Negotiations Training

If You Can't Come to Agreement:
Knowing Your Alternatives

You've been sitting at the negotiating table for the past twelve hours... save for a few bathroom breaks and a timeout to eat a stale bagel with room temperature cream cheese, you just can't seem to make any progress. There are a few key items where neither you nor the other party can come to agreement. Your interests just seem too far apart and it doesn't seem likely that either one of you is going to budge. Personally, you don't want to give up. You feel like the relationship with the other party is just too important and you are focused on trying to find a solution.

Following a quick bathroom timeout, you walk back into the conference room and sit back down at the negotiating table.

You: "Well... that's much better. Now, where were we? I think we were trying to understand a bit more about your position on the jurisdiction. If I understand you correctly, you..."

The Other Party: "Before you go any further... I really do appreciate all the effort you have put into our discussion."

You: "Of course... I'm glad we're still trying to sort this out."

The Other Party: "Well, that's just it. I don't think we're going to reach common ground on these last clauses. We've decided to call off the negotiation and start looking at another alternative."

You: *gulp!* "Oh..."

Wow. You didn't see that coming. Well... at least you had prepared a contingency plan for this type of situation. Right? You didn't? *gulp* "Oh..."

Let's face it... failed negotiations happen all the time. There are times when each party has interests and desires that are so far apart that no amount of talking with lead to a negotiated agreement. So, just like no one should step into a negotiation without knowing what they want to accomplish, no one should step into a negotiation without having appraised the consequences of failing to reach agreement. This is the process of establishing a "Best Alternative to a Negotiated Agreement" and a "Worst Alternative to a Negotiated Agreement". For simplicity's sake, let's use BATNA and WATNA for short.

The BATNA is simple... if you and the other party can come to an agreement, what are the best alternatives to pursue? What other solutions can you pursue? Are there other parties who can do what this party was planning to do? Are there other ways to accomplish what you were trying to accomplish? Take the time to come up with a list of these different alternatives. These aren't necessarily bad things. They compromise your fallback position or positions. Knowing these alternatives, you have a clear understanding of what can or will be done should you need to walk away from a negotiation. It helps to understand that other party's BATNA, as well, so that you can have a realistic expectation of the negotiation. If you're not the only game in town and other companies can do what you were proposing to do, this will influence your discussions.

The WATNA, while still simple, is not quite as pleasant to think about. This is the worst-case scenario. Your negotiations have fallen apart and the only supplier who can provide you with an important product component doesn't want to talk anymore. Now what do you do? You need to understand the worst possible outcome to know how far you can and can't go in a negotiation. If failing to negotiate an agreement leads to a company shutting down, perhaps you should readjust your aspirations and focus on getting things resolved. Knowing your WATNA can make or break you... have both your BATNA and WATNA established before meeting with the other party.