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May 21, 2012

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You Can Do Better If You Know Your BATNA

 Being a good negotiator is not about closing as many deals as possible, it’s about closing the best deal and say no when your BATNA allows you to do better.
BATNA negotiation
  Not every negotiation concludes with an agreement. There are times when you can do better by walking away. The BATNAs let you make a wise decision on whether to accept a negotiated agreement, as you consider your alternatives and results out of the negotiation. We must clarify the difference between alternatives and options. On one hand, the options are on the negotiating table, and are the cards you play to reach a negotiated agreement, such as payment terms, discounts, guarantees, etc. the alternatives are the results you could get without negotiating.

  According to Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In:
"The reason you negotiate is to produce something better than the results you can obtain without negotiating. What are those results? What is that alternative? What is your BATNA -- your Best Alternative To a Negotiated Agreement? That is the standard against which any proposed agreement should be measured."
  The BATNA is a methodology which implies that when you've negotiated, whether for years, months, days or minutes, and both sides have committed all that they are willing to compromise; you should evaluate your alternatives before accepting or not an agreement.

  In the simplest terms, if the proposed agreement is better than your BATNA, you should accept it. If not you should reopen negotiations, or withdraw from them and go after your alternatives. However, your alternatives must be realistic and the cost of pursuing them must be considered.

Identifying Your BATNA

  It is simple. It comes to identifying what you should do to satisfy your interests if the negotiation fails or if no agreement is reached. In other words, which is your back-up plan? Keep in mind that the more alternatives, realistic ones, you got, the better your BATNA, and the greater your power in the negotiation.

  However, when determining your BATNA you should consider the options available to the other side and remember that both parties have a BATNA. By attempting to understand what are their options, you will be able to be better prepared for negotiation. Likewise, it will allow you to understand how strong or not your position is in the negotiation. Furthermore, you will be able to develop a more realistic view of what the outcomes may be and what offers are reasonable.

  Identifying your Best Alternative To a Negotiated Agreement can strengthen your negotiation position. When you have a strong alternative solution to a lousy proposal, your BATNA can be your trump card to make the deal happen to your advantage, or walk away from it altogether. And by knowing and strengthening your BATNA you will improve the outcomes of all of your negotiations.