Avoid this in any negotiation

Uncategorized Aug 24, 2022

If you've gone through any negotiation training, you've probably been introduced to the concept of BATNA - the best alternative to a negotiated agreement. I'm sorry you've learned such a concept. You've probably left a lot of money on the table because of it. The one thing you should never attempt to figure out is yours or their BATNA.

What is BATNA?

BATNA is a predator's greatest tool, and it's one they never have to employ themselves. It's your Best Alternative to a Negotiated Agreement. The problem with BATNA is it is full of assumptions and guesses that you make. The adversary will let you shoot yourself in the foot and smile all the way to the bank. BATNA comes from a fixed mindset and believes compromise must be made in any transaction. It's a faulty way to negotiate and one that is costing you money. It also postulates that you and the adversary will act with logic. That is wrong. All decisions are made emotionally, and then we use logic to rationalize our decisions. You and the adversary will make decisions based on emotion, not logic.

Too Many Variables

If you go through the gyrations of determining your BATNA and the BATNA of your adversary, there are many variables you'll have to track. It has you spend a lot of time and energy thinking about possible outcomes of a game that has yet to begin. You will need six basic variables or assumptions to make your BATNA. They are:

  1. The objective reality you face.
  2. Your subjective assessment of the reality you face.
  3. Your subjective assessment of the reality your negotiation counterpart faces.
  4. The objective reality your negotiation counterpart faces.
  5. Your negotiation counterpart's subjective assessment of the reality he faces.
  6. Your negotiation counterpart's subjective assessment of the reality you face. 

Items #3, 5, and 6 are all assumptions you must make. You have to convince yourself you know what the adversary is thinking and feeling. I've been married to the same woman for over twenty years, and one might assume I would know what she is thinking. Most of the time, I can predict her behavior and choices. However, there are still times I'm caught off guard. If my wife sometimes surprises me, it's foolish to think I can predict how someone I barely know will behave. How can you have any chance of knowing a business contact as well as a spouse? If you have figured out how to get inside someone's head and know what they're thinking, please let me know how you do it.

 There are just too many variables to manage. If you've seen the Netflix series The Queen's Gambit, you have a good idea of what will be going on in your head as you try to manage all the possible variable outcomes. I don't know about you, but I prefer to keep things uncomplicated. I focus on my mission and purpose and the problems the adversary has. I can get the deal done if I have a solution to their problem while conforming to my mission and purpose. If I don't have a solution, I keep asking to build their vision, discover what I might be missing, or politely exit the negotiation. 



Lack of alternatives

Suppose you're trying to get a contract with a new client or vendor. What alternatives do you have if you don't get what you want in a negotiation? You get the status quo since you do not have a business relationship with them. What alternatives do you have if you are trying to renew an agreement with a client? You either have them as a client, or you don't. You either get what you want, or you don't. How good will you feel if you don't get what you want? Probably not very good, but you'll use logic to convince yourself that you made the right decision to compromise. You'll soothe yourself with reasons to justify your decisions. You do that because you bought into the belief you had more than two options. 

Dependence on intuition & destructive power plays

BATNA requires you to rely heavily on your intuition. You're encouraged to assume you know the adversary's BATNA. You've probably been told the party with the stronger BATNA has leverage. Adhering to such a belief is a slippery slope towards deception and deceit, a "smoke and mirrors" game. You begin to play games and try to fake the adversary out and get them to believe something that isn't true. You do what you can to convince them that your BATNA is almost as good as doing a deal with them. What if, instead of playing games, you spent that energy on discovering the problems they are facing and coming up with solutions? I bet you'd reach an agreement faster and do something that helps the adversary.

A BATNA-dominated approach to negotiation is about power: it is used to gain concessions, induce compromise, and force compliance. Relying on a BATNA in negotiations can easily be perceived as bullying or give the impression that one or more parties are stuck in a 'my way or the highway mindset." When you go into a negotiation with a 'walk-away' option in mind, it's all too easy – and sometimes even recommended – to use your BATNA as negotiating leverage. If you use your options to beat up the other party, it's like going on a date and mentioning all the other people you could go out with; the relationship will probably not get far.

Fear of negotiation

If you believe that you will not be able to negotiate an effective deal without a strong BATNA, you are in trouble. When you're faced with an undesirable or non-existent walk-away alternative, you're in trouble. If you buy into both beliefs, you're really in trouble. Frequently, a weak BATNA can lead to the delay of important negotiations or avoidance of these negotiations altogether. Not only does this result in lost opportunities, but it can also prolong and exacerbate conflicts. Let me say that again: if you believe in BATNA and think you have a weak one, you will not engage in the negotiations you need to. You will not try to solve the problems you're faced with.

Preparing for failure

By its very nature, a BATNA describes what you will do if a negotiation fails. When you prepare a BATNA, you are preparing for failure. This presents numerous problems. First, the alternative of walking away does not exist in many situations of conflict – the other options we have are likely to resolve the conflict or minimize and deny it. In addition, a preoccupation with BATNAs of alternatives makes it hard to fully commit to completing a negotiation or resolving a conflict. Instead of focusing on BATNA, focus on your mission and purpose. Show the adversary what you bring to the table for their benefit.

They can have a BATNA if they want

It's okay if the adversary has a BATNA. It's okay if they try to use their BATNA against you. They only do that when trying to induce fear in you and your team. When you stick to your mission and purpose, the adversary will see their BATNA might be an alternative, but it isn't a comparable or desirable alternative.

Avoid at all costs focusing on developing your BATNA. The status quo is your best alternative. If you don't have an agreement with the adversary now, how does figuring out how low you can go help your position? Instead, focus on your mission and purpose. Know your features and benefits. Ask vision-building questions. Solve their real problems. If you do those things, you will have a successful conclusion to the negotiation and will help the adversary.

Like any human event, it takes practice and an excellent coach to help take your performance to the next level. I'm here to help you do just that. Contact me today to see how I can help you succeed in your negotiations.

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