In negotiation, as in all areas of life, having a strong best alternative gives you great power. Alternatively, the lack of a good alternative results in relative weakness.
Negotiators speak frequently about BATNA – the Best Alternative to a Negotiated Agreement. In plain language, this refers to what you are truly going to do if the negotiation being worked on does not pan out. “If this deal falls through,” I often ask students, “what will you really do instead?” Take caution, though, since the question should not be answered until you have done your homework thoroughly and vigorously regarding all the possibilities.
At any given time, you have many different alternatives. For example, as college seniors are quick to point out, there are a hundred things to do instead of going to graduate school. Among these are traveling the world, getting a job, having a baby, applying to the Peace Corps, living rent free in the parents’ basement, becoming an environmental activist, or moving to San Francisco. It is a highly attractive list that leaves me wondering why anyone ever bothers with grad school. There is a cognitive trap here, though; one cannot do everything on the list of alternatives. Move to S.F or join the Peace Corp. Travel the world or watch TV in the basement. Get a job or stay home with a baby. It all involves making choices, weighing various preferences, and balancing interests. Usually, we can do anything we want but we can’t do everything we want. And here is where the concept of BATNA becomes so useful. Only after we have carefully weighted everything on life’s balance scales can we fruitfully make use of the “what will you do?” question. Once all the appropriate consideration has occurred, the pieces fall into place. At that point, for the first time, your BATNA and your answer to the “what will you do if” question become one and the same.
Of course, as you may well intuit, your BATNA changes frequently. Whether because of deliberate moves on your part,
action taken by others, or happenstance, your best alternative is in flux throughout the negotiation process. Since a strong BATNA gives greater power, you should be working incessantly to improve it. Continuous efforts to strengthen one’s BATNA are among the most effective things a negotiator can do to improve her situation.
Any good book on negotiating will include explanation and lots of good examples regarding how to strengthen your BATNA. You should pick one up soon and read it carefully.