In a perfect world, negotiators always have a BATNA (Best Alternative to a Negotiated Agreement). However, many high-stakes business negotiations often feel as if there is no Plan B. Experience shows that dealmakers are rarely as constrained as they believe. By expanding their perspective on “walk-away” alternatives and power dynamics, negotiators can find leverage through creative work-arounds, unilateral actions, and partial alternatives that shift the balance of power.
1. The Power of Partial Alternatives
Negotiators often mistakenly search for a single alternative that addresses 100% of the problem. When no such solution exists, they feel powerless. However, identifying options that address even a small part of the requirement can create meaningful leverage by reducing total dependence on the counterparty.
Example: A tech company faced price hikes from its sole electronic component supplier. By qualifying two smaller suppliers that could meet only 30% of its volume, the company created leverage. They offered the incumbent two options: commit to higher volume for better pricing or face a material reduction in purchases. The supplier eventually accepted the new price to protect its market share.
2. Don’t Negotiate from a Place of Fear
When feeling trapped, negotiators often fixate on their own vulnerabilities and overlook the other side’s weaknesses. Dependence is rarely one-sided. If you rely on a supplier for products, they likely depend on you for revenue. High switching costs for a customer often translate to painful revenue and cash-flow losses for the supplier.
Example: A global company was dependent on a single-source coating supplier. Although the account represented only 10% of the supplier’s revenue, it was their most profitable product line. Losing the client would have forced the supplier to retool manufacturing lines at a significant cost. Recognizing this mutual dependence allowed the client to negotiate from a position of strength.
3. Temporary Alternatives and Tacit Consent
When a long-term Plan B is missing, consider what unilateral actions can be taken in the short term. There is often a third alternative to “agreeing” or “walking away”: declining to agree right now. Furthermore, negotiators should distinguish between active consent and tacit consent—acting without formal approval as long as the counterparty does not object.
Example: A microprocessor company discovered a supplier was charging inconsistent prices across different sites. Instead of a formal negotiation, the company unilaterally began paying all invoices based on the lowest price. Due to operational inertia, the supplier continued fulfilling orders. A year later, when market conditions shifted, the parties signed a formal global contract at that lower price point.
4. Focus on the Players and the Process
When no Plan B exists for the deal itself, look for procedural alternatives. This requires distinguishing between the organization and the specific individuals at the table. Every negotiator has personal motivations, such as revenue quotas, KPIs, or pressure from superiors.
Example: A distributor remained inflexible because the client’s account seemed small relative to their billion-dollar business. However, the client discovered the deal was crucial for the lead negotiator’s personal revenue quota. By enlisting a powerful strategic partner to advocate on their behalf and leveraging this personal motivation, the client successfully pressured the distributor to offer better terms.
5. Reframe Threats as Warnings
Communicating alternatives is a delicate art. Threats are coercive and often trigger defensiveness and counter-threats. Warnings, in contrast, focus on self-protection and highlight the objective, negative consequences for both sides. This approach encourages collaboration rather than adversarial posturing.
Example: During a $100 million data-licensing renewal, a client avoided hardball threats. Instead, they presented a shared analysis of the catastrophic revenue losses both sides would suffer without a deal. By framing the walk-away as a mutual warning, they refocused negotiations on joint market growth and revenue-sharing models that benefited both parties.
6. Use the Element of Fairness
When power arguments reach an impasse, fairness is a compelling motivator. Negotiators will often walk away from economically sound deals if they perceive them as unfair. By shifting the conversation to what is reasonable and asking the other side to justify their demands, you force them to defend or adjust their position.
Example: A utility company faced an unreasonable upfront payment demand. Instead of a simple rejection, they asked the construction firm to explain the logic behind the demand and warned it was unaffordable. Unable to justify the position, the firm conceded and negotiated a more reasonable fee structure.
Conclusion:
The best negotiators look beyond obvious alternatives. They create leverage by using partial substitutes, understanding individual motivations, mastering the process, and insisting on principles of fairness to resolve seemingly impossible situations.
Source: Harvard Business Review
