Negotiation Leverage and the Power of Plan B

by Jeff Jimerson | May 19th, 2010
Tips-n-Tools

So I’m taking this graduate course on negotiation. Scratch that. I just FINISHED a course on negotiation, as in yesterday at 3:59:14pm — the moment I emailed the final research paper to my professor. (It was due at 4pm, so technically I was forty-six seconds early!)

In my paper I wrote about how the outcome of any negotiation hinges on both leverage and power. To become a successful negotiator one must first understand the similarities between leverage and power as well as how their roles differ in the negotiation process. This involves learning how confidence affects the amount of leverage and power each party brings to the negotiating table.

I’ll spare you a copy/paste of the entire paper, but thought I’d share a few thoughts on something called a BATNA—what it is, and how having one will give you confidence (and power) when negotiating.

I have to admit, before enrolling in the course I had never heard of the term BATNA, or Best Alternative To A Negotiated Agreement. But the concept is simple: it’s whatever you’ve got in your back pocket if the negotiation goes south. A BATNA is your Plan B.

Whether you’re shopping for a new car or a new job, knowing your best alternative to taking the deal is critical for walking away happy. Why? Because having a plan B gives you the confidence to say “no thanks” if you need to. When you know you’ve got another good option (or two), there won’t be feelings of desperation or settling for less. Sometimes walking away happy means leaving the deal on the table.

And while finding your BATNA is important, don’t stop there. Do what you can to find your opponent’s, too. Remember this: whoever has the best BATNA has the most leverage in the negotiation. So do some detective work. Ask questions. If the other party is being stingy with information it could be a sign that their BATNA is weak. Or, if you have a good poker face, they may just think you have a stronger alternative to the deal. Either way, the advantage is yours.

And if not, well, there’s always plan B. Or at least there should be.