Goals and Objectives set the top of your negotiating range. Best Alternatives sets the floor of the range.
The floor of your negotiation is governed by your best possible alternative. A more accurate description is “least worst alternative” – since this can be pretty unattractive. Best Alternatives might be bankruptcy, shutting a factory, and/or unemployment. Or it may be as simple as going to a different store on the same block.
Don’t overcomplicate your analysis. This “best alternative” is often presented in terms of BATNA, BATANA (best alternative to a negotiated agreement) or even BATTN (best alternative to this agreement). I prefer to think of it in terms of Plan B. What is your Plan B in case this deal doesn’t work out. That’s your best alternative.
- In the short term there’s not much you can do but accept your position and build it in to your plan. You can bluff and even lie, but that’s not much of a plan.
- In the medium term you have time to improve your negotiating position by improving your Plan B. This often involves finding new counter-parties or developing the resources you need from another source.
- In the long term you have the time and resources to improve your companies technology, capabilities, IP, knowledge bank and network.
Best Alternatives = your power balance.
This is where you get your power — or face your weakness. The more options you have, the stronger your position. When it comes to BATNA, preparation is everything. If you walk into a meeting with an attractive Plan B, then you have power. If you walk into a meeting with nothing but a vague threat to go out and find a Plan B if you have to, then you sound vulnerable.
For professional negotiators, the big question is “What’s your alternative to this deal?” Then you need to give some thought to HIS BATNA, and what his alternatives to YOU are?