In his book Getting to Yes: Negotiating an Agreement Without Giving In, Roger Fisher addresses the challenges of negotiating when the other party has a stronger bargaining position.
Fisher acknowledges that no strategy can ensure victory when all leverage lies with the opposition. Just as one cannot grow lilies in a desert, certain realities in negotiations remain immutable.
However, he suggests that effective negotiation can achieve two primary objectives:
- Preventing you from accepting a disadvantageous deal; and
- Maximizing your assets’ benefits, ensuring the best possible outcome that aligns with your interests.
Let’s discuss each in turn.
Protecting Yourself
Negotiators often fear making regretful decisions, leading them to be overly accommodating. To guard against this, many set a “bottom line” or the least favorable result they’d be willing to accept.
Instead of relying solely on the bottom line, Fisher introduces the concept of BANTA (Best Alternative To a Negotiated Agreement), which is the most favorable action you’d take if negotiations fail.
By understanding your BANTA, you can gauge whether a proposed deal is better or worse than your alternative. As Fisher explains, understanding your BANTA is essential for three crucial reasons:
- It’s a flexible standard, allowing room for creative solutions.
- It prevents undue optimism or pessimism about potential alternatives.
- It provides a realistic backdrop against which to measure potential agreements.
However, many people neglect to define their BANTA before negotiating, either from over-optimism or an aversion to confronting potential failures, and, as such, fail to see win-win alternatives.
Fisher emphasizes that knowing your BANTA is crucial to negotiating effectively and suggests the idea of a “trip wire,” a less-than-ideal but still acceptable outcome that signals a need for caution.
If negotiations approach this boundary, it’s time to step back and reevaluate. This mechanism offers some advantages of a bottom line without its rigidity. Let’s explore that more in the next section.
Making the Most of Your Assets
While protecting oneself from undesirable agreements is vital, the real challenge lies in leveraging one’s assets to forge an optimal agreement. The crux of this power rests in the BANTA.
While many assume that negotiation power stems from tangible assets like wealth or political influence, the true measure of power lies in how appealing the alternative to a negotiated agreement is for each party.
Take, for instance, a wealthy tourist attempting to buy a brass pot from a vendor in Mumbai. Despite the tourist’s affluence, he’s at a negotiating disadvantage unless he’s aware of the price and availability of similar pots elsewhere.
This scenario illustrates that raw resources, like money, don’t directly translate to negotiating power. One must, therefore, understand and possibly develop their BANTA to convert these resources into actual power.
The power of the BANTA is also evident when comparing job interview scenarios. Individuals with multiple job offers are more empowered in salary negotiations than those without explorable alternatives.
This power dynamic applies to larger entities, too. For example, Fisher writes about a small town successfully negotiated a higher “goodwill” payment from a large company due to the town’s clear BANTA.
To truly harness the power of BANTA, we should:
- Invent a list of potential actions if no agreement is reached.
- Improve the best ideas, transforming them into viable alternatives; and
- Select the most promising alternative, solidifying your BANTA to bargain with.
By having a clear BANTA, we can approach negotiations with confidence and a sense of direction. This clarity empowers us to present our interests and terms more assertively. Fisher warns that whether or not we should reveal our BANTA to the opposing party depends on its attractiveness and the opponent’s perceptions.
Understanding the other party’s BANTA is equally crucial, as knowledge of their alternatives equips us for more strategic negotiations. If they seem overly optimistic about their BANTA, guiding them toward a realistic assessment can be beneficial. Conversely, if their BANTA seems unbeatable, we should consider actions to alter it, making negotiations more viable.
In some cases, both parties might find their respective BANTAs more appealing than any potential agreement. In such situations, a successful negotiation could result in both parties amicably deciding not to proceed with an agreement, recognizing that pursuing individual BANTAs would be in their best interests.
Conclusion
Developing a strong BANTA (Best Alternative To a Negotiated Agreement) is crucial for effective negotiations.
By protecting ourselves and understanding our assets’ power, we can confidently navigate negotiations and achieve optimal outcomes.