Two executives walked into the same annual negotiation with the same supplier, two years apart. The contract was strategically identical both times — core logistics, roughly nine figures over three years, a supplier who knew exactly how deeply they were embedded.
The first executive prepared immaculately on the deal itself: benchmarked rates, service-level analysis, a target number and a walk-away number. Across the table, the supplier’s team opened with a 14 per cent increase, cited fuel costs and currency, and then did something more effective than arguing — they let silence and the renewal deadline do the work. With three weeks left and no live alternative, every firm position the executive took had a hollowness both sides could hear. The final increase was 11 per cent, dressed as a compromise.
The second executive spent less time on the deal and more time on a question her predecessor had never seriously asked: what do we do if there is no deal? Four months out, her team ran a genuine tender exercise with two rival providers, costed a partial in-housing of the routes that mattered most, and mapped the true cost and pain of switching — not the catastrophised version, the audited one. The answer turned out to be: survivable, at a price. When the incumbent opened with its ritual increase, she neither argued nor bluffed. She shared the shape of her alternatives, said the relationship was worth a premium but not this one, and asked what they could do. The renewal closed at 2 per cent.
Same table, same supplier, same dependency on paper. The difference walked into the room before anyone spoke — because the most important move in that negotiation happened four months earlier, in a meeting the supplier never saw.
The idea that reframed negotiation
The concept has a name, and it comes from the Harvard Negotiation Project. In Getting to Yes (1981), Roger Fisher and William Ury introduced the BATNA — the Best Alternative To a Negotiated Agreement — and with it a quiet revolution in how power at the table is understood.
Their argument was simple and remains under-absorbed forty years on. The purpose of negotiating is to produce something better than what you could get without negotiating. It follows that your true standard for judging any proposal is not your wish list, not your bottom line plucked from hope, but your best realistic alternative if the talks fail. And it follows further that negotiating power is not primarily a function of size, budget, or title. A multinational with no alternative to a specific supplier is weak in that room. A mid-sized firm with two live options is strong. Power, Fisher and Ury insisted, is relative to alternatives — and alternatives can be built.
That last point is the one that changes behaviour. Your BATNA is not a fact you discover about the world. It is an asset you develop, deliberately, before you need it — which is precisely what the second executive understood and the first did not.
What an alternative does to a mind
The economics of a BATNA are obvious enough: it sets the floor below which no agreement makes sense. The psychology is where it becomes interesting, because an alternative does not merely change your arithmetic. It changes you.
Negotiation researchers demonstrated the effect directly. In a 1994 study, Robin Pinkley, Margaret Neale, and Rebecca Bennett ran matched buyer–seller negotiations in which some negotiators had an alternative deal available and others did not. Negotiators with alternatives claimed a significantly larger share of the value on the table — and interestingly, the effect held even when the alternative was known to both parties, shifting the whole dance around it. Related work on first offers found that negotiators with strong alternatives, or simply with attention focused on them, opened more ambitiously — and opening offers, thanks to anchoring, drag final outcomes towards themselves.
Underneath these findings sits something any experienced negotiator will recognise in the body. Walking in without an alternative means every moment of friction carries existential weight: if this collapses, there is nothing. That state — call it what it is, dependency — leaks through channels you cannot consciously manage. Pace of concessions. Speed of replying to a punitive email. The half-second of stillness after their opening number. Skilled counterparts read dependency the way pilots read instruments, and the supplier’s team in year one was reading it for three straight weeks.
An alternative rewires the state. Not into aggression — into something far more useful, which is calm. The conversation stops being a cliff edge and becomes a comparison between two workable futures. You can hold silence. You can say “that doesn’t work for us” without your pulse spiking. You can be genuinely warm and collaborative — more so, not less — because generosity from a position of choice reads as strength, while the same generosity from dependency reads as surrender on instalment. Nearly everything people call “presence” at a negotiating table is, on inspection, the outward face of a well-built BATNA.
The Walk-Away Workout
Building that asset is a process, not an insight. Five steps, run well before the negotiation — months before, for anything that matters.
List — without censoring. Every path available if this deal dies: rival suppliers, in-housing, redesigning the need away, delaying, splitting the requirement, doing nothing. The first list is always longer than the pessimists in the room expect. Dependency is partly a failure of imagination, and this step is where it starts to break.
