We spend our entire lives negotiating, and for the most part we hate it.  I, personally, hate negotiating for a variety of reasons.  For one, it always seems combative and I dislike conflict.  Related, I always fear that I’m being taken advantage of or that I’m leaving something on the table.  And finally, if I want to avoid those first two feelings, I need to do a lot of homework.  Since we’ve already established that I’m a basically lazy person, it is understandable that I dislike negotiating.

You can’t get away from it, though.  You negotiate terms of a job.  You negotiate to buy a car.  You negotiate ALL THE TIME with your partner on everything, including “little” daily things like chores around the house, what’s for dinner, and what you watch on TV.  Back in the day when I used to travel a lot for business, I regularly paged through those inflight magazines they used to put in seatback pockets.  Those magazines were riddled with advertisements geared to the business traveler and invariably there were several on negotiating skills.  A famous one had in bold letters across the top:  You don’t get what you ask for; you get what you negotiate.  The inference, of course, is that blindly just asking for what you wanted or needed was a fool’s errand.  You must get confrontational and NEGOTIATE—take them for all they’ve got!  It’s not surprising, then, that most people treat negotiating like a war game.  Or just a war.  It is about winning.  It is about getting what you want and making the other guy give up more than he really wanted to give up.  And then I learned about BATNA.  The concept is not revelatory so much as being intentional about applying it.

BATNA is an acronym for Best Alternative to a Negotiated Agreement.  Your BATNA is the minimum you will accept.  Your walkaway point.  It’s what you will have if you can’t come to an agreement with the other party.  By definition, you’re ok with that outcome.  Maybe not happy, but you can live with it.  Let’s say you are at a street fair and you walk up to a vendor selling windchimes.  You love windchimes.  Who doesn’t?  You select a set, look at the price tag and think, “Yeah, no.  Too expensive.”  You have a price point in your head.  If the seller agrees to it, you have yourself a new set of windchimes.  If not, you walk away.  Your BATNA, in this case, is “I don’t have a new set of windchimes.”  That’s acceptable to you.  Now imagine that your best friend, who has a big birthday coming up, tells you about this FABULOUS set of wind chimes she saw at a street fair a while back and she is kicking herself for not buying them.  She had even snapped a picture and sent it to you and you could see it was the SAME vendor and SAME set of windchimes.  Now your BATNA is different.  You REALLY want to get those windchimes.  You will probably accept a higher price because the value to you (to please your friend) is much higher.

I learned about the concept of BATNA at a mini-MBA intensive short course that was geared toward R&D managers.  It was revelatory for all of us.  Now there was a logical approach to negotiating that we could navigate and it was not a war simulation.  You “just” had to understand your BATNA and the BATNA of the person you were negotiating with!  If there was an overlap, then you could find agreement.  If not, you both accepted your respective BATNAs and moved on.  Simple, right?  Well, we’re only halfway through the essay so of course it’s not that simple!

Let’s start with understanding your own BATNA.  Sometimes it can indeed be simple.  When I bought my last car, I had to decide if I was going to trade in my old car with the dealer or sell it separately.  I didn’t want to deal with a private sale, so I went to a couple of those places that buy your car and got a quote.  Both gave me EXACTLY the same quote.  After I had negotiated the price of my new car (that’s another, longer story) we discussed a trade.  I had decided that if they matched the quotes I had gotten, I would trade in my car with them.  Why?  My BATNA was not about maximizing the value I could get from my old car.  It was about minimizing hassle.  I’m sure I could have gotten significantly more money if I pursued a private sale, but I didn’t want the bother.  If the dealer wouldn’t match the other offers, then it was minimal additional hassle for me to go to one of those car buying places.  If the dealer DID match their offer, then I would get the same monetary value with even LESS hassle.  They matched.  I drove my new car home that day. 

Other times, knowing your BATNA is not so straightforward and this is why being intentional about understanding your BATNA is so important.  In the example above, I could have tried insisting on a retail price for my trade because I might have felt that I should get the Blue Book price.  Anyone who is a car dealer has, I’m sure, dealt with the “but my car is worth so much more than that” customer.  I didn’t do that because I understood the trade-off between the price I could get for my car and the hassle associated with getting that price and I intentionally chose to value low hassle over high price.  Deciding on a new job or moving to a new home are good examples of more complex BATNA calculations.  There are a lot more factors to consider than just the salary or the housing costs.  There are many, many factors in determining your BATNA that have to do with what truly makes you happy or at least content.  Teasing out those factors requires a really authentic look at yourself and honestly accepting what you know works for you and what doesn’t.  How many of us have made unfortunately bad choices because we established our BATNA based on what we wished represented our true desires instead of accepting what we really want?  That doesn’t mean you can’t make a bold choice aimed at broadening who you are, but you need to make that choice purposefully and accept the work it will take to make that happen.  If you are not purposeful about it, you end up putting yourself in the situation and hoping that you will suddenly find yourself happy in a context you’ve never been happy in before.  How well does that usually work?  This theme of authenticity is so critical!  Yes, Brené Brown seems to work her way into all of my essays.

The other, even tougher, part of the BATNA equation is understanding the BATNA of the negotiating party.  In addition to forcing yourself to take an authentic look at the situation from your own perspective, you now need to put yourself in the shoes of the other party and tease out what is truly important to THEM.  In a business setting, this involves sleuthing around the other party’s business model and financial position.  If you are negotiating project deadlines with a co-worker from a different function, you have a much better chance of finding agreement if you take the time to understand their business function and how their needs intersect with yours.  If your idea of negotiating a timeline is, “This is when I need it.  Period,” then don’t expect a lot of cooperation. 

While business negotiating often involves personal agendas, negotiating with the people in your private life is ALL about personal agendas.  When you are negotiating a vacation with your spouse, it involves understanding what they like to do and not do, as well as knowing the range of their travel preferences and what their breaking points are.  Surely there will be negotiating room between your two BATNAs.  If not, you have a different problem.  Understanding someone’s BATNA is synonymous with expressing empathy.  And expressing empathy means being able to be non-judgmental and accepting that someone else’s preferences are just as valid as your own.  It’s pretty easy, though, to forget about diversity of preference when we’re negotiating with someone.  Our way is the way that makes the most sense for us, therefore it should be the right way for everyone, right?  Your BATNA should never be everything you could possibly want.  Compromise is not a dirty word if you can be honest about your BATNA and keep an open mind about someone else’s.  So, the next time you’re negotiating with someone or arguing righteously about some topic, take a moment to step back and ask not only “what is my own BATNA” but also “what’s your BATNA”.  You just might find some common ground.