in negotiations should not be counterposed to developing rapport, active listening and other methods to connect and find potential win-win options.
The Brexit BATNA.
In August 2018 British Prime Minister Theresa May revealed a plan of contingency for exiting the European Union (E.U.) if the so-called Brexit negotiations ended in an impasse, revealing the Government’s BATNA to quell the public’s fears.
Salary negotiation.
In a salary negotiation, the employee might have a basic BATNA of their current salary, assuming that the negotiation will not end with them losing their job. They might increase this by applying for an alternative position with a higher salary, which will become their new BATNA. In such a case, it is not a like for like comparison so the BATNA might become difficult to assess. For the company, they must consider the cost of losing the staff member if they do not meet their expectations. Again this cost is hard to measure.
BATNA is a fundamental mental model in negotiation theory.
Use the following examples of connected and complementary models to weave BATNA into your broader latticework of mental models. Alternatively, discover your own connections by exploring the category list above.
Connected models:
- WATNA: the worst alternative to a negotiated agreement is the other side of this equation.
- Opportunity cost: BATNA is essentially the same as opportunity cost, applied to the specific purpose of negotiations.
Complementary models:
- Porter's five forces: particularly as it relates to the bargaining power of suppliers.
- Non-violent communication: challenges this model in attempting to find a win-win alternative.
- Cialidini’s six principles of persuasion: a powerful option used in conjunction with any negotiation process.
- Mutually assured destruction: where the BATNAs result in disaster for both parties, negotiation becomes an imperative.
- Cost-benefit analysis: in considering BATNA.
- Sunk cost fallacy: to support walking away from a protracted, even expensive negotiation.
BATNA was created by negotiation researchers Roger Fisher and William Ury of the Harvard Program on Negotiation and presented in their fundamental 1981 book Getting to Yes: Negotiating Without Giving In.
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