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If you are anything like most negotiators, you will intuitively know how to build upon the interests that you share with others. Less obvious sources of potential value are the differences that exist between people and organisations.....by trading on differences the possibility exists for you to create value that neither party could have created on their own.

For instance, it is possible for you to look for differences in a commercial context in areas such as access to resources, future expectations & goals, time preferences, risk aversion and many other areas.

Having said this, your strongest source of power in any negotiation is undoubtedly the quality of the alternatives to a negotiated agreement that you have available to you. We call this your BATNA or Best Alternative To a Negotiated Agreement. Knowing what your BATNA is means knowing what you will do or what will happen if you are unable to reach an agreement. Of course, you should investigate the BATNA of all parties involved in the negotiation as the BATNA of each party will serve as the ultimate standard against which everyone will measure their own position of strength in the negotiation.

Think about it, if you are in job interview situation, you are in a much better position if you already have a few job offers on the table than if you have been unemployed for some time and you have very few, if any, alternative options available to you.

Without a clear understanding of your BATNA, it is almost impossible for you to decide when to accept a final offer and when to walk away in order to pursue other options.

To identify your BATNA you should in the first instance think of all the alternative options you might pursue if you are unable to reach agreement, then you should attempt to associate a value with each alternative and lastly you should pick the alternative that presents you with the best potential outcome.....this will be your Best Alternative To a Negotiated Agreement or BATNA.

People often make costly mistakes when they confuse their BATNA with other elements of the negotiation. Remember that your BATNA is not what you think is fair or what you originally paid for the item you are selling or the price you hope to achieve. Your BATNA is the reality you will face if you reach no deal in the current negotiation. It is also a mistake to see your alternatives in the aggregate. You can't have the sum total of the other options if you fail to reach agreement - you will have to choose just one option.

So, using an example of your company having the need to employ a trainer for a day, let's say you have 3 options available if the trainer is not prepared to accept a price of $ 2000 or less per day which is the maximum amount that your are able to pay. The first option is to hire an alternative trainer, the second option is to deliver the training yourself and the final option is to postpone the training by a year in the hope that you may have more budget then. Let's say when you consider each one of these alternatives you decide that postponing the training is not a viable option as the need for the training is immediate, delivering the training yourself is not going to be possible as you lack the experience necessary thus the option that appears to be your BATNA is to award the contract to another trainer.

Now, if it's easy to find another trainer then your BATNA would be attractive and you would be in a strong negotiating position but on the other hand, if it was difficult to find the kind of specialist trainer that you need, then your BATNA would be weak and you would be forced to be creative in finding a solution.

What could you do to improve your BATNA? Or.....what could you do to weaken your counterpart's BATNA?

It goes without saying that if your BATNA is strong that you will be able to negotiate more favourable terms knowing that you have something to fall back on if a deal can not be closed.

To weaken your counterpart's perception of the strength of their BATNA, you could try to convince them of the value of the unique benefits associated with your recommended course of action - in other words, you can point out to them what the things are that can only be obtained through reaching agreement with you and which they will not be able to attain through falling back on their BATNA. For instance, you could point out to them that only you can guarantee to pay them within a certain period of time or only you can deliver an end to end solution etc.

Remember that you will always be in a more powerful position if you only have to choose between equally attractive options rather than having to make a decision that favours only one potential and inevitable course of action.

Now you may say to me that knowing and developing a BATNA is common sense.....and I would agree with you. Where most people miss the power of a BATNA is that they only start developing their alternatives when they realise that an agreement is not possible because they've reached a deadlock.

It's really too late to start thinking about alternatives once you've already started negotiating. If you want to have power and leverage in negotiation it is essential that you start developing alternatives to a negotiated agreement early on - as a matter of fact, you should start asking yourself on day 1 what alternatives are available to you and you should never really stop evaluating potential alternatives.