Be a Better Negotiator by Having a “BATNA”
Skip to content
Strategy Apr 20, 2022

Be a Better Negotiator by Having a “BATNA”

Understand where you’re going when you can’t get to yes.

two people shake hands in a building lobby

Yevgenia Nayberg

It’s something many negotiators agonize over.

Sometimes they don’t even think they have one.

It’s your BATNA, or your “best alternative to a negotiated agreement.” In other words, it’s what you’re left with if a given negotiation doesn’t work out, your default state.

Your BATNA is critical, as it determines your leverage in life’s most important negotiations, such as a job offer or the sale or purchase of a house, and in everyday dealings in business. If you feel pretty good about your BATNA, you’re more likely to “stick to your guns” and not negotiate as hard. If you’re not thrilled about your default situation, you may be much more willing to concede certain terms in the negotiation to make it work.

Despite the importance of the BATNA, people often are at a loss as to how to define it, improve it, flaunt it, or perhaps hide it. Many people enter negotiations under the self-limiting belief that they don’t have a BATNA. Others enter negotiation with a false sense of security. And even when negotiators have a well-formed BATNA, they’re often unsure how best to leverage it.

Following the dos and don’ts below will position you to understand, sharpen, and leverage your BATNA to reach the best outcome in any negotiation.

Don’t panic if you think you don’t have a BATNA.

If you only get one job offer or one bid on your house, you might not think you have a BATNA. In reality, you always have a BATNA and must make the distinction between having a BATNA and not liking your BATNA. For example, you may not wish to remain at your current job (your BATNA), but if a job offer you’ve received doesn’t include what you see as fair compensation, it may be best to keep looking for new opportunities, especially if it’s early in your search.

Do be proactive about your BATNA.

Think of your BATNA like a plant; it needs to be nurtured. If you’re seeking a job, make sure you’re networking and going to recruiting events, so you’ll be able to weigh a job offer in the context of other potential opportunities. If you’re looking for a supplier, talk to as many as possible that fit your broad criteria. Don’t be passive when it comes to developing your BATNA.

Don’t lie when asked about your BATNA in a negotiation.

It’s very likely the other party will ask about your BATNA. If they do, don’t claim to have offers you don’t actually have. That’s unethical and will likely ruin your credibility with the other party and, possibly, others. Instead, follow the advice below.

Do signal that you have a BATNA, without showing your whole hand.

The other party will probably ask you about your BATNA. Rather than revealing exact details, such as the compensation another employer has offered, say something like: “I have other options I’m intrigued by. But I prefer to talk about what it would take to work things out with you.” That keeps the focus on the current discussion and prospective relationship.

Don’t start a bidding war.

If you’re fortunate enough to have multiple offers, don’t play them off one another—although a negotiation where price is the main term, such as a home sale, may be an exception. One manager I know had his top-choice employment offer rescinded when the company discovered he was engaging them and another firm in a bidding war. As tempting as that kind of behavior may be, it’s shortsighted and can result in a worst-case outcome. Don’t go there.

Do share your top choice and target terms.

Telling your top-choice company—or supplier or other counterparty—they’re your Number One can promote goodwill and expedite the negotiation. If you tell them they’re your top choice, and they agree to your terms, accept the offer on the spot. If they don’t agree, tell them you need more time to “think it through,” and then do that, while weighing your BATNA, including other in-hand or likely offers.

Don’t forget to be gracious.

Appreciation matters. If a party makes you an offer, thank them genuinely for it. If you have more than one offer, remind yourself how fortunate you are to be in that position, and consider releasing some of them so you don’t waste people’s time. This also could open up space for other candidates.

I hope these dos and don’ts come in handy for your next negotiation, whatever it may be. I hope you get what you want. And if you can’t, then I hope your best alternative is truly the best one it can be

*

This article originally appeared in Quartz.

Featured Faculty

J. Jay Gerber Professor of Dispute Resolution & Organizations; Professor of Management & Organizations; Director of Kellogg Team and Group Research Center; Professor of Psychology, Weinberg College of Arts & Sciences (Courtesy)

Most Popular This Week
  1. Sitting Near a High-Performer Can Make You Better at Your Job
    “Spillover” from certain coworkers can boost our productivity—or jeopardize our employment.
    The spillover effect in offices impacts workers in close physical proximity.
  2. Will AI Kill Human Creativity?
    What Fake Drake tells us about what’s ahead.
    Rockstars await a job interview.
  3. Podcast: How to Discuss Poor Performance with Your Employee
    Giving negative feedback is not easy, but such critiques can be meaningful for both parties if you use the right roadmap. Get advice on this episode of The Insightful Leader.
  4. 2 Factors Will Determine How Much AI Transforms Our Economy
    They’ll also dictate how workers stand to fare.
    robot waiter serves couple in restaurant
  5. How Are Black–White Biracial People Perceived in Terms of Race?
    Understanding the answer—and why black and white Americans may percieve biracial people differently—is increasingly important in a multiracial society.
    How are biracial people perceived in terms of race
  6. The Psychological Factor That Helps Shape Our Moral Decision-Making
    We all have a preferred motivation style. When that aligns with how we’re approaching a specific goal, it can impact how ethical we are in sticky situations.
    a person puts donuts into a bag next to a sign that reads "limit one"
  7. Will AI Eventually Replace Doctors?
    Maybe not entirely. But the doctor–patient relationship is likely to change dramatically.
    doctors offices in small nodules
  8. What’s at Stake in the Debt-Ceiling Standoff?
    Defaulting would be an unmitigated disaster, quickly felt by ordinary Americans.
    two groups of politicians negotiate while dangling upside down from the ceiling of a room
  9. How to Manage a Disengaged Employee—and Get Them Excited about Work Again
    Don’t give up on checked-out team members. Try these strategies instead.
    CEO cheering on team with pom-poms
  10. 5 Tips for Growing as a Leader without Burning Yourself Out
    A leadership coach and former CEO on how to take a holistic approach to your career.
    father picking up kids from school
  11. One Key to a Happy Marriage? A Joint Bank Account.
    Merging finances helps newlyweds align their financial goals and avoid scorekeeping.
    married couple standing at bank teller's window
  12. Why Do Some People Succeed after Failing, While Others Continue to Flounder?
    A new study dispels some of the mystery behind success after failure.
    Scientists build a staircase from paper
  13. Which Form of Government Is Best?
    Democracies may not outlast dictatorships, but they adapt better.
    Is democracy the best form of government?
  14. What Went Wrong at AIG?
    Unpacking the insurance giant's collapse during the 2008 financial crisis.
    What went wrong during the AIG financial crisis?
  15. Daughters’ Math Scores Suffer When They Grow Up in a Family That’s Biased Towards Sons
    Parents, your children are taking their cues about gender roles from you.
    Parents' belief in traditional gender roles can affect daughters' math performance.
  16. Take 5: Research-Backed Tips for Scheduling Your Day
    Kellogg faculty offer ideas for working smarter and not harder.
    A to-do list with easy and hard tasks
  17. Leave My Brand Alone
    What happens when the brands we favor come under attack?
  18. The Second-Mover Advantage
    A primer on how late-entering companies can compete with pioneers.
  19. Take 5: Yikes! When Unintended Consequences Strike
    Good intentions don’t always mean good results. Here’s why humility, and a lot of monitoring, are so important when making big changes.
    People pass an e-cigarette billboard
More in Strategy