More vulnerable, and therefore more defensive.
BATNA ( Best alternative to negotiated agreement) is an important element of every single negotiation we engage in. Whether you are trying to earn a listing, close a deal or get your kid to clean his room, BATNA is one of the primary power sources and understanding yours, and theirs is key to a successful outcome.
In simple terms, BATNA is your plan B: what you are going to do if this negotiation doesn’t work out and what is your capacity to walk away.
For example – if you go into a listing presentation desperate for the listing because you don’t have much other business, you have low BATNA and it will affect how you interact with the seller in nuanced but important ways. You will likely do everything you can to pretend that you have more power than you do and while you might pull it off, it’s amazing how often the other side senses the power imbalance.
As trained negotiators, we are able to understand and often mitigate the negative impact of low BATNA but often our buyers and sellers aren’t so lucky. If we can recollect in the heat of a negotiation that low BATNA creates defensiveness in people, it gives us two benefits. First, we can manage ourselves and our clients to avoid our low BATNA leading us into bad decisions. Second, we can use defensiveness on the other side as a hint that their BATNA may be low.
Imagine that you are negotiating on behalf of your buyer to purchase a home that they would like to have but it’s not the only one they are interested in –( ie: they have good BATNA.) Now, imagine that the other side is being difficult to deal with. The agent tells you that her seller won’t budge another inch, and that they are frustrated with you and your buyer. You keep trying to build rapport and collaboration with the listing agent and while she is being professional, she isn’t really opening up to you and she comes across as edgy and anxious. What’s going on? In this situation, I would theorize that the sellers actually have low BATNA and that the listing agent isn’t doing a good job of managing that power deficit. If the seller had strong BATNA, they just wouldn’t engage with the negotiation. They would simply tell you – thanks but no thanks. But the fact that they are being difficult, defensive and creating a sense of anxiety is a key insight that they likely have low BATNA. You see, low BATNA makes us vulnerable and this vulnerability leads us to behave defensively. We know that we don’t want the other side to know our weaknesses and an untrained response is to behave defensively or aggressively.
So – if you see this behaviour on the other side of your negotiation, keep working to build trust and see if you can uncover a BATNA problem. Give them space to save face (next weeks blog) and continue working towards a successful negotiated agreement. And if you or your client have low BATNA, don’t give it away to the other side by acting defensively.