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Alternatives and BATNA in Interest Based Negotiation - Noam Ebner - YouTube
Channel: Noam Ebner
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I want to introduce something that has become
a very very fundamental term both in interest
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based negotiation and in positional bargaining.
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And that is the term of BATNA or best alternative
to negotiated agreement.
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BATNA is an acronym but people use it as if
it were a word, so familiarize yourself with
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it and I'll explain what that means.
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When you're negotiating with someone about
something, chances are that you have alternatives
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with other people outside the room meaning
that sure you could seal a deal with the person
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you're negotiating with now but you might
also be able to go and to negotiate with someone
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else and receive this same object or the same
value or the same item from through a different
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negotiation.
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For example.
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if I'm buying a used car from someone and
we're discussing the price of a Ford Focus
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I could say you know what I'm leaving this
negotiation and what do I have out away from
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the table: I have another negotiation with
another car salesman for another Ford Focus.
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So, in every negotiation I have alternatives
which are things I can do on my own outside
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of the negotiation.
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I don't need one car salesman's agreement
in order for me to go and talk to another
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car salesperson.
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So this is something I can do on my ow.
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So my alternatives are basically things I
can do if I decide to put this negotiation
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on ice.
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Now, in most negotiations we have many alternatives.
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Some of them are desirable alternatives and
some of them aren't so desirable alternatives.
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For example, when we're negotiating with our
boss for a raise, one alternative we have
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is we can always quit and go work somewhere
else.
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That might be a very desirable alternative
if the alternate place really exists and if
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they're offering a lot more money and etc.
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It might not be a desirable alternative if
we're not so sure it exists or if they're
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offering low salaries.
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So, alternatives don't necessarily mean that
we can just go out and do anything, but it
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does mean that we have a range of choices
including the negotiation we are taking part
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in and we need to choose from all of these
alternatives.
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We need to choose what will serve us best.
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A BATNA is our very best alternative.
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The best alternative is the one that we zoom
into in our negotiation analysis.
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The best alternative is if we would set this
negotiation aside, again we are negotiating
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over the price of 2010 Ford Focus.
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If we would set this negotiation outside and
I would say you know what I'll be back in
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a while and I would go out and I would talk
to this car dealership about that Ford and
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a different car dealership about a different
Ford and a third car dealership about a different
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Ford, then what I have now is I have three
alternatives.
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We're not in this game to gather as many alternatives
as we can.
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In the end, we're only going to buy one car,
so it's not so important to have a gazillion
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alternatives.
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What is important is to identify which of
these alternatives is the best one, because
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that is our benchmark for many things, so
what we're going to try and do is, we try
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and understand which of these three Ford Focuses
is our best Ford Focus to negotiate over and
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buy, and then that becomes our BATNA.
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So, with our BATNA, our best alternative to
a negotiated agreement with car person over
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here is buying a Ford Focus from car dealership
number four over there then we now know that
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if this deal doesn't work out this is what's
in the wings.
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SO this concept of BATNA, we've demonstrated
how it works in negotiation.
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Most of our examples so far are how it works
in positional bargaining, but it also works
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in interest based negotiation especially Fisher
and Yuri recommend that the BATNA be a way
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that you avoid giving in to power.
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When someone tries to squeeze or to demand
just a little more out of you, you can just
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say, use your BATNA as a shield, why should
I do that?
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I can do better elsewhere.
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Why would I give you what you want when I
could do better elsewhere?
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Help me understand what you're offering and
maybe sweeten the deal a little.
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They also recommend that you use your BATNA
in that way.
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Instead of applying direct power, which is
kind of a no no in the way interest based
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negotiation sees things.
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You don't apply direct power with a threat
or an ultimatum but with sharing your BATNA,
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saying look I'd really love to do business
with you but Tony down the block has offered
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me the car for less and I think we could come
to a deal that would be beneficial to us all,
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but obviously I'm not going to take a deal
that doesn't work for me so let's sit down
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and really talk about what's important to
us.
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So that's how BATNA might be used in interest
based negotiation.
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