The most essential thing before you negotiate.

batna Negotiation skillsNegotiation is not played as a game, where you either win or lose. It’s a complex process for sure. You want more value out of what you give and the other party too has a similar motive. And when both of us try to get the maximum out of the other while providing the minimum we can (in short if both of us are greedy), either the negotiation dies or the relationship. Hence, every negotiation is complex. Complex; because it involves various alternatives.

Take an example. You want to buy a house to live. Your budget is say 20,000$ and are looking for a fixed number of traits in that house. You finally get one, but the seller is looking for 25,000 instead of your 20 K (20,000). You think you will start price haggling and try to close the deal somewhere in 22 K. All’s well! And you proceed for the final showdown. At the meeting you are offered a car free with the house on a certain price say 25 K, or insurance at 23 K, or the price of 21 K with some maintenance work to be borne by you. Possibilities are many and probability that you can’t decide on the spot is high. You ask for a day or two to decide. Now all offers seem good by some angle and bad at some angle. You can take this time before buying a house but what happens when you are out to buy a pair of jeans or anything which has to be bought on the spot? Things don’t seem to go that easy, right? The issue here is with your BATNA.

The acronym BATNA was coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating without Giving In.  It stands for ‘The Best Alternative To a Negotiated Argument’. To simply put BATNA is the end sum of all giveaways and takeaways that you are ready to accept for any deal. It’s the bar (of cost vs. return) that you place on the deal. The bar which when met will signify that you are ready to accept the negotiation done and close the deal. If you get a deal which has a bar of higher return than your BATNA you simply accept it and if not, reject it.

Easier said than done, most of us don’t even plan before negotiating. We won’t agree, but often we don’t know when to accept the deal or when to leave the offer and move ahead. Planning might take just a couple of minutes of relaxed thinking before you move for negotiating the deal, but who has that time? At the end of it, all we can conclude is – Failing to plan is planning to fail!

Also do remember BATNA is not the bottom line or the so called worst case scenario. It’s your healthy bar where you take the offer satisfactorily. If you consider it as the bottom-line you always will end up with low value, high cost deals. What you are ready to compromise and what you will ensure that you get back, all forms a part of your BATNA.

So here’s a quick small BATNA checklist to empower your negotiation.

  1. Plan. And plan for all the alternatives possible.
  2. Estimate and Write down your BATNA on a paper.
  3. Alternatives – There are many alternatives possible. Some are good but how can you counter offer the bad ones?
  4. Their BATNA – You have planned your BATNA; try to gauge their BATNA too. That’s the key to a lucrative negotiation.
  5. Outcomes – What are your best possible outcomes and how can you convince the other party to align with most of them without conflict.
  6. Be Reasonable – Have a reasonable BATNA. Greed might work at times, but a negotiation won at the cost of a relationship lost is a bad deal.
  7. Never reveal your BATNA first. There might be much more for you than you think.
  8. Give and Take. There will always be certain giveaways in a complex negotiation that don’t cost you much and certain takeaways for you that don’t cost the other party. If you know these well you can drive the negotiation.
  9. They don’t have it – If they don’t have, help the other party to set their BATNA. By this you command the situation.
  10. The End – Finally know when to persist with the negotiation and when to call it off.

Remember (and let me repeat) the golden rule.

Failing to Plan = Planning to Fail

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