Posted on Tuesday, November 3, 2015 in Communication & Interpersonal
Do You Know Your BATNA? (avoid losing out in negotiations)
Your BATNA is your Best Alternative To a Negotiated Agreement.
Lots of people don’t consider their BATNA. They see it as a self-fulfilling prophecy that if you consider your best alternative to a negotiated agreement you are predisposing the negotiation to fail. Professional negotiators know that this is just plain wrong!
Let’s consider a house buying scenario:
Your price objective may be to buy the house for £500,000.
Your absolute top budget may be £515,000.
Your BATNA may be to “Not buy the house if I can’t get the seller to agree to sell it for £515,000 or less”
That is obvious….but there are other factors that affect peoples’ decision making when they are negotiating:
- Emotional desire: I want that house!
- Emotional fear: If I don’t buy a house I’ll be homeless
- Emotional need to “win”: Someone else has made an offer; I won’t be beaten
- Practical desire: That house would be perfect because…..
- Practical fear: If I don’t buy a house I’ll have to rent somewhere (which is money down the drain), pay two lots of removal expenses and pay to put my things into storage.
- Status related desire: That is a house I’d be proud to invite friends to visit and stay
- Status related fear: Oh no, what will the children think if we have nowhere to live.
Having a very clear understanding of your BATNA takes away the danger of ending up paying over the odds, because the BATNA verbalizes the fact that if you can’t get what you aim for, you may be best suited to walking away rather than getting something that is inappropriate. By considering your BATNA well before the negotiation begins you are less likely to make a spur of the moment decision. And spur of the moment decisions often get you in trouble…
To paraphrase William Congreve:
To act in haste is to repent at leisure