BATNA, or Best Alternative to a Negotiated Agreement was coined by Fisher and Ury in their best selling book, Getting to Yes: Negotiating Agreement Without Giving In. Put another way, it is your No Agreement Alternative. What you will do if you are unable to reach an agreement through negotiation.
BATNA is different from what is commonly called your bottom line. A bottom line represents the worst outcome that you as a negotiator might accept. Negotiators use a bottom line to protect themselves against agreements where they give too much away or accept too little.
A bottom line is meant to be the final obstruction to giving in. A way to defend against the pressure, both external and internal, to agree to a resolution that is high unfavorable. A bottom line is not something that you think about much before. It is often driven by emotion.
In contrast a determining your BATNA is a rational and thoughtful process. You can use it as a yardstick to measure any and all proposals against. At the very least any agreement should better both sides' BATNAs. Any proposal that is worse than what you can do on your own should be rejected.
Fisher and Ury use a job search as an example. Let's say you are going to negotiate a job with Company A. What is your BATNA? That depends. Do you have another company, Company B that is also interested? If things don't work out with A can you turn to B? If not, what are your other options if things with Company A don't work out? Will you broaden your job search? Look at different kinds of jobs? Look in other cities? Start your own business? Do you have several alternatives? Which is the most attractive? The more complex the situation the greater the number of factors you have to consider?
When developing your BATNA you should:
Brainstorm a list of all available alternatives that you might consider should the negotiation fail;
Choose the most promising ones and expand them into practical and attainable alternatives;
Identify the best one and keep it as your fallback if the negotiation fails.
You always have an alternative. Sometimes it isn't very good but it is there.
As you can see, a good BATNA can be used as a point of leverage in a negotiation. If one side's BATNA is much better than the other's, the side with the better BATNA will probably prevail. If each has a good BATNA, it is possible that the negotiation could stalemate. A good BATNA is an insurance policy. Clearly defined it gives you, the negotiator, the advantage of breaking off the negotiation if it becomes apparent that a favorable result isn't possible. The willingness to walk away gives you the ability to take a more forceful stand when proposing options and tradeoffs.
Deciding whether or not to disclose your BATNA during the negotiation really boils down to how strong or attractive it is. It can be used as leverage and a source of power. If your BATNA is weak, it is better not to disclose, as it would likely be perceived as a point of weakness.
Too often negotiators don't invest the time and effort to understand and value their No Agreement Alternative. Research has shown that negotiators tend to overestimate their BATNA while investing too little time in researching their real options. Failure to do so can leave you open to:
Strong internal pressure to accept even an unfavorable agreement as you are not aware of any alternative;
Victim to being overly optimistic about a proposed agreement and failing to recognize associated costs.
You should also spend some of your preparation time considering the other side's No Agreement Alternatives. The more you can learn about the options available to them, the better prepared you will be. And in negotiation Information is Power!
Outside parties, like mediators, can help both sides assess and clarify their BATNAs through reality testing and costing. Reality testing generally takes the form of asking hard questions like: How do you know that? What do you think the other side would do? What do you think the outcome will be? Costing is similar. It is a systematic effort to determine the costs and benefits of the chosen course of action.
For more information about negotiation, click on any of the links below.