To avoid conflicts and to help resolve disputes in a negotiation or a mediation it is important to know your Best Alternative to a Negotiated Agreement (BATNA) and to consider the other party’s BATNA in order to work to resolve the situation. Before entering into the situation knowing that if your BATNA is not met you will simply walk away gives you room to exercise your own power. Knowing that you have tried your best to work with the other side, but what has been offered will not be acceptable so you need to move on This article explores how knowing your BATNA and what to consider can help you in a negotiation. It is important to understand why negotiations fail.

The games people play

If everyone were ethical, open minded, and honest what a difference that would make in a negotiation. However, that is not the way of human nature. Here are a couple of items to consider.

Sunk costs

If you have spent a lot of time, money, energy, and other resources to try and make this deal work, you may be reluctant to walk away. It may feel like having some deal, or any kind of deal is better than no deal at all. Psychologically a need to recover sunk costs may override what makes sense. You may want to save face to justify your time and money spent on the negotiation with higher ups so that it was not a waste of time. However, walking away in the end may clearly be in your best interest. Others may point out how much time, money, and resources you have expended as a way to coax you back into this bad deal. 

Concealment of a bad deal

One party may have insight, knowledge, or other information whereby they know this is a bad deal for you and not share that with you. You may think you have a great deal, but what you do not know can really hurt you. For example, if they know of another agreement with another vendor that will negatively impact you and potentially put you out of business and they do not share that, you lose. Or with another example if you take on something as a loss leader hoping for more business and they know this is a onetime deal, you lose.

Failure or an appropriate reaction?

The word failure

Think of the terminology you use with respect an unsuccessful negotiation. It was not an unacceptable result. Rather, it was a “failure.”  It was a failed attempt. It was a failed negotiation. You failed to come to an agreement with the other party. May this imply you were or are a failure. The connotations are there. In mediation it is up to the parties to reach an agreement. The mediator facilitates the process. If the parties “fail” to reach an agreement, an alternative expression is offered that both parties were able to present their position, the facts, the issues, the emotions around each issue, and their interests. Both parties were heard. Given the process this may have positive impacts going forward as the parties reflect on the situation.

Is an impasse bad?

The term impasse is defined as

a situation in which no progress is possible, especially because of disagreement; a deadlock.

"the current political impasse"

or

 a predicament affording no obvious escape. b : deadlock.

Neither definition sounds good. Each implies that some or both parties were entrenched in their position and that there was no way the parties could come to an agreement. In this us versus them perspective the other party was simply being unreasonable  given the facts. When this happens, this may be the time to bring on board a skilled mediator to explore the situation with both parties to see if indeed this is the situation. A third party observation from a neutral party that can build trust with both parties separately may be able to find a way to help the parties going forward. If the initial meeting with both parties clearly demonstrates that mediation is not plausible, then a skilled, independent mediator will bring this to light and there will not be a mediation. An arbitration or litigation may be the best alternative in this case. However, often the mediator is able to find interests that were not disclosed that may offer an opportunity to the process going forward. If you want to explore saving time, money, and resources compared to litigation a skilled mediator may be able to help.

Collaboration helps

When you go it alone, me, myself, and I to help you define the problem, develop alternatives, determine the impacts, evaluate the impacts, and select a solution. That is a lot for one person to address especially in an emotional and complex negotiation. Now consider adding someone else that you trust to the negotiation. When you collaborate with that person or persons with various areas of expertise, they can help you see things that you previously did not see. Another set of eyes, or an expert’s perspective may provide considerable insight.

Skilled help

Besides another set of eyes, or a person with expertise in a technical area, bringing on board a skilled negotiator to assist you with the process may be extremely helpful. A skilled negotiator on your issues that has expertise may offer you additional insights. For example, there is your position. There is their position. You have hopefully determined your BATNA. Often a skilled negotiator may help you develop other alternative positions between your position and BATNA. For example, in discussions with the IRS. I often recommend at least three computations of alternative positions ahead of time in order to help the IRS agent consider alternative perspectives. These can be offered in descending order or can be modified based on the nature of the discussions to work towards an amenable solution and closure with the IRS. Knowing how and when to make concessions is key.

In summary, know your BATNA and estimate their BATNA, consider sunk costs sunk, be aware of concealment of potentially a bad deal, consider “failure” or an “impasse” as a way of considering an alternative opportunity, consider collaboration with others to help you sort things out, and finally consider a skilled mediator or negotiator to assist you with the process.