Options Are Not Optional

Entering into any kind of negotiation requires a great deal of preparation, research, analysis, and planning to make sure you have the correct strategy, tactics and concessions in place to address the issues on the table and the interests that are driving them. The more effective your planning and preparation are, the more likely you are to achieve a satisfactory result.

However, you must also understand that in order to truly maximize your chances for success during the negotiation, you also need to thoroughly research and plan what you would do IF this negotiation FAILS. Therefore, during your preparation and planning process you must ask yourself two key questions:

1. Is entering into this negotiation with this party at this time the best way to create the most value or achieve the right goal that will satisfy my interests?

2. If I do enter into this negotiation, and it is not successful, what will be my next best option to satisfy my interests?

Of course, you are probably optimistic that entering into this negotiation is a good way to satisfy the interests you have, but:

1. Are there other options?
2. Have you considered them?
3. What would it take to make them work?
4. Could you be okay with one of these other options if you have to take one of them instead of reaching an agreement in this negotiation?

In any negotiating setting, the more options you have, the STRONGER your position will be. This is true for two reasons. First of all, having options to fall back on actually creates “competition” for the other party. No matter what your other option is ?#147; even if it is to simply do nothing ?#147; the fact that you have that option serves to motivate the other side to be more cooperative with you if they really want to do this deal. Also, having other options to fall back on makes it less likely that you will crumble under pressure and take a bad deal ?#147; one that really doesn’t satisfy your interests. Always remember:

In Any Negotiation, OPTIONS = POWER

Roger Fisher and William Ury, in their classic negotiation primer, Getting to Yes, refer to these options as BATNAs, for the Best Alternative To Negotiated Agreement. You are never really ready to negotiate until you have your BATNAs worked out. However, this doesn’t mean just throwing something on the back burner, saying to yourself, “Oh well, if this doesn’t work out, I can always do X.” Before you decide that X is a good option to fall back on, it is important to do the research to make sure this option is viable.

Let’s suppose you are in a dispute with a contractor who agreed with you on a price to remodel your house. You paid him the agreed upon fees, but now the job is not completed and he is asking for more money. You are negotiating to either get him to finish for the price he agreed to, or at least to get the job finished with the least amount of further investment on your part. But what if you can’t reach the agreement you want? At that point, your BATNA might be to just sue him, but are you sure that is the best option?

• How long is a lawsuit likely to take?
• How hard will it be to find a competent lawyer who will take your case on a contingency fee?
• What is the value of your settlement likely to be?
• What are your chances of winning (considering you asked for minor changes in the plans a couple of times?
• How much of the settlement will the lawyer take if you win?
• Will that leave you enough money to finish the house?
• How much emotional and physical stress are you prepared to endure during the depositions and court proceedings?
• Are you willing to go for months ?#147; years, even ?#147; with your house unfinished, while the lawsuit plays out?

You won’t know if your BATNA is the best option until you answer all the questions. If it is strong, then you can take a strong, confident position in the negotiation. However, if your BATNA has too much downside for you, it may be wiser and cheaper in the long run to reach a settlement that requires the least cost, so you can get on with your life.

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