How to negotiate when you have nothing to leverage


You probably know by now that while I go by the name Penelope today, it didn’t start out as my real name. It was a pen name. My editor at Time Warner gave it to me, and the first time I saw it was in a contract. It looked like a good place to start negotiating.

But when asked about writing under a different name my editor said, “When you’re Dominick Dunne you can negotiate with Time Warner.”

And herein lays the problem with most negotiations. You are in a great position if you have something to leverage, like, another person willing to give you the same type of deal. This is called your BATNA (best alternative to negotiated agreement). But in most cases, one party has an especially terrible BATNA. In the case of me and Time Warner, if I said no to them, they would have ten million people who would love to write a column for them. If they said no to me, I would not have a column.

Yet most advice about negotiating assumes you have a good BATNA. In an interview I did with William Ury, the author of my favorite negotiation book, Getting to Yes, he said that negotiation is all about knowing your BATNA and knowing the other party’s BATNA and then helping both of you to get what you want.

If you think about negotiating from this vantage point, then you can understand why job hopping is okay in today’s market: the BATNA for young people is stronger than the BATNA for hiring managers. Hiring managers are scrambling to hire young people and the young people are quitting faster than human resources can replace them. Meanwhile, the alternatives for young people are increasing – they can live at their parents’ house, they can start their own company, and they can travel. All great alternatives to getting a job at a company.

That said, sooner or later each of us finds ourselves in a situation where we have a really lousy BATNA. I find myself in this position a lot, as a writer. For example, a very large syndicate asked me to write for them. It would have meant having my column run in 400 newspapers at a time when I had about ten newspapers. I sent the contract to my lawyer, thinking he’d just take a quick look and say yes. But he told me that there was a clause that made me essentially unable to write for anyone else. Ever. We tried negotiating and they wouldn’t budge. Of course they wouldn’t. Millions of people want to write a syndicated column. So I had to say no. It was a very hard decision. In hindsight I am thankful for that lawyer, but for years after that, every time I found myself struggling, I worried that I did the wrong thing with the syndicate.

When Yahoo offered me the chance to write for them, they gave me a difficult contract. I gave it to the lawyer and the lawyer was very frank: It’s not a great contract, but it’s a great opportunity, and you should take it. So we talked about some things I could try asking for that would not be that hard for Yahoo to give on, just to be nice. I gave Yahoo a short list, they picked a few things, and I signed.

So what have I learned from all this? If one person has a great BATNA and the other has a terrible one, it’s not really negotiations; it’s trying to get a little something extra. It’s asking for a favor. If you approach negotiations from this perspective then you are much more likely to get a little bit of what you want.

Figure out where your counterpart might be willing to give a little. Even if your BATNA clearly stinks, most people you negotiate with will be willing to give a little just to create some good will for the working relationship you are establishing.

So you can read all the negotiation advice in the world, but if you have a terrible BATNA, what you really need is advice about how to ask for a favor. And, ironically, the advice for asking for a favor is the same advice for negotiating: Know what is most important and least important to both parties.

14 replies
  1. Mike St. Pierre
    Mike St. Pierre says:

    Penelope, great post! I also like Ury’s follow up: “The Power of a Positive No” where he also discusses the BATNA approach. Keep up the good work!


    * * * * *

    Yeah, that second book is good to. The second book is like “Advanced Getting to Yes.”


  2. Jason Warner
    Jason Warner says:

    There are some additional things that one might consider when one has a low BATNA. First, the single most common mistake people make in a negotiation is UNDERestimating their own position. Because of this, for positioning purposes it is sometimes helpful to portray a strong BATNA then you actually have, at least at the beginning of the negotiation, as this will help you get a read on the other party’s BATNA.

    Secondly, it’s helpful to consider the time value of your BATNA, and consider the negotiation as a series of steps. In many cases, such as the ones Penelope describes, one’s BATNA will improve over time, so it may be best to concede some items of value in Round 1, with the intention of reopening the discussions in a Round 2 (or Round 3) when it is foreseeable that one’s BATNA is going to be improved.

    Food for thought.

  3. junger
    junger says:

    I had no idea your name wasn’t Penelope Trunk. Wow, that was a real shocker — as was the expose post.

    Always keeping us on our toes …

  4. Indian Blogger
    Indian Blogger says:

    I think you make a great point. In B Schools, we are often told to think about BATNA during negotiation. Often, there are situations when I don’t have a BATNA ( or have one thatz a last option and is something that I don’t want). Itz frustrating then. In such cases, I think ,your point of treating it like a favor is excellent. I have actually used it many times but when I read your piece now, I actually realized it that its true. In short,if the BATNA sucks,I follow the thumb rule-
    Be good,be nice and ask for a favor..and they might melt.! :)

  5. Recruiting Animal
    Recruiting Animal says:

    I really liked this. If I remember Getting To Yes correctly they talked as if everyone had a BATNA which I found very frustrating. The book would have profited from the inclusion of this article.
    It reads well and hits home.

    Re young people having greater BATNA. Maybe in certain sectors. I still think that most inexperienced people don’t have much to negotiate with.

  6. Maureen Rogers
    Maureen Rogers says:

    “Penelope” – Another provocative and interesting post. For me, the best alternative to a negotiated agreement, if you have no/low BATNA is your indifference, i.e., your ability to walk away form the table. I’ve always found that giving yourself permission not to obsess about the outcome frees you up to dig your heels in on certain issues. Which ends up increasing your ability to negotiate.

  7. Brian Johnson
    Brian Johnson says:

    I think self-confidence and optimism are also strongly related to this discussion as intangibles in the negotation process. In your example with the syndicate, there must have been something internally working to convince you that you could do better, even though nothing was on the table. Had you not had that optimism and confidence, you would have taken the deal. It may be oversimplying, but I think you can make a case that even if you have nothing tangible to leverage, optimism and confidence can be a strong BATNA. They are powerful assets as illustrated by most successful entrepreneurs.

    * * * * *

    Brian, I love this comment. It’s so perceptive, and it’s like having a mirror held in front of me, and who doesn’t like that? Thanks for showing us all a second source for gaining leverage in negotiations.


  8. Andrey
    Andrey says:

    I like the notion of promoting with terrible BATNAs.
    Let me just add that in this case there is promoted just the part of it, which actually shows how the offerent can solve problems or issues of the acceptant, while using the best points of the ‘Lousy BATNA’ while.
    In other words, self-confidence and showing the best from the bad offer, can help the offerer persuade the acceptant to exchange his amazing suggestions for one’s strong ‘mindness’ of how the accpetant’s problems will be solved by the offerer possessing not the best BATNA for the moment.
    In other words, material things (i.e. tangible contract provisions like salary, bonus and insurance) will be exchanged for the intangible (strong minded personality, who will likely to cope with the problem the best way).
    This makes me think that disadvantages can be turned in good opportunities, if a person knows what and how must be offered. So far, this is a great part of thinking, picking someone’s issues and offering their solution.
    By the way, Penelope, this is the idea I’ve learned from your ‘How to get a six-figure book deal from your blog’. It seems to work for this case too.
    Thanks for catching blogging ))

  9. GSR
    GSR says:

    Books on negotiation are a cottage industry and despite the glut they keep on coming. The reason I think is that this genre plays on everyone’s desire to learn “the secret” to getting their way. However, in my opinion, negotiation boils down to just 2 things: (1) knowing what the ask for; and (2) having the leverage to get it. Knowing what to ask for requires knowledge of the area you’re operating in – or having advisors with such knowledge. Having leverage, as your article points out so well, is simply a measure of how good your best Plan B is.

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