Develop the best one until it is real. A theoretical alternative changes nothing — your body knows the difference between a slide that says “we could tender this” and a tender that has actually run. Take your strongest option and invest in it: get the quotes, run the pilot, meet the rival, cost the transition honestly. Fisher and Ury’s own counsel was exactly this — convert your most promising alternative into a practical, executable option. Yes, it costs money to develop options you may never use. So does an 11 per cent increase, every year, forever.
Price it into a reservation point. Translate the developed alternative into a specific answer to a specific question: at what point does walking away become the better decision? Include the honest switching costs — the disruption, the ramp-up, the relationship value genuinely at risk. That number is your reservation point, and it must be written down before the negotiation begins, because a floor calculated in the heat of the room will quietly relocate itself downwards under pressure.
Rehearse the walk. Say the sentence out loud, before you need it: “If we can’t get past X, we’ll go a different route — and we’re prepared to.” Negotiators who have never rehearsed the walk-away flinch when the moment comes, and the flinch cancels the words. Also decide, in advance, whether and how to reveal your alternative. A strong BATNA disclosed calmly and without theatre — as the second executive did — moves the counterpart’s expectations honestly. A weak one bluffed is a time bomb; assume competent counterparts will test any claim you make.
Revisit — theirs and yours. BATNAs decay and appreciate as facts change, so re-examine yours at every major stage of a long negotiation. And run the whole exercise once more from the other chair: what is their best alternative to a deal with you? Their pressure, their deadline, their board — the picture of both BATNAs together is the real map of the negotiation, and it frequently reveals that the side performing strength is the side with fewer places to go.
Guarding the number when the fever rises
One hazard remains even after the workout is complete, and it lives inside your own team. Negotiations generate momentum. Weeks of investment, relationships forming across the table, the gravitational pull of “getting it done” — dealmakers call it deal fever, and its first symptom is a reservation point that starts to negotiate with itself. We said 6 per cent was our ceiling, but given the relationship… given the timing… given how far we’ve come… The floor you calculated in daylight relocates in the heat, one reasonable-sounding adjustment at a time, until the alternative you spent four months building is quietly abandoned without anyone ever deciding to abandon it.
The defences are structural, not motivational. First, split the roles: the person negotiating should not be the person with sole authority to move the walk-away number. The negotiator needs freedom to explore; the number needs a guardian who was not in the room when the fever took hold — a deal committee, a principal, a designated colleague with the standing to say “that breaches the line, come home”. Second, write the reasoning down, not just the figure. A number alone can be argued with at midnight; a documented chain — here is our alternative, here is what it costs, here is why the floor sits at X — has to be dismantled, and dismantling is conspicuous. Third, agree in advance what would legitimately change the number. New information about their constraints? Genuine movement in the alternative’s availability? Fine — reconvene and recalculate in the cold. Fatigue, sunk time, and the charm of the other side’s lead negotiator do not appear on the list, and naming that explicitly, before talks begin, is what makes the list enforceable.
Fisher and Ury gave us the discipline of building the alternative. Experience adds the discipline of keeping it — because a BATNA that melts under deal fever was never power. It was decoration.
Calm is the tell of preparation
A last word on ethics, since power is involved. A BATNA is among the cleanest sources of negotiating strength there is — it deceives no one, exploits no bias, and consists entirely of genuinely improving your own position. The counterpart facing a well-prepared negotiator is not being manipulated. They are being told the truth about the market, earlier than they would have liked. Where the line does sit is at fabrication: inventing alternatives you do not have is simply lying, and it fails the daylight test the moment anyone checks — which, in nine-figure negotiations, someone will.
The deeper lesson of the two executives is about where negotiations are actually won. We picture the table — the reading of faces, the timing, the well-chosen silence. All of it matters, and all of it together is worth less than the work done in rooms the other side never sees. The supplier’s team in year two later admitted they had known within ten minutes that the dynamic had changed. Nothing in the executive’s manner announced it. Everything in her manner implied it — the unhurried answers, the comfort with pauses, the complete absence of need.
That is what a BATNA ultimately buys, and it cannot be faked, borrowed, or improvised on the day. Walk in with a real answer to what if this fails? and you will negotiate like someone who has one.
Because you will be someone who has one.
David Watts
Keynote speaker, NLP Master Practitioner, and author of Cracking The Influence Code.