BATNA and WATNA: How to Find Your Walk-Away Point in Negotiation

BATNA and WATNA and ZOPA, oh my. Negotiation training comes with a host of new acronyms to learn, but they're a lot easier to understand than they might look. Two of the most important acronyms you'll encounter in the world of negotiation are BATNA and WATNA. Understanding these concepts helps you understand when to walk away, and how to make informed decisions in any negotiation.

In this post, we’ll break down what BATNA and WATNA mean, why they are essential, and how you can leverage them to navigate negotiations with confidence.

What Are BATNA and WATNA?

BATNA stands for Best Alternative to a Negotiated Agreement. This is the most favorable outcome you can achieve if you walk away from the current negotiation. Essentially, it’s your Plan B, the alternative you’ll pursue if the deal on the table doesn’t work out. Knowing your BATNA strengthens your position in negotiation because it helps you measure whether the current offer is better or worse than your alternatives.

On the flip side, WATNA stands for (maybe you guessed it) Worst Alternative to a Negotiated Agreement. This is the worst-case scenario if you fail to reach an agreement. Understanding your WATNA prepares you for the potential risks if things go south in the negotiation. It helps you frame how bad things could get and whether it’s worth walking away from the deal.

Together, BATNA and WATNA help you assess the value of the deal and clarify your walk-away point. When you understand these two concepts, you can confidently decide whether to accept, reject, or negotiate further.

The Importance of BATNA and WATNA in Negotiation

Knowing your BATNA and WATNA is vital in negotiation because they serve as benchmarks for evaluating any offer. Without understanding these alternatives, you risk making decisions based purely on emotion or pressure from the other party. Each has its own major benefits:

• BATNA: A strong BATNA gives you leverage. The better your alternative options, the more power you hold in the negotiation. For example, if you're negotiating a salary offer but have another job lined up that meets your expectations, you’re in a stronger position to push for a better offer or walk away confidently.
• WATNA: Knowing your WATNA ensures you understand the risks. What happens if this deal fails? If the consequences are bearable, you’re in a better position to walk away from a bad deal. However, if the WATNA is particularly damaging, it may encourage you to find a compromise.

Both concepts help you strike the right balance between assertiveness and caution.

How to Determine Your BATNA and WATNA

To determine your BATNA and WATNA, start by doing thorough research. Understanding your options is key to forming a realistic view of the possible outcomes. Follow these steps to get started:

1. List Your Alternatives: What are your options if this negotiation doesn’t lead to an agreement? Identify the most viable alternatives and rank them based on their feasibility and appeal.
2. Assess Their Strengths and Weaknesses: Evaluate the alternatives. How good is your BATNA? What’s your best possible outcome if the current deal falls through? Similarly, how bad could it get with your WATNA? Assess the risks and benefits of each option carefully.
3. Create a Realistic Plan B: Your Plan B (BATNA) should be something actionable. It’s not enough to simply imagine an alternative; you should have a concrete plan that you can execute if the negotiation fails.

For instance, if you're negotiating with a supplier for lower prices but have another potential supplier in mind, your BATNA is switching to that supplier. Conversely, if failing to reach an agreement leaves you without critical resources for your business, you’ve found your WATNA.

The Emotional Side of Negotiation

Negotiation isn’t just about facts and figures—it’s also about managing emotions. When emotions like fear, anger, or anxiety come into play, they can cloud your judgment and make it harder to think logically.

Recognizing and managing your emotions is a critical part of staying focused on your BATNA and WATNA. If you feel cornered or overly emotional, take a moment to step back and revisit your alternatives. This will help you make rational decisions rather than reactive ones.

Before entering a negotiation, try to identify what triggers your emotions. Are you prone to frustration when the other party doesn’t budge? Do you feel anxious about rejection? By recognizing these triggers, you can practice staying calm and level-headed when they arise.

Prepare for Negotiation Success

Preparation is key to any successful negotiation. Once you understand your BATNA and WATNA, the next step is to research the other party. What are their goals? What might their walk-away point be? The more you know about the other side, the more prepared you’ll be to craft a deal that benefits both parties.

Ask yourself the following:

• What alternatives might the other party have?
• What pressures or constraints are they facing?
• Can you anticipate their BATNA or WATNA?

Understanding their position can help you gauge how much flexibility you have. If you believe their BATNA is weak, you may have more room to negotiate favorable terms.

Active Listening and Flexibility

Once you’re in the negotiation, active listening becomes one of your most powerful tools. Pay close attention to what the other party is saying, and don’t rush to fill the silence. Sometimes, staying quiet for a moment can encourage the other side to reveal more about their priorities or pressures.

Ask open-ended questions to draw out more information. Repeat key points to show you understand their perspective, and be flexible in your approach. Negotiation isn’t about rigidly sticking to one path; it’s about finding creative solutions that work for both parties.

If you know your BATNA and WATNA, and have prepared well, you can adapt your strategy as the conversation unfolds.

How BATNA and WATNA Help You Find Your Walk-Away Point

Your walk-away point is the moment in the negotiation when you decide the current offer isn’t worth pursuing further. This is where your BATNA and WATNA come into play.

• If the current offer is worse than your BATNA, you know it’s time to walk away and pursue your alternative.
• If the worst-case scenario (WATNA) is better than the offer on the table, it might be worth rejecting the deal.

By using your BATNA and WATNA as reference points, you can confidently make the call on whether to close the deal or walk away.

Final Thoughts: Becoming a Skilled Negotiator with BATNA and WATNA

In negotiation, understanding your BATNA and WATNA is crucial to determining your walk-away point. These concepts allow you to measure the value of the deal on the table and decide if it’s better to accept, negotiate further, or move on.

By researching your alternatives, preparing thoroughly, managing your emotions, and practicing active listening, you’ll become a more skilled negotiator. Remember, negotiation is a skill that improves with practice, so don’t be afraid to learn from each experience and refine your approach.

With a clear understanding of BATNA and WATNA, you’ll be able to approach any negotiation with confidence and achieve better outcomes.