Penelope Trunk at Brazen Careerist gives an excellent example of negotiation in the writer's market, complete with BATNA analysis.
http://blog.penelopetrunk.com/2007/06/18/how-to-negotiate-when-you-have-nothing-to-leverage/
Overall, I like this blog. I find myself disagreeing with the authors (she often has guest writers) pretty frequently, but in an I-can-see-their-point way.
Showing posts with label BATNA. Show all posts
Showing posts with label BATNA. Show all posts
Monday, June 18, 2007
Saturday, June 9, 2007
Negotiation Part 3 - Think Win-win
If you've read my previous negotiation posts (here and here), it's easy to get the impression that I see negotiation as an adversarial encounter. The truth is negotiation does not exist in a vacuum, but within the context of a relationship.
The four types of negotiations are
low stakes, low relationship:
This is something like two strangers deciding who will enter an elevator first. There's no relationship at stake, and nobody particularly cares about the outcome. Just decide these quickly and move on.
low stakes, high relationship:
This is where you are dealing with someone who you want to maintain a connection with (or at least not annoy), and an outcome that doesn't matter that much. An example is who would pick up the tab for lunch (unless you've got expensive tastes). Anything that seems fair to both parties is fine here.
High stakes, low relationship:
This relationship may be short-term to nonexistent, such as selling a house. In these cases, getting the best possible outcome (ethically) will be the priority. You can pull out all the stops here, almost.
High stakes, high relationship:
These are the most difficult types of negotiations. The relationship is as important as the outcome, but both will have a large impact on your future. If you are discussing your starting salary with a prospective employer, it does not make sense to poison your relationship over a few dollars. In cases like this, it is important for both parties feel like they have been treated fairly by the other.
One concept that helps in these scenarios is win-win. In other words: how can both sides get as much of what they want at the same time? The key here is to focus on what matters most to each group. The prospective employer may be willing to pay more if the candidate can start immediately. A candidate may be willing to take less pay for a more flexible schedule. These kinds of trade-offs have to incorporate something other than the pay, so they work best when there are multiple variables to talk about. It's even more important to know yourself and your opponent as much as possible, beyond the BATNA.
The four types of negotiations are
low stakes, low relationship:
This is something like two strangers deciding who will enter an elevator first. There's no relationship at stake, and nobody particularly cares about the outcome. Just decide these quickly and move on.
low stakes, high relationship:
This is where you are dealing with someone who you want to maintain a connection with (or at least not annoy), and an outcome that doesn't matter that much. An example is who would pick up the tab for lunch (unless you've got expensive tastes). Anything that seems fair to both parties is fine here.
High stakes, low relationship:
This relationship may be short-term to nonexistent, such as selling a house. In these cases, getting the best possible outcome (ethically) will be the priority. You can pull out all the stops here, almost.
High stakes, high relationship:
These are the most difficult types of negotiations. The relationship is as important as the outcome, but both will have a large impact on your future. If you are discussing your starting salary with a prospective employer, it does not make sense to poison your relationship over a few dollars. In cases like this, it is important for both parties feel like they have been treated fairly by the other.
One concept that helps in these scenarios is win-win. In other words: how can both sides get as much of what they want at the same time? The key here is to focus on what matters most to each group. The prospective employer may be willing to pay more if the candidate can start immediately. A candidate may be willing to take less pay for a more flexible schedule. These kinds of trade-offs have to incorporate something other than the pay, so they work best when there are multiple variables to talk about. It's even more important to know yourself and your opponent as much as possible, beyond the BATNA.
Thursday, June 7, 2007
Negotiation Part 1 - The BATNA
Of all the classes I've taken, the one I consider the most useful is one on Negotiations. I find myself using the principles on a near-daily basis and interpreting a lot of the actions I see in others as negotiation tactics. If anyone out there is taking business classes at DePaul, I recommend it highly.
One of the core principles in negotiation is the Best Alternative To a Negotiated Agreement, or BATNA. This term was coined by Robert Fisher and Bill Ury and used in their book Getting to Yes: Negotiating Agreement Without Giving In. The concept is straightforward, your BATNA is your best outcome if you do not come to an agreement in this negotiation, or rather, what you get if you walk away.
Knowing your BATNA and your opponent's BATNA (I use the term loosely, the person you are negotiating with shouldn't normally be considered a foe to be conquered) lets you know the best and worst acceptable outcomes.
For example, If you are selling your house and you have an offer from another buyer for $150K, that is your BATNA. If the buyer offers less than that, you should turn them down because you know you can do better. In contrast, if you know the house you want to buy has multiple offers on it, you would expect the seller's BATNA to be pretty close to their asking price, if not higher.
Of course, most BATNA calculations are not this simple. There are usually more variables involved than price, and even the price and costs aren't always as transparent as they are in a home purchase. A lot of effort and research can be spent on getting a better picture of your opponent's BATNA and even your own. Still, having this information is the most effective way to being a better negotiator.
One of the core principles in negotiation is the Best Alternative To a Negotiated Agreement, or BATNA. This term was coined by Robert Fisher and Bill Ury and used in their book Getting to Yes: Negotiating Agreement Without Giving In. The concept is straightforward, your BATNA is your best outcome if you do not come to an agreement in this negotiation, or rather, what you get if you walk away.
Knowing your BATNA and your opponent's BATNA (I use the term loosely, the person you are negotiating with shouldn't normally be considered a foe to be conquered) lets you know the best and worst acceptable outcomes.
For example, If you are selling your house and you have an offer from another buyer for $150K, that is your BATNA. If the buyer offers less than that, you should turn them down because you know you can do better. In contrast, if you know the house you want to buy has multiple offers on it, you would expect the seller's BATNA to be pretty close to their asking price, if not higher.
Of course, most BATNA calculations are not this simple. There are usually more variables involved than price, and even the price and costs aren't always as transparent as they are in a home purchase. A lot of effort and research can be spent on getting a better picture of your opponent's BATNA and even your own. Still, having this information is the most effective way to being a better negotiator.
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