BATNA Negotiation Guide: How to Find Your BATNA

BATNA, or the best alternative to a negotiated agreement, refers to a fallback plan if negotiations fail. Contemporary negotiation theory suggests that if you approach a potential deal knowing both your BATNA and the other negotiator’s BATNA, you can enhance your negotiating position to get the best possible outcome.

Establishing a BATNA is a common dealmaking tactic in business negotiations, but it is also used in dispute resolution involving mediators. Sometimes individual parties will submit their BATNA to third-party arbitrators or mediators, and those third-party individuals will review both sides’ BATNA without disclosing it to the other. Knowing where both parties truly stand can help mediators provide a course of action that promotes conflict resolution.

The term “BATNA” traces its roots to the 1981 business bestseller Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher and William Ury of the Harvard Program on Negotiation (PON). Fisher and Ury, professors at Harvard Law School, encouraged parties to approach the negotiation table already knowing the alternative options they would pursue if they couldn’t reach an agreement with their counterparts. The idea was that a strong BATNA gives you a sense of stability and may even help you leverage greater negotiating power in your current negotiation.

Having a strong BATNA means your best alternative is very good. If you would be satisfied to accept your BATNA, you may go into negotiations with confidence knowing that, even if they fail, you have your best alternative to fall back on. In contrast, a weak BATNA will give you less power at the negotiation table. If you want to avoid your best alternative, you might be willing to accept less-than-ideal terms to make the negotiation work.

Before entering a negotiation, you should know your BATNA (best alternative if the negotiation falls through) and your reservation value (the worst deal you would accept), and those of your counterpart. If your BATNA is strong, you may have a higher reservation value because you feel less pressure to make the deal work. If you have a weak BATNA, you might have a lower reservation value because you want to avoid your best alternative.

Successful negotiation tactics often begin with knowing what you’d be willing to concede to a negotiating partner. If, before you enter the negotiation process, you pause to consider what you’d do if negotiations fail, you’ve already taken the first step toward identifying your BATNA. You may find you have a good BATNA—with little downside to a failed negotiation—which could inspire you to negotiate aggressively since you have little to lose. On the other hand, you may realize you’re stuck with a weak BATNA, which means you’d suffer immensely if negotiations fail and you may be less likely to risk blowing up a deal.

You can take your negotiation position to the next level if you also know the opposing party’s BATNA. It can help to brainstorm what their fate might look like if the deal breaks down. If you honestly assess the other party’s standing and find they have a weak BATNA, that can give you the confidence to press hard and get major concessions.

To see how the BATNA concept works in the real world, consider these two examples.

1. 1. Job offer: Imagine you have to negotiate the terms of a new job. You know it will provide fulfilling work, which appeals to you. On the other hand, it pays the same as your current job and will require you to move from your small rural town to New York City, where a dollar does not go nearly as far. You want to ask for more money, but you have no idea if the prospective employer will agree to this. If want to improve your negotiation skills, you would begin by thinking about what would happen if you did not take the job. Presumably, you’d stay in your current job, and while you may find the work less than inspiring, there would be no hit to your bottom line. On the other hand, you may dislike your current job and have long desired to give big-city life a try. Ask yourself what would be worse: taking the financial hit or staying at home for more of the same? Knowing this answer will help you decide just how aggressive to be at the negotiation table.
2. 2. Buying a used car: Start by knowing what you would do if you walk away without buying the car. Would you keep driving your current vehicle, or would you be in a lot of trouble without a new set of wheels? Are other dealers selling similar cars for slightly lower prices? Answer these questions before negotiations begin. If you find you have a pretty good BATNA, you don’t have to put up with hardball tactics from a pushy salesperson.

Identifying your best option if a negotiation falls through often takes some preparation. Follow these steps to find your BATNA:

1. 1. Brainstorm alternatives. Start by writing a list (or creating a mind map) of what you could do if your negotiation fails.
2. 2. Narrow it down. Once you have your list, you may need to edit it down to a manageable size. Select the best options from your initial brainstorm.
3. 3. Identify the steps. Develop your best options further by outlining what each alternative entails. These practical steps transform your alternatives from ideas into viable options. If your negotiation fails, you’ll know exactly what you need to do to execute your BATNA.
4. 4. Choose the best option. Your BATNA is the best, most variable of these alternatives. You may want to choose the top two or three options in case your best alternative falls through too.

In most cases, identifying a clear BATNA will make you a better negotiator. It allows you to understand the stakes of a failed deal; those stakes could be modest, or they could be huge. It also allows you to negotiate based upon facts rather than fleeting emotions. Finally, a BATNA helps you remain grounded in your decision-making, as you know you have a backup plan.

Identifying a backup plan requires level-headed objective analysis, and sometimes stakeholders get too emotionally invested to think objectively. Pride, desire, or panic can all get in the way of honest self-assessment. If you try to determine BATNA for a large business, expect to pay a lot of money to consultants and accountants. You may have to plan through all manners of strategic and financial consistencies, and this will not come cheap.

Finally, it’s worth noting that just because you approach the bargaining table with a strong BATNA, this doesn’t necessarily protect you from a skilled negotiator on the other side of the table. You can still be manipulated by tough salespeople or smooth talkers, so keep your guard up. The BATNA will help you, but it isn’t a golden ticket to your desired outcome.

Learn more about negotiation strategies and communication skills from Career FBI hostage negotiator Chris Voss. Perfect tactical empathy, develop intentional body language, and get better results every day with the MasterClass Annual Membership.