BATNA Focus
Understand and leverage your BATNA (Best Alternative to a Negotiated Agreement) to ensure you never accept a bad deal.
What is it?
Your BATNA (Best Alternative to a Negotiated Agreement) is your ultimate source of power at the negotiation table. It is the absolute best course of action you can take if talks break down and no agreement is reached. Knowing your BATNA prevents you from accepting terms that are too unfavorable and saves you from rejecting terms it would be in your interest to accept.
How it works
Invent a list of actions you might conceivably take if no agreement is reached.
Improve some of the more promising ideas and convert them into practical alternatives.
Select, tentatively, the one alternative that seems best. That is your BATNA.
Calculate your reservation value (walk-away point) based directly on your BATNA.
Real World Example
Scenario:
Negotiating a salary offer. You currently have another offer for $90k, but you prefer this company.
We are thrilled to offer you the position. The starting salary is $80,000.
I am really excited about this team, but the $80,000 is below what I can accept. I currently have a competing offer for $90,000. If you can match $90,000, I will sign with you right now.
When to use this strategy
Essential in every single negotiation, but explicitly critical when buying a car, negotiating severance, or dealing with monopolies.
Configure Scenario
Establish a strong Best Alternative. Never accept a deal worse than your walk-away point.
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