Keep your ego in check. After all the work you put into building your BATNA, you may feel pretty smug. Studies have shown that it is too human to overestimate the strength of one`s own BATNA while underestimating the strength of BATNA on the other side. A strong BATNA can also help a party understand that it has an attractive alternative to the agreement and that it can move away from a tempting offer. Company A, for example, makes a US$20 million takeover bid to Company B. Nevertheless, Company B thinks they are worth $30 million in valuation. Company B quickly declined the offer. However, what Company B has not taken into account is increasing competition in the sector and stricter rules, all of which will limit growth in the coming year and reduce its valuation. If Company B had taken the time to include these factors in the current assessment and had clearly followed the four batna steps, including #2, assessing the alternative to staying the course in a challenging business environment, management could have been persuaded to accept it. BATNas are not always easily recognizable. Fisher and Ury outline a simple process to determine your BATNA: The lesson: Instead of assuming that the deal displayed on the table matches point by point to your BATNA, translate your BATNA to fully understand what it means for the current negotiations. For more information, see Know Your BATNA – The Power of Information in Negotiation.
The BATNA illustration clearly shows, as the saying goes: “Don`t put all your eggs in one basket.” Today, many managers use BATNA in negotiations instead of having it as a last resource. The examples presented are on the ground and sufficiently illustrate how problems can be developed with BATNA. The appeal of EATNA often leads to a failure of last-minute negotiations, especially when many parties are involved. Disputes can negotiate for months or even years and ultimately develop an agreement that they deem acceptable to all. But at the end of the day, all parties must carefully consider the final result and decide: “Is this better than all my alternatives?” Only if all parties say “yes” can the agreement be reached.